No action on tourism funds plan

A plan to raise hotel and restaurant taxes and shift rental-car funds to help pay for tourism advertising met with a bit of support and a bit of resistance Wednesday.

The Legislature's Workforce Services and Community and Economic Development Interim Committee ultimately took no action on the plan proposed by the Utah Division of Travel Development board, also known as the Utah Travel Council advisory board.

Elements of the board's proposal include a 0.5 percent hotel room tax and a 0.25 percent restaurant tax as ways to get up to $20 million to advertise Utah to out-of-state potential tourists.

"We believe that the impact of collecting these funds and using them for a dedicated advertising program for the state of Utah will have at least a four-to-one return on investment and will create an economic stimulus through one of the largest economic engines we have in the state, which is the tourism industry," board chairman Randy Harmsen told the committee.

"All of us know that our economy needs a good stiff kick, and we think this is probably the most effective, fastest way to do it."

A video of the proposal indicated the tourism boost from increased advertising could generate $1.3 billion in new revenues, providing $80 million in state taxes, plus tax money for counties and cities.

The current advertising setup "is to try to attract people from Logan to St. George or Manti to Salt Lake, or vice versa. We're not getting new people in," Harmsen said.

"Something needs to be done. Our current economic model for advertising the state of Utah does not work. The question is how we make it work. I think the industry would like to see more general funds. As I listen to the Legislature, there's not enough general funds."

He estimated that the room and restaurant taxes would be 60 percent paid by tourists and 40 percent by Utahns.

"We're putting the final details on this legisaltiion. We're going to bring it to the Legislature for approval. We believe it is something that's required. We believe it's something we need in this state for economic stimulus. We believe that the velocity of the tourist industry gives us the fastest return," he said.

Committee co-chairman Rep. David Cox, R-Lehi, said he has received letters from restaurant owners opposing the proposal.

"And I guess I want to make a statement to them: They're saying we need to have this and it's very important but it needs to come out of the general fund," Cox said. "I'm just going to say I'm not going to take one dime out of the general fund, because it comes right out of education.

"If this is that important, then we need to do it the way it's proposed. . . . There is no money in the general fund right now in the state of Utah to do it. If this is important enough to have, and it is, then let's get behind this. Otherwise, there won't be anything."

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