Tourism funding could increase this year
February 19, 2008
The Governor’s Office of Economic Development hopes the State Legislature will approve $15 million to fund tourism in Utah this year. That’s the recommendation the economic development and revenue appropriations subcommittee made in the 2008-2009 governor’s budget. However, legislators learned Monday that the budget is $340 million less than anticipated.
Even though the budget turned out short this year, the board of Utah’s Office of Tourism still hopes the recommended appropriation will pass, as the money would bring more tourists to the state and support Utah’s already thriving economy.
The total state budget for 2009 is $11.7 billion, a 3.2 percent increase from last year’s budget.
Leigh von der Esch, managing director of the Office of Tourism, said on Friday that she is confident the $15 million proposal will win approval at the Legislature. She said the money will support the ongoing advertising campaigns the Office of Economic Development and Tourism Office has launched across the United States and in foreign countries.
"We are cautiously optimistic," von der Esch said of the possible passing of the proposal. "It’s amazing how much more we could do if we have that money."
The Legislature approved an $11 million appropriation for the tourism industry last year after $13 million was recommended. Phillip Jeffrey, deputy director of the Governor’s Offices of Planning and Budget, said the tourism funding appropriation value is determined from the statute that appropriates a certain percentage of the state’s revenue growth to several general fund programs. After the Tax Commission estimates revenue, legislators decide what the state needs the most and what it needs least. Some of the general fund programs competing with the tourism industry this year include transportation and education. However, because education is funded by the Uniform School Fund, most of that funding will come out of personal and corporate income taxes.
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Von der Esch said Utah saw a higher percentage of tourists visiting the state the last few years, compared to the surrounding states. Utah saw a 13 percent increase in tourism dollars last year, compared to the average seven percent increase the surrounding states experienced. Utah has seen an increase of 17 million visitors to 20 million visitors in the last three years. The tourism industry has also risen from $5.2 billion to $6 billion, von der Esch noted.
"We’re ahead of inflation," she said. "The message of ‘Utah — Life Elevated’ has been very well received nationally and internationally."
Von der Esch and Phillip Jeffrey, deputy director of the Governor’s Office of Planning and Budget, said most of the appropriated money for tourism funding goes to advertising campaigns.
"[It goes to fund] a lot of television ads around the country to attract tourists to Utah," Jeffrey said.
Von der Esch said the Utah — Life Elevated commercials that are being aired across America on national channels, including the History Channel, Discovery and Travel, are being received well.
"We’ve had a very good response from the History Channel," von der Esch said. "We have a new spring and summer campaign."
The Office of Tourism recently entered the national cable market, and von der Esch said the office will be airing more ads on cable channels across America this spring.
Jason Perry, executive director of the Governor’s Office of Economic Development, said part of the tourism funding also goes to support the Co-op Marketing Fund program, which allows local organizations in Utah the opportunity to apply for money to increase tourism opportunities in the state. An example of an organization in Utah that qualified for the co-op money is the Balloon Festival, Perry said. The office looks for programs that appeal to tourists.
"[Organizations] use state money for improved economic development [and] to market our state," Perry said.
Perry said, he too, is confident the recommendation this year will be passed by the Legislature and said it would benefit the tourism industry in Utah.
"I think the chances for [passing] it are high," he said. "The positive benefits from that money will be felt immediately in the state."
Von der Esch said, while winter sport tourist visitation has been high in Utah, one problem Utah did see during the past three years was a dip in national park visitation. She said what might help that problem is to push more ad campaigns for national parks, as well as encouraging Utahns to vacation inside the state.
"If we can continue to show our own people why they don’t have to go out of the state for a vacation If you live in Park City, you can go to Moab instead of going to California," von der Esch said.
Another interesting fact van der Esch pointed out was that Utah did not see a drop in visitors due to expensive gas prices the last several years.
She said she believes Park City and Utah have everything it takes to attract more tourists every year.
"We’ve got a good product to sell," von der Esch said. "Our message is good."
She also mentioned that Utah taxpayers benefit from increased tourism sales. She said the average household tax relief three years ago was $450. Because of an increase in tourism dollars, she said the average tax refund increased to $708. However, with the short revenue in the budget this year, legislators fear they will not be able to provide a tax cut.
Until the Legislature decides whether or not to pass the recommended appropriation, Perry emphasized that tourism dollars do a lot for the state.
"We can show a good return on investment in this state from those dollars," he said of the annual funding.