Southern Delaware Tourism's budget being cut to help fix deficit

By Lynn R. Parks

The tourism industry is up in arms about part of the state's proposed budget that calls for ending the practice of sharing the Public Accommodations Tax with major tourism bureaus in Delaware. The cut is one of many steps the Joint Finance Committee has proposed to solve a $400 million deficit.
Among those bureaus that would lose funding is Southern Delaware Tourism, which promotes tourism in Sussex County and also funnels money to area chambers of commerce.

'If this goes through, we would lose a huge chunk of our budget,' said Lynn Brocato, director of the Greater Seaford Chamber of Commerce. The chamber gets $36,000 a year from Southern Delaware Tourism, about 27 percent of its annual income.
The money that the visitors bureaus receive is a portion of the 8 percent Public Accommodations Tax, or lodging tax, that the state collects on hotel guest rates. Of that money, 62.5 percent goes into the General Fund, 12.5 percent is used to pay for beach replenishment and another 12.5 percent goes to the state tourism office. The remaining 12.5 percent, or 1 percent of hotel guest rates, is divided among the state's main visitors bureaus, including the Greater Wilmington Convention and Visitors Bureau, Kent County Tourism and Southern Delaware Tourism.
It is that final portion, about $2.7 million, that is in question.
In a letter to the chambers, Scott Thomas, director of Southern Delaware Tourism, said that the cut is short-sighted, a position that Brocato echoes. Every year, tourists visiting the First State spend more than $4 billion here. Nearly half of that, $1.7 billion, is spent in Sussex County, according to the Delaware Tourism Office and Southern Delaware Tourism.

Tourism supports 18,000 jobs in the county and accounts for 10 percent of the state's tax revenue, the two agencies add.
And the visitors bureaus that the state is considering cutting funding to help to boost tourism, Thomas said: For every $1 that the tourism bureaus spend, the state receives $2.75 in tax revenue, he wrote. That revenue means that each household in Delaware is spared about $1,400 in taxes, he added.
Brocato said that partly through the efforts of her office, the lodging tax that the state collects from Seaford-area hotels has increased by 20 percent a year over the past three years. 'Year after year, we have more people in our hotels,' she added. 'That means more taxes, as well as help for our small businesses.'
'If the state does this, they are really shooting themselves in the foot,' Brocato said. 'Our two biggest industries in Delaware are agriculture and tourism. If the state stops its tourism efforts, we are likely going to see a decrease in tax revenue down the road.'
At least one area legislator agrees. 'I think that reducing the amount that we give to help tourism is just wrong,' said state Sen. Bryant Richardson (R - Seaford). 'Our local groups really depend on that money to attract tourists to our area. And tourists from out of state help to fill the state's coffers. We need to promote tourism and agriculture as much as we can.'
In his letter, Thomas urges supporters to contact legislators and ask them to restore the funding in the 2018 budget. Brocato said that her chamber is also contacting legislators and is urging members to do the same.
'I agree that these are challenging times and that the state has to save money,' she said. 'But why would you cut something that is producing such a high rate of return and improving the state's economy?'

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