Chambers must make case for more marketing money

Local tourism organizations want more money for marketing, but the first sales pitch they'll have to make is to elected officials and the people of Beaufort County.

That pitch should not begin and end with the argument that tourism marketers elsewhere get a bigger share of accommodations taxes than organizations here. Nor can it be just about how much other destinations spend. This debate is about finite resources and competing priorities.

But neither should those opposed to giving more money to the Hilton Head Island-Bluffton Chamber of Commerce and the Beaufort Regional Chamber of Commerce dismiss out of hand their requests. Marketing brings visitors here, who in turn spend money, supporting our economy and tax base.

Two competing forces were at play when the state enacted its 2 percent tax on short-term lodging more than 25 years ago. Local governments said they needed money to pay for services required by visitors in their communities, particularly for police and fire protection. The state offered few ways for local governments to raise money. Property taxes, the primary source of money for local governments, did not tap visitors directly.

Tourism industry officials balked at increasing the price of their product, potentially hurting their ability to compete, and noted that they paid property taxes, business license fees and other taxes.

The compromise was a carefully constructed law that turned over 30 percent of collections for tourism marketing, put money in the coffers of local governments and helped pay for tourism and arts and cultural events, which benefited the entire community.

A decade later, the state legislature passed a law allowing local governments to collect local accommodations taxes, up to 3 percent, and laid out how that money could be spent. It also allowed a hospitality tax on prepared food and beverages, which residents and tourists alike pay. That, too, is capped -- at 2 percent.

It's true that revenue from each of these taxes can be spent on tourism marketing. But the money also can be spent on other things, such as beach renourishment, roads to bring tourists here and fire and police protection.

How much money are we talking about? In 2009, Hilton Head Island collected about $6.3 million from its local accommodations taxes and $4.8 million from the hospitality tax. For fiscal year 2009-10, the state returned $3.5 million from the state bed tax, which included the town's share for its general fund and the chamber's share for marketing. About $2.3 million was available for grants.

For 2009-10, Beaufort County received $456,651 from state bed-tax collections; the city of Beaufort, $279,584; Bluffton, $100,074; and Port Royal, $8,865.

Revenue for the island chamber's Visitor and Convention Bureau totaled about $3.7 million in fiscal year 2009-10, according to figures provided by the chamber. Eighty-three percent of that came from public funding, and 17 percent from private funding. About 35 percent of the money spent went for administrative and personnel costs. Chamber officials say the percentage of public funding was higher than usual because of a $300,000 grant from the town's crisis recovery fund.

But for 2010-11, its $3.5 million budget has been adjusted to $2.8 million because of cuts in state funding. That's a clear sign of the times and why we're seeing requests for more local tax dollars.

The Beaufort Regional Chamber reported $626,205 in revenue for fiscal year 2009-10, with $474,854, or 76 percent, coming from local government grants. The private sector kicked in $114,233, or 18 percent. The chamber has budgeted $946,595 in revenue for the 2010-11 fiscal year. That figure includes $110,000 from the state and $317,720 from the private sector.

Some say we need better accounting from the chambers about how the money is spent and how effective their marketing is before they get more public money. That's especially true before moving ahead with a proposed 1 percent sales tax to generate marketing money for them, a tax that would be paid by everyone, not just tourists. That's fair. Let's get to work determining how to do that and hold them accountable.

But in the end, it still will come down to finite resources and the community -- through its elected officials -- setting priorities.