Tourism Subsidies
In a Free Press piece today, the Commissioner of Tourism & Marketing took issue with the findings in the report from the Council on the Future of Vermont. The report questioned whether the industry was growing. Mr. Hyde complained that the report picked “out one or two pieces of data and [drew] sweeping conclusions about…tourism.” He dealt specifically with figures on tax revenues.
What Mr. Hyde didn’t tell us is how much prices have grown. This matters because the taxes are a percentage of the cost. According to the Bureau of Labor Statistics, the cost of lodging has increased 78% since 1990.
Thus, if a hotel room cost $56 in 1990, the rooms tax would have been $3.36. But if the same room cost $100 in 2008, the tax (now 9% instead of 6%) would be $9.00. Adjusted for inflation, the 1990 figure would be $5.46 today.
So we rented one room - the same room - but tax revenue went up 65%. Good for the treasury but it doesn’t mean the industry has grown.
Mr. Hyde also didn’t tell us that there are fewer tourist jobs today then in December 2000, before the last recession.
In addition, the average wage for Leisure & Hospitality in 2007 was $17,506, less than half the statewide average. And adjusted for inflation, it has grown only 8% in 18 years.
Tourism is a big industry and generates a lot of tax revenue, but it’s not producing new jobs and on average the ones we have don’t pay well. Since 1990, taxpayers have provided tens of millions in subsidies for this industry.
Can Mr. Hyde tell us what we’re getting for the money?
March 22nd, 2009 at 12:58 pm
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