In what has become one of the most turbulent budgeting processes in recent state history, Missouri's travel industry learned this week that the Missouri Department of Economic Development has ordered the Division of Tourism to cut $7 million from its current budget, an amount equivalent to 35 percent of the agency's appropriated budget. Of even greater concern is the fact that the cut represents nearly 64 percent of the $11.3 million in total withholdings issued by the Governor's office for the Department of Economic Development.
Travel industry associations discovered the inequitable distribution of the department's recommended cuts this week. With the exception of the Division of Tourism, most agencies within the department are being ordered to trim their budgets by 10 percent — several of the department's programs remain completely unscathed.
A reduction of this magnitude will force the Missouri Division of Tourism to significantly curtail its 2009-2010 advertising campaign, a move that will most certainly result in a reduction in the number of in-state and out-of-state visitors. Communities large and small rely not only on the state's advertising campaign, but also its efforts to promote the state to group tour operators and other niche markets that support Missouri's attractions and hotels.
Last year, every dollar spent on tourism marketing returned $48.13 in visitor expenditures, and Division of Tourism efforts generated $2.46 in state tax revenues for every dollar spent, according to the division's 2008 annual report. Even through the tumultuous economic climate of the past year, tourism has remained a steady positive force. A $7 million cut in the Division of Tourism's budget will only exacerbate the state's revenue problem.
While Missouri's tourism industry can certainly understand the need to address the projected shortfall in state revenue this year, the deparment's disproportionate distribution of those cuts illustrates an attempt to unfairly force one agency to shoulder the bulk of its overall budget reduction. In addition, the recommended cuts disregard the legislative process through which lawmakers allocated funding during the most recent legislative session. Legislators approved funding of just under $24 million in May. A month later, Gov. Nixon trimmed nearly $6 million from the state's tourism budget, and control of division expenditures was handed to the Department of Economic Development, a move that is in direct violation with the organizational charter of the Division of Tourism. As a Type 3 agency, all budgetary decisions governing tourism expenditures are overseen by the Tourism Commission, according to state statute. At the same time, the Department of Economic Development questioned the Division of Tourism's allocation of $1.5 million to the Tour of Missouri professional bike race. Funds were eventually released for this year's race, much to the relief of the communities that had made their own investments in preparation for the Tour of Missouri. A one-time injection of $3 million in federal stimulus money was later allocated to the Division of Tourism, however this week's move completely negates the stimulus assistance and places the Division of Tourism at risk during next year's budget process.
At a time when the State of Missouri is looking at preserving its business environment and retaining jobs, the Department of Economic Development surely must understand that these inequitable cuts will have dire consequences in both the near and distant future.
Mishell Hoover is president of the Missouri Travel Council in Jefferson City.