LANSING – A plan passed by the House to fund the Pure Michigan advertising campaign through assumed increased revenue in sales tax collections that come from tourism-related expenditures is faulty, the lead senator on tax policy said Thursday.

Sen. Nancy Cassis (R-Novi), chair of the Senate Finance Committee, said sales tax revenues continue to decline and could not possibly be expected to fund a $40 million promotional campaign.

“These bills as constructed, don’t work,” she said after a committee hearing on the issue. “They just simply don’t work.”

However, Cassis said she wants to help the tourism industry and will instead ready a supplemental appropriations bill to pump perhaps another $9.5 million into the Pure Michigan campaign this fiscal year. Lawmakers and Governor Jennifer Granholm appropriated $5.5 million this year, down considerably from the more than $30 million allocated in the 2008-09 fiscal year.

Cassis said Senate Republicans and staff are preparing a funding mechanism for the additional money.

“We want to be of help and want to work with them,” she said. “The state has many needs – schools, Medicaid, support to our local police and fire services – real necessities. Whether it is affordable to carve out $35 million is a tough sell at some point.”

But Cassis also questioned the state essentially paying for services that the private sector should handle on its own.

“The Pure Michigan campaign, no question it was very inspirational and put Michigan in the best possible light,” she said. “But whether or not it brings in anywhere near $30 or $35 million a year back in investment, that’s extremely unlikely. The state can’t continue to be a bank for the private sector.”

Cassis’ comments came after a series of tourism industry officials pleaded with the Senate to keep Pure Michigan funding intact and a day after Granholm urged the Legislature to fund the effort.

Michelle McWilliams, director of the Michigan Snow Sports Industry Association, said Pure Michigan’s winter advertising campaign is still having ripple effects. Even as the economy has been awful, ski resorts are having solid numbers, McWilliams said.

“This was, like, wonderful for us,” she said. “I believe that one of the reasons for our successful season was the Pure Michigan winter campaign. … People are coming up to Michigan because they’ve seen these wonderful ads and they know it’s a beautiful place to come.”

With only $5.4 million available, the state cancelled its winter campaign this year.

Steve Yencich, president and CEO of the Michigan Lodging and Tourism Association, said it would be a terrible mistake for the state to let the Pure Michigan campaign lapse.

“What’s the old marketing dictum? It takes seven hits to make a sale,” he said. “You’ve just begun that process and if it goes dark, we have collectively wasted that $30 million investment.”

Lisa Dancsok of the Michigan Economic Development Corporation said the MEDC needs to know by the end of this month whether it will have more money to have enough time to purchase advertisements. “We need fast action,” she said after presenting figures showing big increases in tourism as a result of the advertising campaign.

Democrats on the committee said the Pure Michigan campaign clearly had proven a success and merited more funding, whether through the bills passed by the House (HB 5088 , HB 5089 ) or another mechanism.

“Gosh, I just can’t think of a better thing to be doing to help the future of tourism in this state,” said Sen. Deborah Cherry (D-Burton). “I hope that we can do this quickly so they can buy the ads at a reasonable cost.”

There is Senate legislation (SB 619 , SB 620 ) similar to the House bills sponsored by Sen. Jason Allen (R-Traverse City).

Rep. Dan Scripps (D-Northport), one of the House bill sponsors, expressed disappointment with Ms. Cassis’ comments.

“I’m frustrated. This has the universal support of the tourism industry,” he said. “It’s a slam dunk. We should have acted long ago. And yet, even on this we’ve just been treading water and we’re losing jobs as a result.”

Scripps said the numbers he’s seen show that although overall sales tax revenues are down, the sales tax collected from tourism-specific expenditures is up, creating the additional revenue necessary to pay for Pure Michigan ads. If Cassis has another method to fund the program, Scripps said he’s willing to look at it.

He said the $9.5 million cited by Cassis is about what his legislation would have raised in the first year.

“There’s no pride of authorship. I just want it funded,” he said.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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