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Friday, May 29, 2009

Will Tourism Collapse Without Taxpayer Subsidies?

Letter sent from the Commonwealth Foundation to Pennsylvania Deputy Secretary of Tourism Mickey Rowley

Dear Mr. Rowley:

I am writing to respond to the Pennsylvania Tourism Office’s recent press release on Senate Bill 850. We contest the claim that reduced state tourism spending will “severely impact Pennsylvania’s economy by costing thousands of jobs and closing small businesses.” This backward, reactionary thinking confuses the cause of Pennsylvania’s budget deficit for its solution.

You note that in 2008, Pennsylvania’s tourism industry provided $18 billion in wages. Clearly, the industry has enough revenue coming in to fund its own advertising and promotion; it doesn’t need a few million dollars in taxpayer handouts.

Furthermore, you provide misleading statistics in your press release by only accounting for Marketing to Attract Tourists while excluding funding for Tourism Promotion Assistance. Senate Bill 850 appropriates $13.5 million to promote tourism. This is far too much taxpayer funding for something which is not a core function of government, and which has not improved Pennsylvania’s economic climate. Indeed, the $25.7 billion contributed by visitors to Pennsylvania is an increase of only 15 percent from 2003, yet state taxpayers’ subsidies to the tourism industry increased 41 percent over the same period.

Your citation of the Colorado experience undermines your claim that reducing tourism spending would damage the economy. Colorado’s overall economic growth went from the bottom of the 50 states to near the top during the 1990s. Furthermore, you cite Ohio, Michigan, and California as exemplary examples of states which subsidize tourism. Yet these three states are the worse for it—all rank near the bottom of the nation in economic growth business climate. All are losing residents to other states, and rank among the leaders in out-migration (even leading Pennsylvania in this dubious category). And all are facing dire fiscal crisis due to the combination of overspending and economic stagnation. These are not states Pennsylvania should be emulating.

Most importantly, you fail to consider how higher taxes to pay for state spending will affect the tourism industry, and Pennsylvania’s entire economy. Senate Bill 850 moves Pennsylvania in the right direction, adopting fiscally responsible policies that decrease tax burdens and put spending decisions back in the hands of citizens. This will draw tourists and businesses to the state better than any government agency.

In Liberty,

Matthew J. Brouillette
President and CEO

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