Office of Marketing

The governor’s big proposal for the Department of Tourism in his 2015-2017 proposed budget included moving all marketing positions in each state agency to the Office of Marketing in the Department of Tourism. The governor’s proposal established eight positions to staff the Office of Marketing and provided $734,700 PR in 2015-2016 and $693,000 PR in 2016-2017. In addition, his proposal deleted 29.8 marketing positons in other agencies and reallocated funding from salary and benefits to supplies and services for agency payments. The Joint Finance Committee (JFC) voted to cut the governor’s new funding in half, therefore only creating four new positions for the new Office of Marketing. JFC maintained the governor’s proposal to delete the 29.8 positions in other agencies.

Room Tax Changes

JFC offered and approved changes to the state’s room tax structure. Under current law, municipalities are authorized to impose a room tax on establishments providing rooms or short-term lodging. In 1993, the room tax law was changed. Municipalities were allowed to implement a maximum tax rate of up to eight percent and directed at least 70% of revenues from the room tax towards tourism promotion and development. The remaining 30% of local room tax revenue can be used for purposes unrelated to tourism promotion and development under the municipalities’ discretion.

JFC approved changes current law to require 70% of the room tax revenue be passed on to a tourism commission or entity to use the revenue on tourism promotion and development. The tourism commission or entity would be in charge of spending the funds on tourism and development instead of the municipality. Municipalities subject to the eight percent room tax rate that currently retain more than 30 percent of local room tax revenue for non-tourism purposes could potentially face a phase-in process for right-sizing the appropriate revenue retention. These municipalities would face a 5-year phase-in to reduce these amounts to the greater of 30 percent or by 2020, the dollar amount that was retained in 2009.

The full legislature made some modifications to the JFC provision. They extended the time frame for full implementation, extended the date for when a tourism entity needed to be in existence and pushed back the date in regards to when a municipality is subject to a contract that needs room tax revenues to satisfy the terms of the agreement. These amendments were adopted in the budget passed by the Senate and the Assembly.