Legislature(2007 - 2008)SENATE FINANCE 532
05/10/2007 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB229 | |
| SB144 | |
| HB238 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 229 | TELECONFERENCED | |
| + | SB 144 | TELECONFERENCED | |
| + | HB 238 | TELECONFERENCED | |
| + | HB 162 | TELECONFERENCED | |
| + | TELECONFERENCED |
10:11:32 AM CS FOR SENATE BILL NO. 144(STA) "An Act relating to matching funds in state tourism marketing contracts with trade associations; establishing the Alaska Tourism Marketing Funding Task Force; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. 10:11:51 AM MARIT CARLSON-VON DORT, Staff to Senator Lesil McGuire, read portions of the sponsor statement [copy on file] into the record as follows. In 2001 the State of Alaska privatized the functions of the tourism marketing program by contracting with the Alaska Travel Industry Association. Prior to the current structure, Alaska's travel industry was promoted by a membership organization which was comprised of both private sector and State officials. Since that time the Department of Commerce, Community and Economic Development has contracted with the Alaska Travel Industry Association to design and implement Alaska's tourism marketing program. State statute currently requires 50/50 matching funds; State general funds matched by private industry dollars. The recent passage of the travel industry taxes has had the dual effect of generating significant revenues to the State's general funds, and also the potential of eliminating the viability of voluntarily raising private sector dollars required to meet that 50 percent match. Without the commitment of the cruise industry funding the Alaska Travel Industry Association's ability to successfully market Alaska and compete with travelers in the national and worldwide marketplace is greatly compromised, particularly with respect to those independent travelers, those people that are coming to Alaska on their own via the Alcan highway or flying into our airports, and this is a particular area of visitors that has remained relatively stagnant and even declined in the last several years. 10:13:40 AM Ms. Carlson-Von Dort continued her testimony as follows. Senate Bill 144 will allow Alaska's travel industry to continue to receive State funds by temporarily changing the statutory match required in AS 44.33.125 from 50/50 to 70/30.This change will be repealed on July 1 of 2008. Additionally, Senate Bill 144 will create a nine member task force operating from September through December of 2007 to investigate long term marketing funding solutions. This task force would be made up of one House member appointed by the Speaker [of the House of Representatives], one Senate member, appointed by the Senate President, two members of the Alaska Travel Industry Association, two members of the cruise industry, which would both be appointed by their respective organizations, one member, which would be the Governor's Special Assistant to Commerce, one member of the Department of Commerce, Community and Economic Development, to be appointed by the Governor, as well as one member to be appointed at the Governor's discretion. This task force shall submit its findings and recommendations to the Governor and the legislature by the 30th day of the second regular session of the 25th Alaska State Legislature. The purpose of this temporary statutory change would be to insure the maintenance of the Alaska Travel Industry Association's marketing budget, therefore maintaining and stabilizing visitor numbers while allowing the State and the industry to better evaluate how the cruise industry is going to participate, will or will not participate, in additional funding. Tourism, as I'm sure you all know, Mr. Chairman, has proven to be a tremendous economic engine for the State. It is one of Alaska's largest industries with an estimated $2.4 billion annual economic impact, as well as being one of Alaska's leading generators of employment. It is essential for the State's economic well-being to support this renewable resource industry and foster its growth. I think that Senate Bill 144 strikes a very good balance by helping the industry continue to market itself through its time of financial uncertainty, i.e. this year, without mandating increased State expenditure. Really, what we're concerned about is whether or not the Alaska Travel Industry is going to be able to take advantage of all the dollars that are currently, the $5 million that are currently in the core program budget. I mean, it would be certainly a shame to not be able to, to essentially leave those dollars on the table and not be able to utilize them to market Alaska. 10:16:28 AM Senator Olson understood the task force would "expire" on December 31 of 2007. Ms. Carlson-Von Dort affirmed. Senator Olson observed a zero fiscal note, and asked if the task force would be able to produce a meaningful report without funding and in such a short amount of time. Ms. Carlson-Von Dort affirmed, responding that the Department of Commerce, Community and Economic Development had reviewed the fiscal impact. 10:17:21 AM Senator Thomas identified two task force appointees from the Alaska Travel Industry Association (ATIA) and two from the cruise industry. He pointed out that the cruise lines were members of ATIA, and asked if there was a mechanism to ensure that the cruise industry would not be represented by four of the task force members. Ms. Carlson-Von Dort understood that the cruise industry representatives would not embody the interests of ATIA, thus representation would be equally allocated. 10:18:06 AM PATTI MACKEY, Executive Director, Ketchikan Visitors Bureau, and Chair of the Board of Directors, ATIA, testified via teleconference from an offnet location in Ketchikan in support of the bill. The proposed 70/30 match with a one year termination provision was the most reasonable proposal to address the current tourism marketing needs. She added that the composition of the task force should be as diverse as possible in order to best represent tourism in Alaska, and urged support of the bill. 10:20:46 AM CHIP THOMA, Juneau Resident, testified in opposition to the bill. He provided written testimony [copy on file] and read his testimony as follows. The state funding request by the Alaska Travel Industry Association (ATIA) is a dramatic change from past agreements in Alaska tourism promotion. Going from a 50/50 percent share to a 70/30 percent state-industry split is a fiscal departure that should be based both on demonstrated need and a logical advertising strategy for the future. Yet neither situation has occurred; it's all speculative. It's speculative that the cruise industry is going to drop its support, it's speculative whether ATIA is going to be able to raise the money. They should be able to. The ATIA has failed to make the case that in the past state appropriations were well spent, or that increased 70/30 funding is the simple answer. Instead, ATIA blames the cruise ship initiative as the 'probable' cause of its funding woes, while ignoring the obvious fact that private advertising for cruises in Alaska now tops $70 million a year. Market forces appear to be working naturally to make the ATIA irrelevant in the big picture of advertising for a $2.5 billion a year Alaska tourism industry. ASMI [Alaska Seafood Marketing Institute] and other private Alaska ads may total $20 million more, bringing the total 'other' spending on Alaska tourism to $90 million. That's a lot of money, and I don't think the ATIA is going to have one dent in that. All the advertising I see in the magazines I read, it's all Holland America, Princess, these are all fold-out ads. These people are doing a lot of advertising. All the glaciers, the water, the kayaks, the whales, that's all cruise ship type advertising, and the ATIA should not be involved in that and yet they are. Governor Jay Hammond determined the participation rate for state funding for new industry over three decades ago: no subsidies. ATIA should wake up, use its considerable marketing skills to raise monies for the 50 percent share agreement they now enjoy, before it all dissolves in the wake of a wealthy cruise ship industry. I know a lot of organizations that hire fund raisers and they have fund raisers on commission, and I think the ATIA would be very, very wise to bring somebody on board who really knows what they are doing, can raise some money for this group, give them 10 percent of what they're going to raise and let them try to match that 50/50. If they think they have to go above $10 million, then they should raise $5 million or $6 million and try to match with that. Finally, I hope you set an appropriate funding level and participation rate by the state and the tourism industry. Please reject SB 144 as an inappropriate level of state tourism funding, and return to the 50/50 share and participation rate. 10:24:09 AM Senator Huggins asked Mr. Thoma's affiliation with ATIA or other involved parties. Mr. Thoma declared that he represented only himself. He explained that his interest in this issue was due to the fact that ATIA received State funding to advertise tourism, while other industries did not enjoy similar support. He opined that the healthy tourism industry did not require State support. Senator Huggins repeated his query as to Mr. Thoma's involvement in this issue. 10:25:34 AM Mr. Thoma replied that he was Juneau resident and was "inundated" with ATIA advertisements on television. These advertisements urged viewers in Alaska to "go out and enjoy the outdoors," and he considered them an inappropriate use of State funds. 10:25:58 AM Senator Olson informed that ATIA and the tourism industry had positive effects in his community, and asked if Mr. Thoma supported the establishment of a task force to determine the proper use of tourism funding. 10:26:53 AM Mr. Thoma had no comment or opposition to the creation of a task force, but reiterated his opposition to the proposed 70/30 funding ratio. 10:27:07 AM Senator Olson asked how long Ms. Mackey had been involved with the tourism industry, and if she recalled any information regarding a tourism task force created 10 to 15 years prior. 10:28:05 AM Ms. Mackey replied that she had been employed in the tourism industry for approximately 12 years, and had an extensive marketing background. She shared that the previous task force presented the "millennium plan" to the legislature seven to eight years ago. That plan recommended a change in the trends in the industry to consolidate all entities involved in tourism marketing. The State had been operating under that model since it was proposed by the task force. 10:29:13 AM Co-Chair Stedman asked for a brief synopsis of Ms. Mackey's work history. Ms. Mackey shared that her background was in marketing, specifically communications, which included broadcasting and journalism. She was also the former chair of the marketing committee utilized by ATIA to create its statewide budget. Co-Chair Stedman asked if any recent studies were available to demonstrate the fiscal return for the State's investment in tourism advertising. Ms. Mackey responded that studies were conducted with the cooperation of the Department of Commerce, Community and Economic Development, and return on investment information had been provided. 10:30:58 AM Co-Chair Stedman requested the aforementioned "return on investment" information. 10:31:03 AM Senator Thomas asked the composition of the ATIA board. 10:31:22 AM Ms. Mackey answered that board members were elected by the ATIA membership, and those positions were based on regional representation. Seats on the board were also designated for members of the cruise industry to ensure its inclusion. The board was currently comprised of 23 members, and was representative of many facets of the tourism industry in Alaska. 10:32:13 AM Senator Thomas asked if seats on the board were designated for each region of the state. Ms. Mackey affirmed. Seats were designated by region, in addition to some "at large" seats. 10:32:53 AM Ms. Carlson-Von Dort informed of a table distributed to each member titled "The Net Return to the State of Alaska from: Timber, Tourism, Minerals, Commercial Fisheries" [copy on file] dated March 21, 2006. 10:33:33 AM Co-Chair Stedman ordered the bill HELD in Committee.
| Document Name | Date/Time | Subjects |
|---|