Senate panel kills tourism bill

Partisan tactic blocks aid measure

Posted: Thursday, March 07, 2002

Money the tourism industry says it desperately needs to lure travel-wary visitors to Alaska this summer is linked to legislation unlikely ever to come up for a vote in the Senate.

House Bill 359, which was passed by the House on Feb. 4, would appropriate $6 million to the Department of Community and Economic Development and ultimately to the Alaska Travel Industry Association for marketing efforts aimed at countering the effects on travel caused by the Sept. 11 terrorist attacks.

But Senate Rules Committee chair Sen. Randy Phillips, R-Eagle River, said Wednesday that barring "a miracle," a Senate Finance Committee substitute for that bill would never see the Senate floor.

"No (it won't). There is not enough support for it," he said. "Personally, I'm opposed to it. I don't believe we should be subsidizing business. It's bad public policy."

It also sets a bad precedent, he said. Giving money to a tourism industry facing tough times would lead to other industries, such as the fishing industry, coming forward looking for similar appropriations, he predicted.

"Should we be subsidizing business? That's not the role of government," he said.

Phillips said he polled his constituents on the matter.

"Two out of three said 'no,'" he said. "It's the public's money."

Phillips said he wouldn't release the bill from committee unless he knew for sure there were 11 Republican caucus votes in support. Asked if he would consider sending the bill to the floor if there were 11 votes -- a simple majority -- regardless of party affiliation, he said no.

"That's the way I do things here," he said. "I'll take the heat for that."

"That's pretty disappointing," said Tina Lindgren, president of the Alaska Travel Industry Associa-tion. "There is strong support in the House, and we believe enough votes in the Senate to pass and we hope the Senate would take action."

It is simply unwise to ignore the problem, she said. The Alaska travel industry didn't cause the difficulties it now faces as a result of Sept. 11. Tourist businesses need the state's help, she said.

Meanwhile, millions are being poured into marketing efforts elsewhere promoting destinations typically in competition with Alaska, such as the Caribbean islands, Canada and Las Vegas, she said. Continuing delays are limiting the range of advertising options open to tourism businesses. Magazines, for instance, often require months of lead time for advertising space, she said.

"We already are starting from a position where we are 36th in tourism spending among states," she said.

Phillips said he tried to propose funding alternatives to travel industry representatives, including appropriating next year's tourism marketing money early. Other alternatives proposed by Phillips included a loan and a tax on cruise ship passengers.

"All three were soundly rejected by tourism people," Phillips said.

"The problem with going after next year's budget money -- the industry has asked for at least $4 million in fiscal year 2003 -- is that then not only do you have a problem this year, but you've created more of a problem next year for yourself," Lindgren said.

In any case, the travel industry has committed to coming up with 60 percent of its marketing funding in fiscal year 2003, she said.

As for cruises, Lindgren said, there is a lot of discounting going on in the cruise ship industry, which could fill ships with customers less likely to spend additional funds on land-based extensions to their voyages. That means tourist businesses in the Interior, the far north and even on the Kenai Peninsula may see no benefit from cruise ship passengers.

Sen. John Torgerson, R-Kasilof, said Wednesday he would not support an emergency appropriation measure unless it also included such funds for the fishing industry.

"We have two industries in dire straits," he said.

While fishing's problems aren't related to Sept. 11, he said he was not going to choose between neighbors.

Sen. Jerry Ward, R-Nikiski, said he'd welcome the industry's help in finding where to take the money out of existing state government and spending it on a higher priority like tourism. But the request is for new general fund money, he said.

"That's not the best policy," Ward said.

The Senate substitute does propose taking $5.17 million from the International Trade and Business Endowment, a pot of money now used to promote Alaska overseas. The remainder of the $6 million would come from the general fund.

According to the Alaska Travel Industry Association, the travel industry is Alaska's second largest private-sector employer, providing one in eight jobs. Nearly $1.5 billion dollars is spent in Alaska as a result of the tourism industry, injecting $125 million into state and local treasuries.

Absent the Legislature's help, or finding sufficient advertising money elsewhere, and quickly, the summer season may be bleak for some businesses, Lindgren said.

"There is a real possibility we will be in for a very bad year," she said.

Initially, the travel association sought $12 million in emergency supplemental funds. That was cut in half by the House-approved measure.

Passing the supplemental budget request is the association's top legislative priority. Meanwhile, the ATIA officially opposes any additional state or municipal taxes targeting the visitor industry.

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