Early in this year’s Legislative session, some lawmakers, businesspeople, and state officials became alarmed by the remarks an economist made during a Senate committee hearing.

The economist, Tom Kavet, noted that while the Department of Tourism and Marketing’s budget  had gone down over the past few years, — to $3.6 million from $5.1 million in 2002 — more tourists were visiting the state.

Kavet never suggested doing away with the Tourism and Marketing, though he did doubt that its activities had “significant near-term impact,” setting off worries that the Department’s funding was in danger.

“It got some people a little excited,” said Rep. Heidi Scheuermann, a Republican from tourist-dependent Stowe,

So Scheuermann, the Vermont Chamber of Commerce, the ski industry and the Department itself went to work to make sure that its budget wasn’t cut.

They succeeded. For now at least (pending possible further cuts because of the “Challenges for Change” process) Tourism and Marketing gets the same $3.6 million for Fiscal Year 2011 as for 2010.

So the “Crisis” – well, the argument – is over, at least for now. But the question has not been answered.

Make that two questions: Does the advertising done by Tourism and Marketing really bring more tourists to Vermont? And even if it does, should the taxpayers be paying for it? After all, ski resorts, golf courses, restaurants, marinas and the like are private, for-profit businesses. Most private, for-profit businesses pay for their own advertising and promotion. Why shouldn’t tourist businesses?

Without a doubt the answer to that first question is not a definite no. Advertising works; otherwise businesses would not spend billions of dollars a year to convince people to buy their product or their brand.

And that’s what Tourism and Marketing does, said Bruce Hyde, who heads the Department.

“We’re really the brand managers,” he said. “We saturate the media as best as we can with the Vermont message. Nobody else is doing that.”

And there is at least some evidence that it works. Erica Housekeeper, the Department spokesperson said (by email) that Tourism and Marketing’s web site “received an average of 66,600 unique visitors per month…and we see a bump in web traffic when we launch an advertising campaign.”

Probably more visitors to the web site means more visitors to the state. But “probably” does not qualify as data. It’s not as though the “Vermont brand” is unknown around the country. Perhaps many people, bombarded by promotion from every state and many countries, have to be reminded from time to time of Vermont’s existence as well as its charms.

But “perhaps” does not qualify as data, either.

In fact, one seeking data confirming that Tourism and Marketing promotions bring more visitors to the state will seek endlessly, and still probably not find.

Even confirming the effectiveness of the tourist promotion would not conclusively prove that the $3.6 million was well spent. It would depend on which criteria were used to make the judgment: That the extra visitors (the ones who wouldn’t have come anyway, without the Department’s promotions) had spent so much on hotels, restaurants, and gasoline that the tax revenue added up to $3.6 million? Or that their visits created enough additional jobs that the take from those taxes was $3.6 million?

Not that Vermont is going to abolish its Tourism and Marketing Department, which would be an act of unilateral disarmament. All the other states have similar agencies, and almost all of them spend far more than does Vermont.

“We arguably have the smallest state budget for tourism,” Hyde said, even though Vermont is “one of the states most dependant on tourism.”

Even with a lower budget and a staff that has dropped to nine from 20, the Department seems to be doing a good job. Maybe tourism has gone up even as the Department spends less money because it’s grown more efficient and innovative. Tourism and Marketing doesn’t just promote Vermont, Hyde said. Its web site provides a full-service, one-stop vacation planner for would-be visitors.

“It’s a free service for the entire industry,” he said.

Bringing up that second question. Why doesn’t the industry provide that service for itself? A lot of other businesses would like the state to do their promoting for them, too. Just to take one example out of thin air: suppose the state financed the promotion for start-up news web sites, especially those run by a proprietor who is uncommonly inept at the task?

Who knows? The web site might prosper so much that the proprietor could hire a local unemployed person as a part-time researcher. Presto! Job creation. Economic development.

OK, that’s neither a complaint nor a suggestion. Just an example to demonstrate that the state selectively showers its subsidies on favored industries.

Scheuermann calls that kind of thinking “short-sighted,” because “government entities support anything else with regard to people having jobs, to make sure that people are able to pay their bills and able to go to college.”

Except for the “anything else” part, she’s right. To maintain a healthy economy, government does support many private enterprises with direct or indirect subsidies. The difference with the tourism industry is that the subsidy is direct – a state agency picking up the tab for one of its major expenditures – rather than the more common tax breaks (though the state also forks over cash to some other businesses).

We’re not talking about a lot of money here; were the Department shut down entirely, the money saved would chop less than half-a-cent off the statewide school property tax rate.

But hidden in this discussion is an interesting – and indisputable – conclusion. There’s a lot of talk in this state (and country) about whether the government does too much and spends too much. This discussion about subsidizing Vermont’s tourist industry proves who really believes the government is doing and spending too much:

Nobody. Not if it’s doing and spending on them and theirs.

Tags: Bruce Hyde, Tom Kavet, Tourism

This entry was posted on Friday, June 11th, 2010 at 12:18 am and is filed under Business & Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.