(July 11, 2005) California Chamber of Commerce-supported investment in tourism was passed by the Legislature as part of the 2005-06 budget and is expected to be signed by Governor Arnold Schwarzenegger this week.

Earlier this year, Governor Schwarzenegger recommended that the state boost its investment in tourism promotion by $7.3 million and asked the Legislature to approve the increase so that the state can match the dollars the travel and tourism industry has been generating from a voluntary self-assessment. This additional funding to promote the travel and tourism industry is needed in order to stimulate the economy -- generating new spending, jobs and tax revenues for California.

”The tourism industry is important to California’s economy and brings billions of dollars to the state,” said Charles Bacchi, Chamber legislative advocate.  “By providing the money recommended by Governor Schwarzenegger and creating a robust public-private sector partnership, the Legislature has taken a huge step in putting California in competition with other states for tourism dollars that will create jobs for California. “

Historically, the tourism industry has assessed itself to raise private funds for marketing California. Before the recent budget shortfalls, the state matched these private funds in recognition of the increased tax revenue the state receives from visitors by promoting tourism through this public-private partnership.

Tourism and California’s Economy
The travel, tourism, and entertainment industries all play an important role in helping California’s economy get back on track. California tourist attractions are a major draw for our residents as well as residents from the rest of the nation and the world.

A recent study commissioned by the state shows that every dollar invested in promoting travel to California returns $19 in state and local taxes.
In 2004:

• total direct travel spending in California was $82.5 billion;
• travel spending in California directly supported 892,600 jobs and generated 261,500 jobs in food service, 220,500 jobs in arts, entertainment and recreation and 192,200 jobs in accommodations; and
• travel spending also generated $1.9 billion in local taxes and $3.3 billion in state taxes, of which approximately $500 million was tax revenue from motor fuel.

Restoring the state’s share of funding this public-private partnership for tourism marketing will benefit the California economy, the travel, tourism and entertainment industries, and ultimately will yield added revenues for the state.

SB 80, which contained the tourism funding was introduced as a trailer bill by the Senate Budget and Fiscal Review Committee, and was passed by the Senate (31-0) and the Assembly (64-13) on July 7.

The Chamber sent out a number of action alerts to our members to keep them informed of this important issue.  The Chamber would like to thank everyone who sent letters of support.