A conservative think tank that is influential with the state’s Republican-controlled Legislature wants to abolish the Utah Office of Tourism.
The recommendation is one of 10 offered by the Sutherland Institute as the state faces an estimated $850 million budget shortfall and is a rebuke of the policies put in place by former Republican Gov. Jon Huntsman.
Huntsman, a moderate who is now the U.S. ambassador to China, made developing and promoting tourism in the state one of his economic development priorities. He increased the tourism department’s annual advertising budget from $900,000 _ roughly Vail, Colo.’s summer ad budget _ to about $10 million in 2005. He also pushed through liquor law reforms to make the state more appealing to tourists that the Sutherland Institute opposed, saying it compromised state values for the sake of making a dollar.
In a position paper the think tank is circulating to state lawmakers, the institute says the growth in tourism spending is a waste because air travel hasn’t grown enough and visitation to state and national parks has declined from their peak in the late 1990s. The institute contends money could be better spent elsewhere.
“The point is, we’re not getting a great return on our dollars that we’re spending,” Sutherland Institute Policy Manager Derek Monson said.
In fact, tourism travel and spending have reached record levels since the infusion of funding came in 2005. Visitation increased from 17.5 million in 2004 to 20.4 million in 2008 as spending by tourists increased from $5.6 billion to $7.1 billion.
Tourism officials also note that state and local governments have received more than $12 in tax revenue for every $1 spent on advertising.
“The tourism industry is one of the few agencies in this state that is really making a buck to put back in the general fund to pay for those things,” Ski Utah President Nathan Rafferty said. “Now is absolutely not the time to scale back. … This is a cash cow in Utah. Whether its skiing or hiking in Moab and St. George and our national parks, it makes a whole lot of sense to continue the support.”
The Governor’s Office of Planning and Budget estimates that tourism spending reduced the tax burden on each Utah household in 2008 by about $708.
Sutherland Institute Policy Manager Derek Monson said he was unaware of the state’s return on investment figures “When you think about it, the reason people come to Utah is because of the things there are to see here in Utah, not because the government spends a lot of money promoting tourism,” Monson said, noting that he didn’t have anything beyond anecdotes to base that on.
Among the institute’s other recommendations are placing a moratorium on granting tax incentives for businesses to locate or stay here, claiming it unfairly “gives those companies a competitive edge over their competitors.”
Spencer Eccles, director of the Governor’s Office of Economic Development, says Utah would have a difficult time rebounding from an economic recession and competing with other states for businesses if it stopped offering tax incentives.
“We’re going to have a real challenge if we’re just going to grow organically,” he said.
Gov. Gary Herbert spokeswoman Angie Welling said while Herbert is looking to cut costs without raising taxes, he plans to keep the tourism department intact and continue offering incentives.
“They fail to contemplate the long-term economic development benefit these programs bring to the state of Utah. Economic development is a cornerstone of Governor Herbert’s administration, and these programs position Utah as a place to visit and do business both today and for many years to come,” Welling said.