ASHLAND — A decision to delay an increase in the city's hotel tax means that smaller tourism-dependent groups will not receive extra money this year from the tax hike.

ASHLAND — A decision to delay an increase in the city's hotel tax means that smaller tourism-dependent groups will not receive extra money this year from the tax hike.

The Ashland City Council on Tuesday finalized an increase in the city's hotel tax from 7 percent to 9 percent, bringing the tax in line with taxes charged in Medford and Jacksonville. The council also decided not to raise the tax until Oct. 1 to avoid hurting hotels and bed and breakfast inns in this summer's tourism season.

Since a large part of the money raised from the tax — 42 percent of annual revenues — comes from the summer months, the council will have less money to distribute. That means groups like the Ashland Independent Film Festival, ScienceWorks Hands-On Museum and the Ashland Gallery Association will not receive a hoped-for increase.

City staff estimated the amount of money that will come in for the fiscal year without a summer tax increase and recommended not awarding extra money to smaller groups. Because of the delayed start date, estimated new revenue from the increase will fall from $435,000 to $250,000.

The original proposal called for giving a $100,000 boost to smaller groups to use the money to promote tourism. Smaller groups had been awarded $125,000 during the spring budget process before the decision to raise the tax.

On Tuesday night, a City Council majority voted to accept staff's recommendations about how to divide the money. Those include:

Increasing funding for the Ashland Chamber of Commerce's Visitor & Convention Bureau to market Ashland as a tourism destination from $88,000 to $225,000.Cutting chamber economic development funding from $175,000 to $80,000 but spending $170,000 for consultants and possibly a new staff person for the city government to create a strategic and economic development plan.Continuing the allocation of $120,000 to the Oregon Shakespeare Festival for marketing.Cutting the allocation for public art from $15,000 to $9,000.

The City Council majority voted to set aside $29,000 with the intent of using it for city projects like parking or downtown plaza improvements. However, councilors were warned that the financial cushion may not materialize if the slowing economy dampens tourism and affects hotel stays.

The city already is seeing lower receipts from the hotel tax, with revenues down 2.7 percent for the most recent quarter.

Vickie Aldous is a reporter for the Ashland Daily Tidings. She can be reached at 479-8199 or vlaldous@yahoo.com.