Editorial: Tourism funding hampered by budget shortfall

Apr. 07, 2014 @ 11:31 PM

While Gov. Bill Haslam has enjoyed strong support throughout the years in the Sevier County area, a recent move has some local tourism professionals asking his administration to rethink decreased funding for tourism marketing.

As a part of his proposed $160 million in cuts to the new budget, the governor is proposing a 50 percent decrease in extra state funding for tourism marketing.

Last year Haslam added $8 million in addition to the state's regular recuring marketing budget for tourism marketing, taking funding to nearly $13 million.

This year, the with governor's newly proposed budget changes, that will drop to around $9 million.

Budget cuts are expected when belt tightening is needed — Tennessee is one of only four states (with Alaska, Indiana and West Virginia) not expected to meet budgeted fiscal year 2014 revenue, according to the National Conference of State Legislatures' fall budget update report (http://www.ncsl.org/documents/fiscal/fallsbu2013free.pdf) — but how to make those cuts without affecting the bottom line is key. In a state like Tennessee, which depends on sales tax — generated in great part by tourists — getting them here is half the battle.

Tourism professionals in Sevier County have long said that for every dollar spent on tourism marketing, much more funding is brought into the state.

It's been claimed that $19 dollars are brought into the state for every dollar spent on tourism advertising. While the tourism industry obviously have a big stake in trying to influence government spending on marketing their product, even if their number is inflated by 200 percent, $8 spent would be nearly $8 earned in sales tax dollars alone.

"In the state of Tennessee, we're probably about 10th or 11th when it comes to state advertising budgets," local businessman Ken Maples, president of the Sevier County Hospitality Alliance said Monday morning. "We used to be right up at the top years ago, and we should be easily in the top five when it comes to tourism advertising and investment. What we're trying to convince the governor and state legislators is, we don't need to be reducing tourism spending at a time when sales tax revenue is decreasing.

"Don't cut the hand that's feeding (the state sales tax)," Maples said.

In the past, the governor has seemed fairly gung-ho about tourism spending. He even received an honor from statewide tourism officials last fall after committing more spending to tourism marketing in the previous budget — the $8 million in additional funding he added last year.

Perhaps the governor is rethinking his stance on tourism spending, or perhaps he's looking to go a different direction.

Economist Steve Morse, of Western Carolina University, said there's been talk of more public-private partnerships for funding tourism marking, and perhaps the governor is thinking that should be the future for Tennessee.

Either way, Morse said, spending to advertise the state is a good thing.

"It's a good return on investment for Tennessee," Morse said. "That same return on investment is going to take place if its public or private dollars."