Toursim Funding: Restore the Indiana Department of Tourism Advertising Budget
In these hard economic times, the Governor and the Legislature is looking for any opportunity to cut existing expenses and maximize revenue generation as they craft the next biennial budget.
As a part of the cutting back process the Governor has proposed to eliminate this years spring advertising campaign, ($2 million) and eliminate the advertising campaigns in the next budget for 2009 and 2010.
The good news is that, as an industry, we can demonstrate that the dedicated funds that make up the budget of the Indiana Office of Tourism Development do, in fact, contribute appreciably to the state general fund and that taking those funds would actually reduce Indiana’s tax revenue generation by a significant amount.
More importantly reducing any of these funds Indiana - would actually have a negative impact on the general fund!
Here's how you can help:
- Send a letter to your legislators.
- Ask your employees to send letters to their legislators.
- Try to attend a legislative meeting in your district to discuss the value of tourism promotion.
- Meet with other community leaders to discuss the value of tourism spending on your community. Encourage them to write their legislators also.
- Take Action: www.capwiz.com/la You can also find your legislator contact information on this site.
Links
Tourism Facts
Tourism Promotions
Sample Letter to send to Legislators
Indianapolis CIB Funding Shortfall
Higher Hospitality Taxes should not be the solution The budget for CVB promotion of our new Convention Center is an important avenue to raise additional dollars to solve the CIB deficit.
There are no painless options when it comes to erasing the Capital Improvement Board's (CIB) budget deficit.
The CIB has planned to cut $7.6 million from their current budget but this will not be enough.
The deficit still stands at $20 million this year -- and it could shoot considerably higher in 2010 if the city takes over operating expenses for Conseco Fieldhouse from the Indiana Pacers.
The CIB committee and Mayor Ballard have publicly discussed a range of options, including additional increases in restaurant and hotel taxes, an expansion of the professional sports taxing district in Downtown Indianapolis and/or authorization of an Indianapolis casino but made no recommendations. The Mayor has stated that he wants those who benefit from the CIB facilities to pay for the facilities. He says he is not interested in a general tax increase.
One solution our hospitality industry would favor above all others would be promoting our way out of the shortfall. Don Welsh, the new CEO of the Indianapolis Convention and Visitors Association (ICVA), has stated that with an additional $5 million per year he could begin to eliminate the CIB deficit this year! This solution would benefit the city, the state and our industry.
In the plan submitted by the Indianapolis ICVA:
Each $1 spent on promotion and marketing will generate $1.82 in additional tax revenues to the CIB, $4.96 in state tax revenues and almost $200 in additional economic activity. The additional revenue derived from visitor spending would give the CIB and the state the money needed to close the gap in the operating budget.
State legislators will decide the final outcome of the CIB budget shortfall – perhaps in the state budget bill that must pass by the end of April.
We must make sure that Hospitality Taxes are taken out of the mix of possible solutions and that the marketing budget for CVB promotions is increased. This is an important issue for every restaurant and hotel in the State of Indiana. An increase in either the restaurant or hotel tax would give Indianapolis the highest combined tax rate in the nation. We can not afford to allow Indianapolis and Indiana to become known as the most expensive place to visit.
We have our work cut out for us! Please contact your legislator to discuss this important CIB funding issue.
Links:
City Tax Comparison
ICVA seeks extra $15 million to market enlarged Indianapolis convention space
Take Action
Talking points:
Allocating $5 million per year to the Indianapolis CVB would allow the city and its business partners an opportunity to help themselves during these difficult economic times. By promoting our way out of the deficit and bringing more visitors in - we help Indiana businesses and retain jobs in our state. Tourism dollars spent this year are returned to state and local tax coffers this year. Indianapolis could have a competitive advantage because it is close to home for many and is not known as an extravagant destination. Indianapolis really does mean business!
Raising taxes on the hospitality industry is bad for business, jobs and economic development in our communities especially in the current economy.
An increase in lodging taxes would hurt hotels and their employees by reducing sales and putting downward pressure on rates in order to stay competitive. Our operating margins are too thin right now to lower prices even further. By taxing Indiana’s hospitality industry to pay for the deficit we would turn visitors away with our high tax structure. The same goes for restaurants.
Indianapolis is already a very high tax city for visitors. When visitors think of Indiana they usually think of Indianapolis as the biggest destination. If either the food and beverage tax or innkeepers tax is raised 1% Indianapolis would have the highest visitor tax in the country!
The hospitality community is already putting $82 million into the CIB each year. We are doing more than our part. As much as we love the Pacers and the Colts we can not afford to carry this economic burden alone. We are not the only sector that benefits. The owners, players and the entire community benefit from having professional sports teams in our state. If there is any hope of solving this problem without a tax increase we should give it a shot. If a tax increase ends up being necessary it should be a general tax at the lowest possible rate shared by everyone in the community
________________________________________
Unemployment Insurance Trust Fund is Going Broke
• State unemployment tax collections have been running short of unemployment payments by about $200 million per year for a number of years.
• This year the state will run short by $400 million.
• The state has borrowed almost $500 million from the Federal Government to meet unemployment insurance obligations.
There is no doubt that every employer will be paying higher SUTA taxes after a solution is crafted to resolve the deficit. The question is how much higher and will the new allocation of the unemployment tax burden be fair?
HB 1721 (State Unemployment Insurance Trust Fund) was the bill to address the billion dollar shortfall in the unemployment insurance trust fund but it did not move when it was called down for final passage in the House because of mounting infighting regarding eligibility.
Most interest groups involved in the funding debate would agree that the increased cost should be split between higher employer payments into the system, employee payments into the system and an aggressive review of the entire system to reduce seasonal claims and abuse.
The Senate is crafting their version of a bill to fund the deficit. They will be inserting language into HB 1379 (Improper classification of employees).
Before the meltdown in the House regarding eligibility, there was bi-partisan agreement on the following changes to our current system approved in the House Labor Committee. These changes would almost double your current SUTA payments and pay for only half of what is needed to repay the debt and meet current unemployment claims.
• An increase in the taxable wage base from $7,000 to $9,000 for calendar years after 2009.
• New fund ratio schedules and employer rate schedules for calendar years after 2009.
• An employer surcharge for 2009 that is equal to 0.3% of an employer's taxable wages for the purpose of repaying amounts borrowed from the federal government.
• A higher rate for “abusers” of the system of 8.2%. The highest rate now is currently 5.6%.
If you are concerned about the cost of this bill to your bottom line – begin discussing it with your legislators now. When a new proposal does comes out there may be little time to discuss it with your legislators.
Talking Points:
Changes to the current State Unemployment Insurance Trust Fund should spread the cost fairly among employers, employees and the unemployed.
Tax rate revisions should preserve the experience-rated features of the system so that the burden of generating additional revenue is shared based on unemployment benefit pay-out histories.
All of the tax and benefit provisions must be reviewed when developing the solution.
Additional solvency tax measures should end once the trust fund returns to solvency.
More emphasis should be placed on ensuring that claimants search for work and on efforts to return claimants to work.
CURRENT 2008 SUTA RATES FOR INDIANA BUSINESSES
Department of Workforce Development Website: http://www.in.gov/dwd
________________________________________
The article below summarizes this problem and raises some very interesting points regarding how we got to this point.
From the NFIB Capitol Capers….September 2008
Barbara Quandt, Executive Director (summarized)
Fact: The Indiana Unemployment Insurance Trust Fund is going broke and will most likely run out of money during the first quarter of 2009. There have been whispers in and around the Statehouse for months about the trust fund and its dire straights. The state has now confirmed that legislation will be needed to correct the insolvency.
You may be thinking that this situation is a result of a slowing economy forcing businesses to eliminate jobs. More people unemployed equal a fund running dry.
There are a number of factors affecting the fund, but a softening economy is not the trigger causing the fund to go broke. According to Teresa Voors, the Indiana Department of Workforce Development Commissioner, the trust fund would run dry even if the unemployment rate was at 3 percent. (The unemployment rate is currently 6.3 percent.)
So, if it's not the economy, what is it?
Did you know that many big businesses lay off employees on a regular basis, as a matter of routine? (For example: two weeks in July and two weeks in December) These seasonal layoffs are built into these firms' business plans. Employers of the large firms utilizing this strategy take out much more from the fund than they ever pay in.
Did you know that employees who are members of a union don't have to follow the same job search rules that non-union employees have to follow in order to collect unemployment? A waiver allows union members to simply check in with their union hall to see if there are any available jobs. Union members do not need to seek employment elsewhere in the open market to continue to qualify for benefits.
Did you know that Indiana is one of the few states where employees do not pay into the system?
Did you know that non-teaching employees (bus drivers, cafeteria workers, etc.) of school corporations can collect unemployment benefits for nearly three months of the year?
Did you know that as this fund is evaluated, there are calls to raise benefits for recipients, raise the annual employer payment per employee, raise the average employer contribution, raise the taxable wage base, and ultimately, raise your taxes?
The facts: The fund about to run dry. Benefit costs are exceeding revenues by $200 million a year.
The 200 million dollar question: Who will pay for it? Will the ones who are draining the system pay their fair share? Will we trim waste, tighten eligibility provisions, freeze or reduce benefits?
Shouldn't the increased cost be born by those who use (and in some cases, abuse) the system?
Get Ready: Union Card-Check Legislation Introduced
The Employee Free Choice Act was introduced in both the House of Representatives and the Senate late last week.
Despite Senate Democrats' failure to secure 60 votes in favor of the bill, the battle over EFCA has begun.
As you know, union leaders want to change the rules of how unions are recognized by encouraging legislators to do away with the proven practice of holding free and fair secret ballot elections. This legislation could fundamentally alter the workplace. Under the bill, employers would be required to recognize a union if a majority of employees signs cards saying they want to join. Workers would lose their current right to a private ballot vote when determining whether or not to participate in a union. Many workers and the employer would be shut out of the decision-making process.
Please take the time to tell your Senators and Representative to vote against the EFCA. Our efforts have been successful so far, causing the bill's delay. In addition, this weekend Sen. McCaskill acknowleged that support in the Senate for EFCA is diminishing.
It's apparent that our opposition to this bill is gaining traction, and your input is more important than ever.
Click here for your EFCATool kit
Click the link below to send your message
Back to Top
