Tourism advocates plead for dedicated source of annual funding [The Day]

April 24, 2017

Formica 2017-04-24 Tourism Press Conference and Caucus (6 of 12)

Article as it appeared in The Day

Hartford — The “choir” seemed to get the Connecticut Tourism Coalition’s message.

Now, how will it go over with the rest of the General Assembly?

The coalition, an alliance of more than 100 representatives of various sectors of the tourism industry, rallied Monday in a meeting room at the Legislative Office Building, calling once again, on “Tourism Advocacy Day,” for legislators to dedicate a portion of the state’s hotel occupancy tax revenues to tourism promotion.

Following the session, more than a dozen members of the legislature’s tourism caucus convened.

“I think we’re talking to the choir,” Stephen Tagliatela, president of the coalition and managing member of the Saybrook Point Inn, Marina & Spa in Old Saybrook, acknowledged, urging caucus members to support the coalition’s position.

According to the state Department of Revenue Services, the state’s 15 percent hotel occupancy tax generated $117.8 million in 2016. Had the coalition’s plan been in effect, 3 percent of the tax (a fifth of the 15 percent) would have been dedicated to tourism promotion and would have raised more than $23.5 million.

Statewide tourism funding peaked at $15 million in fiscal 2012. It’s dwindled since then, falling to $6.4 million in the current fiscal year. Gov. Dannel P. Malloy has proposed increasing it to $8.3 million in each of the next two fiscal years.

Tony Sheridan, president and chief executive officer of the Chamber of Commerce of Eastern Connecticut, summed up the coalition’s goals.

“We have to get back to the $15 million, and we need a dedicated fund,” he said. “Then we can stop coming up here every year and making the same argument.”

Sheridan said he was “very worried” that the $8.3 million will not survive intact during the current budget process given the “enormous pressure” legislators are facing.

A bill filed late last week in the Finance, Revenue and Bonding Committee would dedicate a portion of the occupancy sales and use taxes on hotels “to promoting and developing state tourism.” It does not specify what that portion would be.

A public hearing on the bill is to be held Tuesday.

Ed Dombroskas, executive director of the Eastern Regional Tourism District, whose very existence has been threatened by the elimination of state funding, said he was optimistic that money for regional districts will be restored to the budget.

Sen Paul Formica, R-East Lyme, founder and co-chairman of the tourism caucus, said he hoped the legislature could get back to the dedicated-funding approach that was in place several years ago. Since then, all hotel occupancy tax revenues have been deposited in the state’s General Fund.

“It’s sad we’ve raided those (revenues),” Formica said. “It’s regrettable.”

Tagliatela told caucus members that Connecticut tourism is imperiled by competition from bordering states, all of which have increased their tourism-promotion budgets. New York, he said, has recently upped its commitment to $69.5 million and “is going to steal revenue from Fairfield County.”

Rhode Island has now dedicated $5 million, “almost on a par with us,” Tagliatela said, and will seek to divert a share of the Mystic-area business.

Sen. Tim Larson, D-East Hartford, a caucus member, noted that he has sponsored legislation for a third Connecticut casino that the Mashantucket Pequot and Mohegan tribes would own and operate. The bill calls for a portion of the tax revenue from the proposed casino’s table games to be dedicated to tourism. Larson said that could amount to $6 million to $9 million annually.

Tagliatela said he would be concerned about the difficulty in projecting such revenues from year to year and stressed the tourism industry’s need for immediate assistance.

“We need it quickly,” he said of funding, even suggesting it might make sense for the state to bond, or borrow, money for tourism promotion.

Stonington First Selectman Rob Simmons, a coalition member, said the biggest problem associated with the lack of a dedicated source of tourism funding is the uncertainty it creates. Andy Wood, a Mystic Aquarium vice president and chairman of the Greater Mystic Tourism Marketing Committee, agreed that creating “a stable basis of funding is critical.”

In pushing for funding, caucus members said, they must have hard evidence of tourism advocates’ claim that every dollar invested in tourism promotion returns three dollars in tax revenue to the state.

Tim Sullivan, deputy commissioner of the state Department of Economic and Community Development, said such data were readily available.