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3:56 p.m., May. 28, 2009	Comment Email Print
Proposal would create new funds for tourism promotion By Amy Lane
Advertisement A new source of financing for Michigan tourism promotion and business attraction is dropping into the Legislature. The proposal, first reported in March by Crain’s, creates a new fund that would have two revenue sources: • New tourism-generated sales tax revenue, from the sale of tourism-related goods, services and sources such as hotels, restaurants, campgrounds and amusement and recreational venues. • A $2.50 daily assessment on vehicles rented at or near airports, hotels, convention centers, passenger train stations, bus terminals or harbors. The revenue would be placed in the new Michigan Promotion Fund, with 75 percent of the money going to tourism marketing and up to 25 percent available to promote business development. Revenue analyses were not available Thursday, but previous estimates have called for the fund to capture a sales- and use-tax stream projected to initially generate about $8 million, and a car rental fee that could raise at least $13 million a year. When the combination of taxes and the rental car assessments tally $40 million, the rental car fee would start to decrease. Under House Bill 5017, introduced Thursday by Woodrow Stanley, D-Flint, the rental car assessment would drop by 50 cents in each year succeeding a year that the promotion fund balance tops $40 million. If the fund balance tops $40 million for two consecutive years, the vehicle assessment ends. The rental fee would not apply to vehicles provided free to people whose cars are being repaired or serviced, or to insurance-related rentals. House Bill 5018, sponsored by David Nathan, D-Detroit, creates the new promotion fund. Senate Bills 619 and 620, sponsored by Jason Allen, R-Traverse City, are expected to be formally introduced Tuesday and provide for the capture of the tourism-generated increase in unallocated Michigan sales and use taxes. The goal of the package is to provide a permanent and adequate source of funding after years of fluctuating state support that depended on what the state budget could bear and what ancillary revenue sources were found. Steve Yencich, president and CEO of the Michigan Lodging and Tourism Association, said the package is “an important step in the right direction.” “And if the state is looking for long-term stimulus of the Michigan economy, we believe this package of bills addresses that very important need,” he said.

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