I received a handout from the CVB yesterday about the Maple Leaf project. It includes estimates and projections on revenues generated from tourism. I have asked for additional information. Note that the county is funded primarily by income and property tax.
2013 – Tourism Estimates Rockport Analytics (images not clear)
- Jobs supported by tourist spending: 642
- Wages generated by tourism: $11.3 million
- Tax revenue generated by tourists: $7.5 million
- Additional amount residents would have to pay per year in taxes if tourism didn’t exist $771.
IF people “perceive” that these numbers represent the revenue generated for the county, then the numbers are very misleading. They appear to be a combination of county information (jobs/wages) and State info (tax revenue and additional taxes that might be needed).
For example, if you divide wages ($11.3 million) by jobs (642), the average wage is $17,601. This does not generate $7.5 million in tax revenue for the “county.” The income for the owners of the tourism-related businesses is likely higher in order to compensate them for their investment and risk.
The projections and estimates likely include the ”possible” total tax revenues received by the State from ALL tourism-related taxes – direct and indirect. See below for more information on methodology, metrics, evaluation.
The So What? You need good information to support effective decision-making. In the case of Maple Leaf, there were many options that could have been considered to help determine the best return on investment for the revenue from the innkeeper’s tax. Citizens were not given the option to learn more about the other possibilities.
The decisions as to the type, scope, location, and cost were made by the innkeepers. This represented a conflict of interest. The innkeeper’s benefit from increased revenue from hotel stays and likely increases in assessed value for their properties. An independent assessment of the feasibility of Maple Leaf was not required by the commissioners or county council before they approved this project.
My articles and posts on the topic:
- Maple Leaf: What are the other options?
- A study of tourism and economic sustainability
- Blog Post: Living wage in Brown County?
One of the objectives in applying for an economic development strategic planning grant is to develop an economic baseline that we can use to accurately track the number and types of businesses, number of jobs and average wages. This information is important in estimating and projecting revenues and expenses which in turn, allows you to anticipate any need for cutting the cost of government and/or raising taxes. Without this information, decisions are reactionary and major decisions may be made behind closed doors.
- Dec 11, 2017 Another Record year for Indiana Tourism
- Example: 2015 A Record Year for Indiana Tourism – Methodology, Metrics and Evaluation