The plan is to add three percent to the present two percent room tax in Bay and Midland counties.
State Proposes Tight Financial Strictures on Beefed Up Local Tourist Bureau
Senate Bill Moves to House Tourism Committee with Bipartisan Support
November 27, 2010
By: Dave Rogers
Great Lakes Bay Regional tourism promoters are banking on a beefed up room tax to provide the financial muscle to increase advertising and pump up visitor traffic.
The plan is to add three percent to the present two percent room tax in Bay and Midland counties, and join those funds with the present five percent tax in Saginaw County.
A bill to accomplish those increases and the new structure is reportedly on the fast track in the Michigan Senate, being shepherded by Saugatuck Republican Sen. Patty Birkholz.
A similar bill was introduced in the House by Rep. Jeff Mayes, D-Bay City.
A substitute Senate Bill 1515 passed the senate 31-7 with bipartisan support and was referred to the House Tourism, Outdoor Recreation, and Natural Resources Committee on November 10, 2010.
One version of the previously proposed legislation would have placed the local bureaus under the Michigan Strategic Fund, but language for that proposal was not included in the Senate adopted final bill.
However, under the substitute bill, copies of reports and audited financial statements must be sent to the director of the Michigan Economic Development Corporation (MEDC), who must make them available to the public on the Internet.
The additional money, estimated at $2,000,000 to $3,000,000 annually -- depending on the number of rooms rented by tourists -- would flow into the Great Lakes Bay Regional Tourism Bureau, presently headed by Dr. John Lore of Bay City.
The new agency has offices at MBS Airport and is beginning to assert an image through news releases and advertising mainly in a regional lifestyle magazine.
Dr. Annette Rummel, of Frankenmuth, heads the tourism promotion arm of the bureau and has already helped steer the Bay County agency from the Pere Marquette Depot welcome center to a new location in the Delta College Planetarium and the Midland County Bureau from shared quarters in the chamber of commerce building to a downtown storefront site at 128 E. Main St.
One quarter of the funds collected under the new system would go to the local county agencies with the remaining funds going to support the program of the regional administration.
However, with the new tax money comes a host of restrictions and safeguards against bureaucratic malfeasance or nonfeasance. Transparency and disclosure of finances to the public are prime motivators in the new structure.
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The bill would amend the Community Convention or Tourism Marketing Act to do all of the following:
-- Increase from 2 percent to 5 percent the maximum allowable assessment collected from owners of transient motels) within a convention and tourism bureau's assessment district (one or more counties with a population of less than 650,000, or a city, village, or township within a county of that size).
-- Require a certified report of each bureau's marketing programs to include the amount of wages and benefits for each of the bureau's full-time employees.
-- Require the director (the president of the Michigan Strategic Fund) to make statements and certified reports available to the public on the Internet.
-- Require the director to mail a demand letter to a bureau that failed to submit copies of its financial statements and certified report.
-- Specify that if a bureau failed to provide copies of its financial statements and certified report, the attorney general may intervene to enforce the act. Continued noncompliance would subject the local bureau to a state civil infraction carrying a $10,000 fine and dissolution of the bureau.
-- Prohibit a bureau from spending assessments collected during a period of noncompliance with requirements to submit financial statements and certified reports to the State.
According to Fiscal Analyst Eric Scorsone, funds collected would not be state funds and the bill would have no fiscal impact on State finances.
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