The members of the TIME believe there are compelling reasons for state policymakers to appropriate more state monies to promote travel and tourism to Michigan. An investment of $25 million in State funding would produce over $1 billion in statewide economic activity and over $87 million in new state tax revenues.
That’s more jobs, a stronger economy, and more tax revenues, with the preponderance of those very positive outcomes coming back to the state during the same fiscal year!
The vast majority of tourism businesses do not support exposing their customer base to additional state taxation to fund tourism promotion. To a large measure this opposition is grounded in first-hand experience or in light of the experience of other states who have tried such an approach.
Once a tax is imposed, there is no guarantee that those taxes will always be spent only to promote tourism. Subsequent legislative action often redirects these taxes, once supported by tourism businesses, to be used for purposes totally unrelated to tourism promotion.
Take the experience of Illinois for example, where that state raises tourism promotion funding via a statewide bed tax. In 2000, Illinois spent over $61 million to promote tourism. In 2005 these expenditures dropped by over 20% to $48 million. What happened? Hotel guests in Illinois still pay the same bed tax. That State’s Governor and legislature simply passed legislation, over the objections of that state’s tourism industry, to use those funds for other unrelated purposes.
Other states have had similar experiences. Several years ago, Missouri established a funding model that showed great promise. Policymakers in that state gathered the 17 SIC codes related to tourism, and established a baseline for tax revenues generated by those tourism businesses. The bill stipulated a specified amount over and above that baseline would be committed to promote Missouri tourism. The funding produced significant results, but unfortunately when the state ran into budget difficulties, the vast majority of funding was directed to purposes unrelated to tourism.
The members of the TIME Coalition are opposed to additional taxes, surcharges, or fees being imposed upon Michigan residents, travelers or tourists to fund state tourism promotion. Michigan’s economy is weak compared to other states, unemployment is high, consumer confidence and gasoline prices are on the rise. Because it is utterly dependent on discretionary spending, the nature of travel and tourism is fragile indeed.
