Saturday, March 24, 2012

Purely a Bailout

A happy group of owners and managers of resorts, hotels, sporting goods stores, and various tourist attractions has gathered this weekend to try to convince our governor to permanently cement their hands into our taxpaying pockets.

It is safe to say many of these entrepreneurs strongly opposed on ideological grounds federal taxpayer support for financial institutions that saved our, and probably the world, financial system just a couple of years ago.  Never mind that the banking loans have largely been repaid.  And don’t bother to mention that the federal government turned a profit by collecting interest on large chunks of the emergency money.  Bailouts are bad, say conservative business owners.

Apparently,  taxpayer financing is only “creeping socialism” outside “the proper role of government” when it goes to someone else.

The tourism conferees have gathered in Grand Rapids to consider “Delivering on the Pure Michigan Promise.”  Pure Michigan is a promotional campaign designed to lure vacationers to come to the state to experience Michigan’s wonders.  We do have many attractions, including great natural beauty in the coastal and northern areas. It seems only good and right that resources should be allocated to telling the Pure Michigan story. The question is: “Whose resources?”

State support for tourism is nothing new here or elsewhere.  However, with Michigan’s economy reeling from one job loss after another in 2008, Governor Jennifer Granholm took it big time.  She transferred $45 million from a job trust fund to finance the Pure Michigan ad campaign for three years.   The campaign went national. Now there’s talk about wooing international visitors.

Current Governor Rick Snyder, who is an avowed budget cutter in some areas, has proposed a $25 million budget item to continue the Pure Michigan campaign next year. The program is run by the Michigan Economic Development Corporation’s Travel Michigan Division.  It claims to have created $2 billion in new tourism spending since 2006.

This year there’s a new wrinkle to the ad campaign.  Two cities, Mackinac Island, and the Henry Ford Museum in Dearborn are chipping in several million dollars in total to assure they will be featured in some Pure Michigan ads. Aha, that’s a good thing.  Some of those who stand to benefit are willing to pick up a share of the tab.

The tourist industry has conducted a spirited public relations campaign trying to demonstrate that Michigan benefits from about $3 in tax revenue for every $1 invested in the tourism campaign. Wonderful.  Of course there is no mention that the owners of  tourism-related businesses are the chief beneficiaries of the taxpayer investments.  Other statistics show the Michigan tourism sector recovering at a rapid pace from the Great Recession.

Pure Michigan is such a good deal that the industry people now are pushing for a mechanism to ensure long-term state funding.  “Anything the legislature creates, they can uncreate,” the vice president of the Michigan Travel Council is reported to have said.  He said he thought the currently proposed $25 million budget item was “adequate.”

I say if the program is so wonderful those business owners, communities, and tourist attraction operators who benefit should be willing to pay for all of it.  This could be arranged over time with some simple legislation.  How about this:

Approve the $25 million budget item for next year only.  Mandate that it then will be reduced by $1 million each year for the next 25 years.  If those who benefit  want to maintain the program indefinitely, they could make contributions to replace the million dollar annual withdrawal of taxpayer money.

The tourism industry people would continue to enjoy their bailout for a long time, but their hands gradually would be withdrawn from our pockets.


Kay Dennison said...

I think that you make excellent sense! And that, my friend is why it will not happen. Making sense has left the building. said...

The Pure Michigan campaign is snake oil and the program should be de-funded and killed. Your proposal notwithstanding.
Tourism is a zero sum game... Ohio and Illinois and all other states claim the same success as Michigan. Where do Michiganders tour? FL? HI? NY? Of course! If tourism campaigns are is such an economic success why aren't tourism businesses willing to spend their own bucks rather than burden taxpayers?

Its Pure Subsidy!

Sightings said...

Your proposal makes sense to me. But (sing along now) "I ... Love New Yorrrk!"

schmidleysscribblins, said...

If we ever rid oursselves of the corporate welfare we lay out in our free enterprise system, will we fall apart? I have to say, one reason I supported Simpson-Bowles was because it was going to make a difference with regard to tax deductions by corporations.

A group of Congressmen (Dems and Republicans) have been working quietly behind the scenes to push legislation that would place Simpson-Bowles in the next budget go-around. Sounds like you need an overhaul in Michigan too.