Legislature(2017 - 2018)SENATE FINANCE 532
01/24/2017 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Intent Language Funding Plan | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
January 24, 2017
9:02 a.m.
9:02:38 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Mike Dunleavy
Senator Peter Micciche
Senator Donny Olson
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Senator Mia Costello; Sarah Leonard, President and CEO,
Alaska Travel Industry Association; John Lambeth, President
and Chief Executive Officer, CIVITAS.
SUMMARY
^PRESENTATION: INTENT LANGUAGE FUNDING PLAN
ALASKA TRAVEL INDUSTRY ASSOCIATION
9:03:12 AM
[Senator Costello was invited to join the committee at the
Senate Finance table.]
SARAH LEONARD, PRESIDENT AND CEO, ALASKA TRAVEL INDUSTRY
ASSOCIATION, introduced herself.
JOHN LAMBETH, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
CIVITAS introduced himself. He detailed that his
organization specialized in working with destinations on
tourism promotion funding.
COLLEEN STEPHENS, STAN STEPHENS GLACIER & WILDLIFE CRUISES
AND GOVERNMENT RELATIONS CO-CHAIR, ATIA introduced herself.
Ms. Leonard discussed the presentation "A sustainable
solution for Alaska destination marketing funding: A
tourism improvement district model" (copy on file). She
thanked the committee for the opportunity to share
information about tourism improvement districts (TIDs). She
thanked Senator Costello for participation on the Alaska
Tourism Marketing Board (ATMB), and for being a supporter
of the tourism industry.
Ms. Leonard recounted that the tourism industry had come to
Juneau many times previously seeking the state's investment
in tourism marketing. She recognized the fiscal environment
the state was faced with. She stated that she would review
ATIA's marketing program before her colleague would provide
details of the TID model.
9:05:25 AM
Ms. Leonard discussed slide 2:
The intent language found in House Bill 256, the FY17
operating budget, Sec. 1, pg. 6, lines 18-23 is as
follows:
"Tourism Marketing & Development - It is the intent of
the Legislature that the Tourism Marketing Board
develop a plan to phase out reliance on unrestricted
general funds for marketing, moving towards a self
sustaining program funded by industry to be
implemented in the FY18 budget…"
Mr. Leonard recounted that during the previous legislative
session and following the governor's vetoes, tourism
marketing funding from the state was reduced from $4.5
million to $1.5 million.
Ms. Leonard showed slide 3, "Alaska tourism marketing
budget in millions," which showed a bar graph. She wanted
to share the TID model, which she hoped could be a
partnership with the legislature and administration. She
pointed out the decline in tourism marketing dollars as
shown on the slide.
Co-Chair MacKinnon asked about the reduction of tourism
dollars spent, and if the graph represented the state's
investment in tourism dollars spent.
Ms. Leonard affirmed that the graph represented a decline
in the state's investment in tourism marketing dollars.
Co-Chair MacKinnon asked if Ms. Leonard had data to show
overall investment in tourism dollars. She wondered about
investing and advertising independent of the state.
Ms. Leonard stated that ATIA could go to industry partners
and determine where other industry businesses were
investing their own marketing dollars in the state. She
explained that some information was proprietary, but ATIA
worked closely with all sectors of the industry on
anecdotal information.
Ms. Leonard presented slide 4, "Economic Impacts." She
described that the 'circle of benefits' graphic shown on
the slide illustrated why her industry believed that
tourism marketing investment worked at the statewide level.
She thought that with smart past investments, industry was
attracting millions of visitors to the state that were
spending almost $2 billion with local businesses. She
highlighted business growth and added jobs as results of a
successful visitor industry. She emphasized that visitor
spending generated revenue through various taxes and fees,
which supported local and borough budgets. The slide showed
$83 million in visitor fees to city/borough budgets, and
$105 million in visitor fees to the state budget. The slide
highlighted over $4.17 billion in economic activity for the
state.
Ms. Leonard reviewed slide 5, "Visitor Spending by Sector,"
which showed a modified pie chart. She indicated that the
tourism sector was spending dollars consistently with
different activities such as transportation, food and
beverage, and food and souvenirs. She highlighted that
there were many businesses that benefitted from visitor
spending.
9:08:49 AM
Ms. Leonard discussed slide 6, "Budget Comparisons," which
showed a bar graph entitled 'State Tourism Budget
Compared.' She noted that the $1.5 million appropriation
for the current fiscal year and the $3 million in the
capital budget were significant declines from years past,
when marketing funding levels had reached in to the $10
million range and upward. She pointed out that the bar
graph showed Alaska's funding fell well below states such
as Arizona, Virginia, Arkansas as well as destinations in
Canada. She relayed that along with competing on a national
scale; Alaska also competed on an international scale as a
long-haul, exotic, and safe destination.
Ms. Leonard asserted that it took a couple of years for
marketing strategies to bring returns and realize economic
impacts. She feared that with less statewide marketing
dollars there would be an impact of fewer visitor numbers,
less spending, and less economic impact. She thought the
negative impacts would be discernable in 2018 and beyond.
Vice-Chair Bishop referred to slide 6, and asked if Ms.
Leonard could provide the total revenue generated in other
states in order to make a comparison of state investment
dollars versus total revenue.
Ms. Leonard did not have the requested information, but
offered to provide the data at a later date.
Co-Chair Hoffman asked if it was possible to see the chart
on slide 6 on a per capita basis by state.
Ms. Leonard agreed to provide the information.
Senator Costello understood that it was the first time the
state would not have a vacation planner to send out to
individuals planning trips to Alaska. She asked Ms. Leonard
if ATIA was experiencing a downturn in the number of
visitors to the state because of the lack of the planner.
She asked Ms. Leonard to comment on whether other states
were facing the same funding predicament and lack of
planner.
Ms. Leonard relayed that for the first time in 40 years,
ATIA was unable to produce a 'collateral piece' travel
planner. She continued that almost every other state had
printed such collateral pieces that were distributed to
potential visitors. Some states had multiple publications
advertising different regions or niche markets of the
state. She found that the main state vacation planner was a
great tool to provide potential visitors and get them to
choose Alaska over other destinations.
9:12:05 AM
Senator von Imhof referenced slide 6, and asked if Ms.
Leonard was aware of the budget sources of other states
listed on the slide. She acknowledged Ms. Leonard's earlier
comment that it was difficult to capture what private
industry was paying. She wondered if the amounts listed
were all state funded or co-mingled with private industry.
She wondered how Alaska spent its tourism marketing funds
as compared to other states. She wondered about the return
on invested funds in other states as compared to Alaska.
Ms. Leonard agreed to provide more information, and
deferred to Mr. Lambeth. She noted that different states
had different revenue that supported its marketing
programs, much of which was state funded. She pointed out
that in the past, Alaska had used marketing strategies that
other states had also used. She thought there was
significant value in having a printed piece as well as
television marketing.
Mr. Lambeth elaborated that there were several different
funding models represented on the slide. He furthered that
most of the funds shown were state efforts, and most was
General Fund (GF) money. Some of the money came from TIDs,
which he would discuss later in the presentation. Three
states used funds from a sales tax increment financing
mechanism, and some states had a co-op program. He
reiterated that the slide represented what the state
organization had to market its state in each area.
Senator Micciche expressed a desire to see all 50 states
represented on the graph on slide 6, as well as percentage
of overall Unrestricted General Fund (UGF) spend. He stated
he was a supporter of tourism marketing, but thought the
slide only represented part of the picture.
Ms. Leonard agreed to update the slide.
Co-Chair MacKinnon recalled some language change regarding
authority to spend receipts, and asked Ms. Leonard to
comment on how the changes were incorporated into the plan
being presented.
Ms. Leonard recounted that the legislature had supported
language for the industry to be able to re-invest funds
collected through program sales. The language had allowed
partners at the Department of Commerce, Community and
Economic Development (DCCED) to capture the sales. She
continued that ATIA currently had a grant with DCCED to be
able to receive the funding and continue to reinvest it
into the program.
9:16:20 AM
Co-Chair MacKinnon asked about the choice not to print the
planner, and asked if the publication was available
electronically. She wondered if other states were making
the same choice.
Ms. Leonard expressed that ATIA had tried to use its
available funds most efficiently. She noted that the
planner was available digitally on the consumer website. In
the past the planner was printed and produced, and had
resources available to market the publication and get it
into the hands of consumers.
Co-Chair MacKinnon wondered if there were taxes or special
revenue streams from the other states listed on slide 6
that were different from Alaska. She referred to the
vehicle rental tax (VRT) which helped provide funding to
advertise Alaska as a destination. She wondered if other
states were using such a tax or other broad-based taxes for
tourism marketing use.
Mr. Lambeth answered in the affirmative, and stated that
vehicle rental taxes were important to tourism marketing
programs, and was a key part of the tourism economy. Other
states had different kinds of levies, such as TIDs or
levies on lodging. He offered to provide more information
pertaining what revenue sources in other states.
Co-Chair MacKinnon noted that some of her questions were in
the context of enabling the public to understand the work
of ATIA and its associated organizations. She reminded the
testifiers that the state was in difficult financial times,
and that the committee was looking closely at the best use
of funds. She named public safety as an important priority
of the state. She expressed appreciation for the proposal
being presented.
Senator Micciche referenced the states of Washington and
Oregon, and the price of car rentals that included added
taxes for promotion funding. He thought Alaskans were not
accustomed to such high taxes which in some cases could
help promote industries that resulted in indirect dollars
to the GF. He considered that most of such taxes would be
paid by out of state residents. He thought it was important
for Alaskans to consider when paying for things that went
toward supporting the tourist industry in other states.
9:20:59 AM
Ms. Leonard showed slide 7, "International Marketing":
No longer have:
• Representation offices
• Trade training
• Public relations
• Trade shows
• Sales missions
• Airline development
• Foreign language planners
Ms. Leonard detailed that ATIA had to shut down all its
overseas offices. She specified that it represented not
being able to attract 10 percent of visitors which normally
came from international markets.
Ms. Leonard presented slide 8, which showed an
advertisement. She noted that ATIA's national advertising
program had been eliminated, along with television cable
ads.
Ms. Leonard showed slide 9, which displayed an image of the
Alaska vacation planner. She reiterated that the
association had no vacation planner for the first time in
40 years.
Senator Micciche asked about the cost of printing and
distribution of the publication.
Ms. Stephens estimated that the previous year's publication
cost $3.5 million including printing, distribution, and
advertising.
Senator Micciche asked if a thinner publication was
possible by covering more of the revenue through
advertisements.
Ms. Stephens stated that ATMB had considered all the
possibilities and decided that the limited funds available
would be focused on a digital presence and online outreach.
9:24:06 AM
Ms. Leonard discussed slide 10, and stated that ATIA was
using funds to maintain a basic program focused on digital
media strategies, public relations, and a core travel-trade
program.
Ms. Leonard showed slide 11, "What If?":
In 1993, Colorado repealed tourism funding
Within 2 years, lost 30% of its U.S. visitor
market share
During a recession, Michigan doubled state tourism
marketing funding
From 2006-2014, "Pure Michigan" generated $6.6
billion in visitor spending
Ms. Leonard wanted to discuss conversations the industry
had around statewide tourism marketing and the effect of
eliminated funding.
Ms. Leonard presented slide 12, "What If":
In 2010, Connecticut eliminated entire tourism
marketing budget
Travel-related tax revenue growth slowed to half
the pace during slow economic times of 2009-2010
In 2011, Washington shut down tourism office
Saw competing states increase tourism promotion
budget and capture increased visitor spending
Co-Chair MacKinnon asked about the reference to the slowed
growth of tax revenue in Connecticut.
Ms. Leonard explained that Connecticut visitor numbers were
the same or may have increased, however the rate of growth
had slowed.
Co-Chair Hoffman asked about the reaction of the Washington
State Legislature after it had observed the market decline.
He wondered if the program had been reinstituted.
Mr. Lambeth stated that the Washington State Legislature
had not taken action, but there was proposed legislation
that utilized part of the existing sales tax revenue for
tourism promotion. The legislation required an industry
funding match.
Co-Chair Hoffman asked what budget was associated with the
tourism office in Washington.
Ms. Leonard agreed to provide the details on the amount of
funds that were eliminated at a later date. She thought the
state of Washington currently had a $1 million budget.
Co-Chair MacKinnon discussed the market downturn in 2007
and 2008, and considered that the slides reflected some of
the reaction to the market. She observed that Alaska had
continued to invest during that time frame, and was now
facing its own recession.
Ms. Leonard thought that the economic benefits that were
seen were due to healthy investments in marketing that the
legislature and the administration had made in the previous
2 to 4 years. She conveyed that marketing strategies did
not show adverse effects from reductions till years later.
She commented on the unique nature of the state, reiterated
that the state was seeing benefits of the investment that
had been made in the state's marketing efforts.
9:28:51 AM
Senator Dunleavy asked if it could be assumed that the
industry did not replace the funds reduced in the states
cited in the examples on the slides.
Ms. Leonard answered in the negative, and thought that
tourism marketing entities were working with legislative
leaders on how to fund sustainable tourism marketing. She
wanted to discuss the model of TIDs, which relied on
industry to partner with government funding to support
statewide destination marketing programs.
Ms. Leonard reviewed slide 13, "What If,":
Pennsylvania's tourism funding declined 77% from 2008-
2015
Projected loss of $600 million in state and local
tax revenue that travelers would have generated
In 2013, San Diego held off on tourism promotion
funding
$560 million in lost visitor spending and $24
million in reduced tax revenues
Ms. Leonard indicated that the City of San Diego had
eventually allocated the funds mentioned in the slide.
Ms. Leonard showed slide 14:
· Broad based, reaches different industry sectors
· Visitor activity vs impacts to Alaskans
· A mix of current and new revenue
Ms. Leonard shared that the ATIA Board of Directors held
several meetings since the previous March to research and
discuss different revenue options while working on the
legislative mandate. The bullets on the slide were guiding
principles for the conversations. She noted that the
conversations had gravitated toward TIDs, which occurred in
many jurisdictions in the United States, at local regional
levels and at the statewide level in California.
Mr. Lambeth showed slide 16:
Supporting 1 in 9 U.S. jobs and contributing $2.1T to
our economy
The travel and tourism industry fuels economic growth
in the U.S.
Mr. Lambeth cited $158 billion in total tax revenue from
tourism, with over $100 million generated in Alaska.
9:32:09 AM
Mr. Lambeth reviewed slide 17, "The Future is Built with
Travel Promotion.":
Travel Promotion's Virtuous Cycle
1. Invest in Travel Marketing and Promotion
2. Create Demand
3. Generate Visitor Spending
4. Spur New Jobs and Tax Revenues
Mr. Lambeth turned to slide 18, "The Vital Role of
Destination Promotion."
CHALLENGE:
1. The primary motivator of a trip is usually the
experience of a destination, beyond a single business
SOLUTION:
DESTINATION PROMOTION
Articulates the brand message that is consistent with
consumer motivations
CHALLENGE:
2. Effective marketing requires scale to reach
potential visitors
SOLUTION:
DESTINATION PROMOTION
Pools sustained resources to provide the economies of
scale and marketing infrastructure required to
generate impact
Mr. Lambeth discussed destination promotion and informed
that individual businesses spent significant resources on
marketing because it was important for returns.
Mr. Lambeth discussed slide 19, "What is a TID?":
1. TIDs are an evolution of the traditional
Special Assessment District concept
2. Special Assessment Districts (BIDs) assess
property owners in a specific geographic area to
provide additional desired services and
improvements
3. TIDs assess tourism-related businesses to provide
additional promotion and marketing activities
Mr. Lambeth showed slide 20, "How it Works":
Hotels & other tourism businesses pay an assessment...
Collected by the state government...
And managed by the DMO.
9:34:00 AM
Mr. Lambeth displayed slide 21, "History of TIDs":
1. The TID concept began in 1989 in West Hollywood,
California
2. In the last decade TIDs have experienced rapid
expansion with over 160 TIDs in 11 states
3. TIDs are raising over $300 million per year to
pay for destination promotion activities
Mr. Lambeth reviewed slide 22, "National District
Statistics." He informed that the smallest TID raised
$30,000 per year, and the largest raised $120 million.
Mr. Lambeth discussed slide 23, "Case Study: Visit
California."
4x - The statewide TID has been approved to continue
by assessed businesses four times since 1997
Over the last three years, California moved from 28th
to 2nd among state tourism marketing budgets
California has achieved overwhelming success without
the need to raise taxes or appropriate any money from
the state's general fund
Mr. Lambeth showed slide 24, "Approach to New Proposed
Legislation":
1. Modeled after the Alaska Seafood Marketing
Institute statute
2. Utilized the best concepts in laws from other
states
3. Customized to the unique Alaska travel and
tourism industry
Mr. Lambeth praised the Alaska tourism industry, noting
that it had worked hard over the previous year to develop a
plan. He stated that the tourism industry wanted to do a
TID, and was looking to the state for a partnership. He
discussed budget requests and legislative decisions. He
discussed the possibility of dedicating the VRT revenue to
tourism promotion.
Ms. Stephens discussed slide 25, "How Much Could Industry
Generate?" Based on a 1 % Assessment as Example." She noted
that she was a small business owner in Valdez that employed
5 full-time employees and 30 seasonal employees. She
alleged that small businesses would feel the impact of a
diminished marketing budget. She highlighted the table on
the slide; which looked at a 1 percent assessment on
accommodations, tours, and attractions. The estimate would
bring in approximately $7.5 million of new revenue for
tourism marketing funding. In combination with the VRT, the
new revenues would create a $17.2 million budget. She
detailed that a budget of $17.2 million had created success
in the past.
9:38:44 AM
Senator Micciche discussed a $50 head tax on the cruise
industry, and thought that the tourism industry had opposed
the tax. He wondered if the funding could have been a
resource such as was being presented on the slide.
Ms. Stephens relayed that there were federal regulations
that dictated how taxes on interstate commerce could be
spent, which did not allow for spending on marketing. She
asserted that all aspects of travelers could be reached to
help support the marketing program with the TID approach,
including independent travelers and cruise travelers.
Senator Costello referred to the $17.2 million listed on
slide 25, which would allow ATIA to go back to a
comprehensive marketing strategy that had been used in the
past. She understood that the past marketing strategy had
included the vacation planner in which individual
businesses could purchase advertising. She did not see
associated revenues and reinvestment as a component of the
funding on slide 25. She added that she thought it was
important to understand the demographics of travelers
coming to the state.
Ms. Stephens referred to research that indicated that the
planner was used by a wide demographic, and was used for
more than one year. She had found through research that
travelers did want a physical copy of a planner, regardless
of demographic. She confirmed that the main demographic for
Alaska summer visitors remained in the 60's age range. She
noted that the demographic was becoming younger, more
international, and more multi-generational. Considering new
numbers allowed for adaptation of the marketing program.
9:42:59 AM
Senator Costello asked if businesses would still be able to
purchase advertisements in the printed travel planner, and
if the revenues were included in the new program.
Ms. Stephens answered in the affirmative, and noted that
the current plan included revenues coming from cooperative
programs. She shared that the industry contributions were
close to $3 million when the budget had previously been at
the same level as what was proposed on the slide.
Senator von Imhof expressed appreciation for the effort
undertaken in developing the presentation. She was
supportive of extending economic opportunities in the
state. She thought tourism was growing and had a lot of
potential. She thought it would have been helpful to review
a visitor analysis to observe changes over time.
Additionally, she expressed interest in seeing information
on existing bed taxes at a statewide and municipality
level, how the funds were being used, and how it might
compare to other states. She referred to a proposed
additional bed tax in Anchorage to fund police.
Ms. Leonard stressed that the TID proposal referred to an
assessment versus a bed tax. She agreed to provide the
requested information, which the state already collected.
She noted that taxes supported general services, while the
TID proposal asked industry to assess themselves to be
allocated for tourism promotion. She continued that ATIA
was communicating with parties in Anchorage to ascertain
how the proposed bed tax might impact a statewide TID
model.
9:46:41 AM
Co-Chair Hoffman asked which components of the proposed
plan would require legislation.
Ms. Leonard expressed that ATIA was looking for guidance
and support for potential legislation to create a statewide
TID, where the assessments would be included in the
language.
Co-Chair Hoffman asked if the association had any proposed
legislation to offer.
Ms. Leonard related that ATIA was in the process of
drafting legislation, and would appreciate the guidance and
support of the legislature to move forward with the
concept.
Co-Chair Hoffman suggested that the committee could not
give outright approval, and emphasized the need for the
public legislative process.
Mr. Lambeth stated that the process had been started to
identify all the elements to include in proposed
legislation. He indicated that the stakeholders had been
hoping for early feedback, and would soon have legislation
ready to be considered.
Senator Dunleavy asked for clarification of the state's
role in the collection of the contributions from industry.
Mr. Lambeth stated that normally the entity would collect
contributions. The state would approve the mechanism, the
industry would design the program and vote on it, and
typically the industry would be responsible for making sure
that collections happened.
Senator Dunleavy asked if the state would merely collect
what was given, and use the funds for helping with the
marketing program funding.
Mr. Lambeth relayed that the process varied from state to
state; in some states the industry was on the front lines
of collection, and in other places the state had a
department doing collection. Normally, states that did the
collection of assessments would look for reimbursement of
associated costs.
Senator Dunleavy asked what model that Mr. Lambeth
envisioned for the collection of contributions.
Ms. Leonard had received industry feedback that favored a
partnership; with revenue collected by the state and the
program managed by the industry.
9:50:59 AM
Senator Olson was supportive of the idea being presented.
He recalled that eight years previously, when the state was
in deficit spending, there was a significant hotel tax put
in place. He discussed the effects on residents after the
tax was intended to target visitor spending. He wondered
how the TID model would affect residents throughout the
state who would rent cars, rent hotel rooms, or do other
activities related to tourism.
Mr. Lambeth discussed other states which had imposed taxes
that effected all people, whether they were residents or
travelers. He thought public education was important. He
emphasized that the program was designed to increase out-
of-state visitors and drive economic activity.
Co-Chair Hoffman inquired about the first footnote on slide
25:
"Estimates are based on spending by non-Alaska
residents ONLY, not spending by Alaskans traveling in-
state"
Ms. Leonard indicated that the intent had been to project
numbers to build an example of a 1 percent assessment. She
looked forward to working with the legislature on fleshing
out the details of the proposal. She did not know of a
solution for having less or no impact on residents who
travelled the state.
Senator Dunleavy stated that associated funds would be
designated and would still be going to the GF.
Co-Chair MacKinnon understood the same.
9:54:39 AM
Senator Micciche referred to the importance of the visitor
industry on the Kenai Peninsula. He thought that ATIA had
done a good job on winter destination promotion. He thought
that an interesting comment had been made on interstate
commerce. He suggested that it would be possible to do a
discount of 5 or 10 percent for Alaska residents as part of
the campaign, which would not compromise the interstate
commerce issue. He recounted working on the budget for the
Department of Transportation and Public Facilities, and
thought the visitor numbers were heavily influenced by the
cost of refined fuels. He observed the phenomenon on the
Alaska Marine Highway receipts, as well as visitor numbers.
He thought there was a direct correlation.
Ms. Leonard discussed fuel prices and increased road
traffic to the state. She thought it was possible to see
economic results at the statewide level, and thought
external factors were always at play in the marketplace.
She thought it was possible to prove the economic benefits
of a healthy tourism industry because of tourism promotion.
9:58:07 AM
Mr. Lambeth indicated that many programs tried to protect
and grow market share. There were many things that affected
travel and tourism; including the overall economy and fuel
prices. He referred to locations that had lost destination
marketing, which had studies conducted after the fact to
show lost market share. He thought the industry wanted to
make sure the tourism industry was thriving into the
future, and an important part was significant funding going
toward destination marketing efforts.
Senator Micciche clarified that he was not advocating for
or against a tax. He thought that if the self-assessment
went forward, travelers were not dissuaded from visiting
because of an additional percentage point or two on the
dollar to help provide the funding. He suggested the
consideration of a residential discount if the plan went
forward.
Senator Dunleavy considered it was a good exercise to
review the impacts on Alaskans. He noted that the body
would be concurrently discussing massive direct impacts to
Alaskans through potential revenue enhancements of a much
greater magnitude.
10:00:52 AM
Co-Chair MacKinnon commented that the reason ATIA was
before the committee was that the previous session, there
was intent language directing the industry to come back
with self-funding ideas and reduce dependency on
Undesignated General Funds. The idea being presented would
tax the industry itself, and also impact Alaskans. She
thought it was up to industry to discuss the economic
benefit of a healthy tourism industry. She remarked that an
expectation of $9.5 million of GF funds was probably
unrealistic.
Co-Chair MacKinnon continued, and mentioned the proposed
industry/state partnership including the VRT. She referred
to a debate on adding the word "may" to designate a revenue
stream to tourism. She referred to comments by Senator
Costello and Senator von Imhoff pertaining to tourism
demographics. She thought the committee would be interested
to see who would serve on the board to allocate the funds.
She thought language pertaining to matching funds would be
more effective than the entire amount of the VRT.
Co-Chair MacKinnon relayed that the committee would be
heavily scrutinizing any spending on forthcoming fiscal
notes. She mentioned ongoing discussions in the legislature
that considered taxation of Alaskans.
10:06:03 AM
Senator Costello thanked the committee for allowing her to
be present at the table for her position as chair of the
Senate Labor and Commerce Committee. She referred to
legislative hearings with economists, who agreed that
certainty was needed. She acknowledged that the state was
having trying fiscal times, and thought it was important to
look at diversification, including travel. She appreciated
comments related to how the proposal would affect Alaskans.
She noted that it was the first time that the industry had
come to the legislature with a proposal of self-assessment.
She thought there would be an issue with the use of the
VRT, but applauded the proposal.
Co-Chair MacKinnon thanked Senator Costello for attending
and prioritizing the conversation.
Senator Dunleavy praised Co-Chair MacKinnon's directness.
He echoed Senator Costello's comments and expressed
appreciation for the industry developing a plan and
considering the fiscal climate in the state. He thanked
ATIA for having a solutions-based approach, and thought Co-
Chair MacKinnon had given good advice.
Senator Micciche referred to the fuel cost issue, and
agreed that tourism diversified Alaska's economy
significantly. He thought there was a direct relationship
to diversification. He recounted that most industries had
not been supportive of self-assessments. He referred to the
commercial fisheries industry, which was looking at similar
self-assessments to help contribute towards what they used
in state resources. He expressed appreciation for industry-
led suggestions. He thought the state would experience the
same budget struggles for a few more years.
Ms. Leonard reiterated her thanks to the committee, and
looked forward to working with members on legislation. The
industry viewed the proposal as a hopeful partnership with
the legislature and the administration.
Co-Chair MacKinnon discussed the agenda for the following
day.
ADJOURNMENT
10:12:28 AM
The meeting was adjourned at 10:12 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 012417 ATIA SFC Presentation.pdf |
SFIN 1/24/2017 9:00:00 AM |
Operating Budget FY18 |