Wednesday, March 25, 2015

Tourism Funds Targeted By Baker Budget


Center Of Hope Also Targeted (see below)


Gov. Charlie Baker is proposing an $8 million cut to state funding for the Office of Travel and Tourism and would come close to eliminating state funding for regional tourism councils.

Officials from the tourism councils say the money is an investment, which is paid back many times to the commonwealth through increased tax revenue and spending by tourists. The Democratic-controlled Legislature has restored governors' proposed cuts to tourism in past years and is likely to do so again. 

"There's not a lot of appetite in the Legislature for supporting this type of really extreme cut," said state Sen. Eric Lesser, D-Longmeadow, the Senate chairman of the Joint Committee on Tourism, Arts and Cultural Development. "These cuts would be devastating to an industry that has the third largest employment in the state of Massachusetts."

While Boston is the state's biggest tourist destination, areas like the Berkshires and Springfield could also feel the sting. Lauri Klefos, president of the Berkshire Visitors Bureau, said the state money is an investment with a strong return.

"Promoting tourism brings visitors from outside the area into the area with dollars to spend, and some of those dollars through tax collections go back to support the commonwealth and local communities so they can spend those on other programs," Klefos said.

Baker's proposed budget would cut funding for the Massachusetts Office of Travel and Tourism from $14.2 million in fiscal year 2015 to $6.1 million in 2016. Paul McMorrow, a spokesman for the Executive Office of Housing and Economic Development, said part of the savings would come from lowering spending on a contract with the ad agency Connelly Partners. According to a state spending database, the Office of Travel and Tourism paid Connelly Partners $4.6 million in fiscal year 2014 and another $2.7 million in fiscal year 2015, which ends in June.


Steve Connelly, owner of Connelly Partners, said some of that money went directly to the cost of purchasing media advertising. The company also does strategy consulting, digital marketing, the state tourism website, social media, promotional materials and other work.

Connelly Partners takes an $860,000 base consulting fee annually for domestic marketing. Most of the rest of the money goes to media and media production, so it only passes through the firm. However, a small amount of the remaining money is for other work like international marketing, which is billed separately. The firm did not provide an exact figure for that work.

Connelly said he is not aware of the proposed budget cuts. "The governor's in a tight spot. He's going to do what he needs to do to get the numbers to match up," Connelly said.

But, Connelly added, "Tourism is a pretty big economic engine. It's money spent to get money earned."

The savings also comes from eliminating earmarks. The 2015 budget contains dozens of earmarks for tourist destinations and unrelated programs, including: Chinese and Russian associations; various museums; Westfield on Weekends; the Stone Soul Annual Community Festival in Springfield; the Galaxy Community Council, which supports military members at Westover Air Reserve Base; the Monson Bellman, which displays Monson fire department memorabilia; a weekend backpack program in Gateway Cities; $60,000 for the Center of Hope Foundation, which helps people with disabilities, in Southbridge; and other programs around the state.

Also in Baker's budget, funding for the state's 16 regional tourism councils, which market their regions to tourists, would drop from $5 million to $500,000. The budget would convert all the funding into competitive grants.

There would be some additional money set aside for international tourism marketing to take advantage of new international non-stop flights into Logan Airport.

McMorrow said the administration believes funding for the tourism councils has "morphed into entitlement funding." "We're sending a message that this is not entitlement funding," McMorrow said. "We're happy to fund councils that have accountability and can show results."

Spending on the Office of Travel and Tourism jumped from $2 million in 2012 to $7.3 million in 2013; $13.8 million in 2014; and $14.2 million this year. The regional tourism councils have been funded at levels ranging from $5 million to $7.5 million over the last four years.

Tourism officials say the money is a worthwhile investment. The state funding of regional tourism councils is matched by private money, often from local businesses.

Suzanne Beck, director of the Hampshire County Regional Tourism Council, pointed to a study by the U.S. Travel Association which found that in 2013, travelers spent $18.5 billion in Massachusetts; travel expenditures generated 129,400 jobs; and travelers generated $2.7 billion in federal, state and local tax revenue.

State tax revenues from visitors have been increasing. According to a 2013 report by the Massachusetts Office of Travel and Tourism, the state tax on hotel rooms generated $194.6 million in fiscal year 2013, up from $160.9 million in 2010. Local hotel taxes raised $155.7 million in 2013, up from $89.8 million in 2010.

"It's the third largest industry in Massachusetts, and it has an outsize impact," Beck said. "We're bringing new money into the state that wouldn't be here if it weren't for the fact that people visit."

The Hampshire County council maintains a website, blog and subscriber newsletter that reaches 1,800 people. It advertises in New York, Connecticut and Massachusetts.

"The allocation for regional tourist councils is really an investment. It's not a cost, because the return is several times larger that what the actual cost it," Beck said.

Laurie McDonald, director of marketing for Yankee Candle in South Deerfield, which has activities at its flagship store, said the Greater Springfield Convention and Visitors Bureau, Springfield's regional tourist council, has been "a great partner in helping promote tourism in the (Pioneer) Valley."

McDonald said Yankee Candle and the bureau partner for advertising in tourism publications. The bureau publicizes Yankee Candle in blogs, presentations to visitors and discussions with writers about area attractions.

"They take great care of us," McDonald said.

Mary Kay Wydra, president of the Greater Springfield Convention and Visitors Bureau, said her organization received around $200,000 from the state this year. The bureau publishes a guidebook and advertises in Connecticut, New York and Boston, talking about attractions like the Basketball Hall of Fame and Six Flags.

"It's a great model, because it's a public private partnership," Wydra said. "For every dollar we get from the state, we match it."

Historically, the Legislature has often restored proposed cuts to tourism spending.

Lesser said he has been talking to colleagues in the Senate about restoring some money.

"Tourism spending has a tremendous multiplier effect, and it pays for itself through meals taxes and hotel taxes," Lesser said.

Lesser said Springfield is at a "critical juncture" in attracting tourism, with the impending MGM casino, two new planned hotels and a new Dr. Seuss Museum in the works.

"It would be very dangerous to make draconian changes at a time when we're just now getting that industry back on its feet after a tough recession," Lesser said.

State Rep. Michael Finn, D-West Springfield, a member of the Joint Committee on Tourism, Arts and Cultural Development, said although he wants to hear from the administration about why it is making the cuts, he disagrees with them "wholeheartedly." "I think it's a shortsighted position to take," Finn said. 

Finn said there may be room to consolidate some smaller councils with larger ones. But, Finn said, "I think the system is working well now, and these groups are doing well.

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