Terry Mattson: Let's make Minnesota more competitive
- Blog Post by: Howie Hanson
- December 4, 2012 - 4:03 PM
A monthly column by Terry Mattson, Visit Duluth's President/CEO, which first appeared in Forum Communications' Duluth Budgeteer News weekly:
In the coming weeks a fast growing number of us will be working closely with elected officials, constituents, suppliers, employees and partners positively putting forth a proposal important to our state's future. This is an opportunity to dramatically grow travel and tourism.
You see, Minnesota needs to step up and diversify its source of promotional funding in order to attract more out-of-state visitors. In fact, we need to reform how Minnesota funds tourism marketing to stay competitive. Tourism is fueled by promotion. Advertising requires investment. Minnesota is being significantly outspent by its competitors.
The Minnesota tourism budget ranks 30th in the nation and is at its 1990 dollar level. Nearby competitors, such as Wisconsin, South Dakota, Illinois, Michigan and Montana invest far more. We are losing the ability to even retain resident travel, let alone increase travel from other states and countries.
Tourism makes vast contributions to our quality of life. Hospitality generates $730 million in annual sales taxes collected on $11 billion of sales. Statewide, we employ 240,000 people (11% of private sector employment) from entry-level positions to high level managers and business owners. Tourism is documented as one of the better ways for generating employment and also rewards government with more tax revenue per dollars spent by consumers than other industries.
We can do even better for the residents of Minnesota!
The proposal pivots on a car-rental tax, established for the tourism industry hosting the Super Bowl. Afterwards revenues quietly then slipped into the general fund. If advertising were fueled by the 6.2% motor vehicle rental tax, the state's tourism investment would be $15 million. The current tourism budget of $8 million comes from the general fund.
The new performance-based plan makes perfect sense: visitors are paying to attract even more visitors. While not up to Michigan's $27 million, it would be competitive considering the average tourism office budget is $14 million.
There are many strong proponents of updating the antiquated model. Visit Duluth is in full support. Consider that based on a Department of Employment and Economic Development (DEED) study, the additional $7 million in advertising would generate more than a three-to-one return on investment through an estimated $24 million in new state and local taxes, $107 million in wages, 3,600 new jobs and $276 million in gross sales.
The new revenue from our guests would generate a significant return. It means more money for education, health care, natural resources, social services, transportation and more. There are very few ways government can generate revenues and jobs-tourism does both. It opens doors for all economic sectors. It portrays Minnesota as a good place to live, do business and play.
Marketing is an investment -- not a cost to taxpayers. Let's get the drum beat going!
-- Published with permission of Duluth Budgeteer News, Visit Duluth
© 2014 Star Tribune