In advance of a key vote this week, Ely council members weighed in on the debate over how to spend proceeds from the area’s lodging tax.
After hearing from the head of Ely’s tourism bureau, council members accepted her recommendation and directed their representative on the Ely Area Lodging Tax Board to support her recommendation when the board convenes Oct. 13.
Abby Dare, the tourism bureau’s executive director, asked that the bureau continue to receive 95 percent of lodging tax funds next year.
Her other recommendations included using reserve funds to meet requests made by the city of Ely and Ely Chamber of Commerce related to operations and staffing for the new trailhead building, to hone in on efforts to get better compliance with the tax, and to begin strategic planning to consider spending structures for 2027 and beyond.
Dare pushed back against suggestions that the tourism bureau receive a lesser share of the better than $300,000 generated each year by the lodging tax, noting that the funds support homegrown efforts to market the region.
“Right now we have a team of talented people marketing Ely,” said Dare.
Dare noted the funds support local contractors who work on a part-time basis, and indicated that she hopes that a marketing director position will grow to fulltime status. “In the past, lodging tax dollars often went to Twin Cities firms who produced one or two campaigns per year, and now we’ve had a local marketing team,” said Dare. “Grant writers, podcast producers, all skilled and qualified people who know Ely. This local expertise makes are advertising sharper and more accurate.”
She added that “People are required to do the work and right now we have a team of talented local people marketing Ely.”
Dare acknowledged the ongoing discussions to perhaps divert some lodging tax proceeds to support the trailhead building, but said she believes a comprehensive planning effort is needed.
“The issue is not with the requests themselves, it is with the lack of strategic framework guiding those decisions,” said Dare.
Dare said she understood the request for a more balanced approach to lodging tax revenue distribution, but warned “if this funding model changes, the tourism bureau will have fewer resources to take on these projects.”
“I do ask you to slow the process down,” said Dare, who subsequently outlined her recommendations to the group.
She said the recommendation, which includes using reserve funds, allows all of the requests to be funded in 2026 while granting additional time to study and develop a plan.
The request generated discussion at the council table.
At first, member Al Forsman seemed skeptical and said, “That’s why we have a lodging tax board.”
But council member Emily Roose took a different approach and endorsed the tourism bureau’s recommendation.
“It seems like you, one want to keep local jobs, two there are funds in reserve that are available to meet all of the requests by the Chamber and the city of Ely, and three come up with a strategic plan,” said Roose.
“What we can do in 2026 is learn a lot,” said Dare.
There’s an effort underway to perhaps streamline how lodging tax dollars are collected, with suggestions that the state of Minnesota take over collection from Cook County, which has administered the tax for years on the Ely area’s behalf.
Officials are also hoping to capture more of the money collected by short-term rental units, which by law are supposed to collect the tax.
“There is nobody really watching it to make sure everybody pays,” said Harold Langowski, the city’s clerk-treasurer.
“There’s money on the table right now (not being collected),” added Dare.
Council member Adam Bisbee, meanwhile, asked if there was room for negotiations, including whether the tourism bureau could get by with receiving 92 percent of lodging tax proceeds.
Dare voiced openness to negotiation but added it’s unclear how the tourism bureau’s operation would be impacted without specifics.
In a related matter, data released this week showed that lodging tax collections in July were down roughly 20 percent compared to 2024, but those numbers may be skewed given that some lodging establishments pay their tax obligation on a quarterly or annual basis.
