State budget woes affecting tourism marketing

The state’s legislators may be drawing political lines in the sand over how to deal with a projected $385 million shortfall for next year’s state budget, but it appears one thing both parties can agree on is Delaware’s sand will sell itself.

Established in 2000, the state’s 8 percent lodging tax on hotels is divided four ways. The state’s general fund gets 5 percent, While the state tourism office and beach preservation fund each get 1 percent.

The final 1 percent, much of which is spent on advertising, is split by the convention and visitors bureaus for each county – Southern Delaware Tourism, Kent County Tourism and the Greater Wilmington Convention and Visitors Bureau.

Unfortunately for those bureaus, as of the end of May, the bipartisan Joint Finance Committee, the General Assembly’s budget-writing group, has moved the 1 percent allocated to the county visitor bureaus, an estimated $2.7 million, to the general fund.

Scott Thomas, Southern Delaware Tourism executive director, said he was surprised to hear the committee decided to eliminate his agency’s funding. He said he’s aware of legislation, House Bill 130, that would broaden the definition of rentals that fall under the tax, but he said, eliminating funding for his agency came out of nowhere.

Thomas said the alarms have been sounded, and tourism bureaus have been fighting to be heard. For every dollar the state invests in tourism, he said, the state receives $2.75 in tax revenue.

“It just isn’t optimizing funds,” he said. “And, most importantly, this funding is gathered mostly through visitors vacationing in Delaware.”

Thomas said a significant portion of Southern Delaware Tourism’s share of the 1 percent – $590,000 – is invested in tourism programs and services administered by nine local chambers of commerce in Sussex County.

Carol Everhart, Rehoboth Beach-Dewey Beach Chamber of Commerce executive director, said ultimately a decision of this matter hurts the business community. The money the chamber receives, which accounts for a one-third of its budget, is earmarked for marketing, she said.

This chamber would have to pull funds from other areas and activities, said Everhart, using advertising in the Cape Gazette as an example. “We’re looking at everything,” she said.

Everhart said there’s a perception that because there’s beaches in the Cape Region, that people will continue to vacation here.

“Nothing could be farther from the truth,” she said. “Even Disney still markets themselves.”

Everhart’s counterpart, Lewes Chamber of Commerce Executive Director Betsy Reamer, agreed. She said marketing in regional advertising of neighboring states – Maryland, Pennsylvania, New Jersey and Virginia – is essential.

“We want to attract people to come to Lewes. If readers open the pages, and it’s all places from Maryland, Pennsylvania, New Jersey and Virginia advertising, we will be conspicuous in our absence,” she said.

While the July 1 deadline for when next year’s budget begins is fast approaching, the state’s budget isn’t yet written in stone, so there is a possibility the 1 percent may continue to fund the county visitor bureaus.

A disgruntled Speaker of the House Rep. Pete Schwartzkopf, D-Rehoboth, said this isn’t the only cut being proposed to close the deficit, but he said he’s in favor of trying to find additional revenue. There’s cuts to education, tourism and the needy, he said.

“It makes no sense to me,” he said. “I’d be thinking twice if I were a business thinking of coming to Delaware.”