RALEIGH—The House Appropriations Committee endorsed a bill Thursday that would create a program to promote North Carolina and attract more visitors to the state. Under the proposal, a Travel and Tourism Grant Committee would award grants to the owners of qualified projects to create, renovate or further develop travel and tourism projects.
“The travel and tourism industry is one of the largest and fastest-growing in the state. North Carolina has a lot to offer, and we need to promote our areas,” said Rep. Beverly Earle, D-Charlotte, a sponsor of the bill. She noted that North Carolina ranks sixth nationally in attracting visitors and estimated that tourism provided $2 billion in tax receipts last year.
But concerns were raised about the cost, feasibility, and actual economic impact of the proposal, H1316. Over the next decade, the Travel and Tourism Investment Act is projected to cost about $600 million. Some lawmakers, revealed to be a clear minority after the final vote tally, would not support such a large-scale endeavor where grants are awarded by the state government.
Rep. Paul Stam, R-Apex, said, “It’s something that economically is not feasible, and the taxpayer will subsidize. No economist would advocate this sort of approach.”
He compared the millions of dollars proposed to be spent on the various tourism-related projects to Medicaid, which he said offers a much better return on spending.
Committee members asked staff to compile and distribute a list of projects already under consideration for the receipt of funding. They include a convention center and marine museum in Jacksonville, civic centers in Wilmington and Raleigh, a tobacco warehouse in Durham, “Mayberry USA” reconstruction in Macon County, “Ghost Town” in Haywood County, a water park in Washington, as well as an arena, riverwalk, and baseball park for Charlotte.
Only a select few other lawmakers criticized the nature of the legislation. Instead, a flurry of amendments were offered for consideration and an argument ensued as details of what Earle characterized as a “complicated bill” came up for debate.
Among the approved changes was an amendment, offered by Rep. Alma Adams, D-Greensboro, to ensure ethnicity factors into the dispersion of funds. The original bill called for the Travel and Tourism Grant Committee to consist of the secretaries of commerce and revenue, the director of the Office of State Budget and Management, the chairman of the North Carolina Travel and Tourism board, and three elected local government officials from each of the three geographic regions in the state. Adams’s amendment added the executive director of the North Carolina Institute for Minority Economic Development, three additional members, and a requirement that “the appointing officers shall make appointments to the Committee that reflect the state’s diversity.”
The program they are to administer, the Travel and Tourism Capital Investment Program, divides applicants into five tiers. If at least 25 percent will be financed and owned by a unit of local government, the project will be located in an “enterprise tier” of one, two, or three. If at least 50 percent of the project will be financed or owned by a unit of local government, it is designated to tier four or five.
A project located in tier one, two, or three must have at least 25 percent of its visitors from out of state or more than 50 miles from the project. A tier four or five project should have at least 35 percent of its visitors from out of state or more than 50 miles. The amount of funding available per tier was a key point of contention, and is likely to change before the legislation is ready for final passage. The maximum impact on a state budget is estimated to be $60 million, reached in 2006-07.
An adopted amendment offered by Rep. Martin Nesbitt, D-Asheville, allocated one-thirteenth of the funds to each congressional district. Should there be a lack of qualified projects in a fiscal year, the amount is to be spread among the remaining districts. In addition, Rep. Stephen LaRoque, R-Kinston, sponsored an amendment that caps the amount any one project can receive at $2 million.
One lawmaker from a rural community, Rep. Ronnie Sutton, D-Pembroke, said he was “nervous and suspicious” that more metropolitan areas such as Raleigh or Charlotte would be the main beneficiaries of the grants.
“This didn’t survive last year, and I hope it doesn’t survive this year,” he said.
Stam said he opposed the legislation on principle and wished more of his colleagues would do likewise. “It’s bad economics for the government to pick out certain private projects for special treatment. If they were feasible to begin with, they would make it on their own,” he said.