DCED Secretary: Tourism Budget Cuts in House Republican Budget Proposal Would Have Detrimental Impact on PA’s Economy

Harrisburg, PA – In a letter sent to the chairs of the Senate Committee on Community, Economic & Recreational Development and the House Commerce Committee, Department of Community and Economic Development (DCED) Secretary Dennis Davin warned lawmakers of the negative impacts of the House Republican Caucus’ bill (HB 218, PN 1236) on the state tourism industry, which generates tax revenues that directly fund vital services for Pennsylvanians.

“The proposed cuts to the Marketing to Attract Tourists line item in the House budget bill are not only deeply concerning to DCED and Pennsylvania tourism, but they would eliminate significant tax revenues that are used to pay for public safety, education and other critical programs statewide,” said Davin. “Tourism is one of Pennsylvania’s most robust industries, and it is substantially underfunded as it is – a further cut would simply be damaging to our state’s economy.”

The proposed HB 218 budget, which slashes Governor Tom Wolf’s proposed budget of $10 million for Marketing to Attract Tourists to $2.5 million, would result in:

  • $469.7 million lost in foregone visitor spending
  • $27.5 million lost in foregone state tax revenues
  • $10.0 million lost in foregone local tax revenues

According to the Pennsylvania Restaurant & Lodging Association’s (PRLA) 2015 economic impact study, every $1 invested in tourism marketing generates $3.43 in state tax revenue, which can be used for to pay for public safety, education and other essential programs. The tourism industry also supports more than 310,000 jobs directly, and close to 500,000 jobs in total.

“We know that Pennsylvania currently has a revenue problem – and tourism marketing is an important part of the answer,” said Davin. “As we attract more visitors to the state, they fill our hotels, restaurants and main streets and spend additional money at attractions and landmarks. While other state priorities are certainly vital, few will have the immediate return on investment that tourism does.”

Pennsylvania is currently outspent by, and losing visitors to, competitor states. Despite having one of the largest tourism economies, Pennsylvania’s tourism marketing budget is substantially underfunded compared to its competitors – outspent 5:1 by New York, 3:1 by Virginia and 2.5:1 by Washington D.C., according to PRLA.

Secretary Davin noted that the state began cutting Pennsylvania’s tourism marketing budget in 2009, which has had a considerable negative impact on the state’s revenue stream.

“Less than a decade ago, we were investing $30 million each year in tourism marketing and promotion – and today, Pennsylvania is widely recognized by the tourism industry nationally and internationally as a case study of what happens when a state substantially cuts its tourism budget,” said Davin. “Money ‘saved’ has been money lost for Pennsylvania.”

According to the PRLA study, during the past six years, cuts to the tourism marketing budget have caused Pennsylvania to lose more than 37 million visitors, $7.7 billion in visitor spending, $3.2 billion in labor income and almost $450 million in state taxes.

In stark contrast, New York state dramatically increased its funding for tourism marketing – from $15 million to more than $37 million – and saw a 46-percent gain in market share among its nine competitor states.

“I am undoubtedly dedicated to being a good steward of taxpayer money, but a robust tourism marketing budget isn’t an expense for taxpayers; it’s ultimately an investment into transportation infrastructure, education and public safety programs,” said Davin. “I urge legislators to take a hard look at Governor Wolf’s budget proposal, which would begin the process of restoring Pennsylvania’s marketing budget and attracting more visitors to Pennsylvania. While even $10 million isn’t the level where Pennsylvania needs to be, it’s a giant step in the right direction – and would offer an immediate shot in the arm for our state’s economy. Investing in tourism is investing in Pennsylvania.”

DCED Press Office, 717.783.1132

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