Governor Bruce Rauner’s taken a beating here on Smile Politely for various reasons — most recently the impending BUDGET DOOM the state is currently dealing with. Right or wrong in placing blame on Rauner, the Illinois government on the whole has its work cut out for them.
I am no expert on public policy.
With that out of the way, I do want to highlight one aspect of the budget cuts that isn’t getting as much publicity as pension reform and cuts to education. That aspect is tourism.
It’s kind of funny to think about C-U being a tourist destination in a broad sense. Yes, of course, Champaign-Urbana has a lot of cool stuff happening in town and, yes, people from out of town roll through and spend their money. But I don’t think of folks walking around our streets as tourists.
With that said, these visitors contribute over $300 million in direct spending to our area. That’s a pretty sizable chunk of change and, according to Visit Champaign County, that brings our area an additional $5ish million in local tax receipts and helps to create over 2,500 jobs. It’s not Cabo, but Champaign County is doing alright for itself in the tourism realm.
Unfortunately, though, proposals to slash the state budget are including cuts to the tourism industry which would risk about $2.5 billion in annual tax revenue. It’s obvious that slashing any numbers next to the word “revenue” is bad for balancing the godawful state budget, but that risk is here.
According to Jayne DeLuce, the President and CEO of Visit Champaign County, Visit Champaign County is funded primarily by grants from the state. Local government then matches the amount that is received by the state.
“Our whole set-up is based on state tourism funding,” DeLuce said.
Those grants are funded by 33.5% of Illinois hotel tax revenues — a fairly small portion considering most of the people staying in hotels can be classified as… tourists (or at least visitors).
The money then goes towards two things — sales and promotion. On the sales side, Visit Champaign County works with companies throughout the country to bring events to our community. For example, in June, Visit Champaign County attracted MVP Illinois, an elite high school lacrosse tournament, to the area a week after bringing in the Hot Rod Power Tour car show.
When you look at events like the Hot Rod Power Tour and MVP Illinois, you have to see more than just the crowds of people. There’s indirect revenue coming to the city and county.
“Every hotel room was sold out,” DeLuce Said. “The downtown bars loved it, a handful had pint nights.”
Without looking at actual figures, it’s obvious that those dates are generating revenue for the community. Hot Rod Power Tour happened on a Sunday night. It’s not as high of a volume evening for many bars, restaurants, and hotels than it would be on a Friday or Saturday night.
This is all well and good, with the caveat being that Illinois needs to continue to invest that portion of hotel tax revenue back into the state. Current proposals are seeing lawmakers looking to divert that money back into the state budget into other areas to try and close the gaps in the system. It’s a shortsighted solution akin to liquidating capital set aside for the start-up costs for a business, using that money for groceries, and then wondering why the business isn’t making a profit.
“What we’re trying to say is that we understand that there has to be cuts made,” DeLuce said. “But don’t cut us off because you need those revenues coming in to generate funds for the state.”
The bottom line of all of this is that it comes down to an old adage that everyone’s heard a million times before: You’ve got to spend money to make money.
Let’s keep spending a little on the march to get us out of the red, Illinois.