Homer Alaska - Business

Story last updated at 8:47 PM on Wednesday, March 23, 2011

Borough budget may cut tourism marketing money

By Brielle Schaeffer
Morris News Service - Alaska

The Kenai Peninsula Borough fiscal year 2012 budget process is in full swing and the Kenai Peninsula Tourism Marketing Council is concerned it could end up on the chopping block.

Last month, Kenai Peninsula Borough Mayor Dave Carey proposed cutting funding for non-departmentals within the borough, including CARTS, the Small Business Development Center, Kenai Peninsula Tourism Marketing Council and Kenai Peninsula College.

Since then Carey has decided to reinstate funding for the college in his proposed budget but all the other non-departmentals, for the time being, are still excluded.

"I certainly proposed to the assembly not funding the non-departmentals," Carey said. "I have not made any decisions."

But by Carey not making any decisions, the Kenai Peninsula Tourism Marketing Council has decided to lobby hard for the borough's money.

"It's just a process of working with each assembly member to help them understand the value of tourism to this borough," said Shanon Hamrick, the executive director of the council.

She said that according to some estimates, 30 percent of the sales tax in the borough comes directly from tourism dollars.

"If we didn't have that money from tourists taxes would go up," Hamrick said.

The organization's request to the borough for next year's funding was $300,000, which is about half of the funding its counterpart in the Matanuska-Susitna Borough receives from local government.

"Visitation to Alaska is projected to be up 6 percent from last year, but we are still in recovery mode. It is crucial to the economy of the peninsula that we capture the market that is coming to Alaska and bring them to the Kenai," Hamrick said. "If the Kenai Peninsula Tourism Marketing Council doesn't have the funding for aggressive marketing, you can bet that the Mat-Su CVB does, and we can sit by and watch our visitors go north rather than south."

She said that in the past the council has asked the borough to fund it from revenues procured by the sales tax on recreational package sales on a per-seat, per-day basis.

By the borough's own estimates in 2007, Hamrick said, that tax brought in some $480,000, more than what the council is requesting.

Kenai Peninsula Tourism and Marketing Council has conversion studies that show the organization returns $4.50 in sales tax dollars directly to the borough for every $1 the borough invests with the council.

"I can tell you that our lodges, our cabins, our bed and breakfasts, those business wouldn't exist if it weren't for the tourism industry," she said. "We're losing industry and tourism has been identified as the number one area for growth."

"Really, it's a business decision to invest in tourism," Hamrick added. "You have to spend money to make money."

Carey said he would be meeting with assembly members before their next meeting on April 5 to discuss their thoughts on the borough budget.

"I expect to ask assembly members individually what they're looking for in the budget I need to prepare," he said.

Brielle Schaeffer is a reporter for the Peninsula Clarion.