ELY — The numbers tell a success story. Lodging tax collections during Winterfest last February climbed 38 percent over the previous year. A festival in March saw collections jump 65 percent. A summer ATV campaign drove a 31 percent spike in website traffic. Streaming ads achieved a 92 percent view-through rate, far above industry norms. The organization grew its email audience by 85 percent in a single year.
Yet Visit Ely, the tourism bureau that produced those results, heads into 2026 operating on roughly 40 percent less money than it had requested, a casualty of a months-long funding dispute that has pitted the Ely Area Lodging Tax Joint Powers Board against the organization it was created to support.
“Marketing is fuel,” Abby Dare, Visit Ely’s executive director, told the Ely City Council at a recent meeting. “And when you reduce your fuel by 40 percent, you can’t expect the same reach or results.”
The cuts are already tangible. Visit Ely has eliminated its podcast, scaled back radio advertising, cut major television campaigns, reduced print, consolidated contractor roles, and paused public relations expansion and tourism economy education initiatives. Dare said the organization has also stepped back from compliance and event support work it had previously covered on behalf of the region’s tourism partners.
“Those initiatives had to pause. Not because they weren’t needed, but because our structure has radically changed,” Dare said.
The reductions come even as lodging tax collections trended upward across the board, with final year-end figures still coming in. Dare emphasized that the metrics her team tracks aren’t window dressing. “These are not vanity metrics,” she said. “They’re measurable indicators of tourism visibility and economic activity.”

A dispute over dollars and authority
The funding shortfall stems from a decision by the joint powers board, which collects lodging tax revenue and disperses it, to divide 2026 funds among three entities rather than directing nearly all of it to Visit Ely as it had for decades.
The board voted to fund the city of Ely roughly $20,000 for utilities at the new Trailhead Building and the Ely Chamber of Commerce up to $53,000 for visitor center staffing while simultaneously reducing Visit Ely’s allocation from a requested $315,000 to approximately $210,000. All three received about two-thirds of what they asked for.
Critics have questioned whether that approach complies with Minnesota statute, which requires that 95 percent of lodging tax proceeds be used to fund “a local convention or tourism bureau for the purpose of marketing and promoting” the area. State tourism officials who attended a recent board meeting argued the city and chamber allocations don’t meet that standard. The board has maintained it has legal counsel supporting its position.

Board reshuffled amid community pushback
The controversy has also triggered changes in who sits at the table. Ely Mayor Heidi Omerza replaced the city’s representative on the joint powers board, Paul Kess, with Councilor John Lahtonen in January after the council voted 6-1 in October to direct Kess to support the full 95 percent allocation for Visit Ely, a direction he did not follow at the November board meeting.
Fall Lake Township has also named a new representative. Cindy Smyka, a former director of Visit Ely, will replace Adam Masloski, who is leaving the area. Masloski had been the lone vote against the two-thirds funding split and endorsed Smyka’s appointment before stepping down.
Smyka came out swinging at a recent Fall Lake Township board meeting, calling the lodging tax board’s decisions “outrageous” and warning that the growing legal tangle could freeze funding altogether.
“As a young business owner in the township who is relying on being marketed, if this goes out the window, what are our resorts going to do?” she said.

A call for alignment
Dare has tried to keep the conversation focused less on legal skirmishing and more on what she sees as a deeper problem: a community that hasn’t developed a shared long-term vision for its tourism economy.
She recently posted an invitation to a destination marketing education webinar online, hoping to spark a broader conversation. The public response veered off topic, but ten people contacted her privately to express enthusiastic support, telling her they didn’t feel comfortable engaging publicly.
“That dynamic is concerning to me,” Dare told the council. “Healthy civic discourse is essential in a town like ours.”
She is urging community leaders and council members to attend the webinar, which she described as foundational education on how destination marketing organizations function and how tourism economies sustain small towns.
“Tourism is not our only industry, and I don’t want it to be our only industry,” Dare said. “But it is a foundational part of our local economy, and it does deserve careful, coordinated, and forward-thinking stewardship.”
The lodging tax board has not yet scheduled its next meeting.