Published in Economic Development
An analysis by Indianapolis, Ind.-based Strategic Marketing & Research Insights shows the Pure Michigan campaign generated $9.28 in tax revenue from visitor spending for every $1 in state money spent on the advertising. An analysis by Indianapolis, Ind.-based Strategic Marketing & Research Insights shows the Pure Michigan campaign generated $9.28 in tax revenue from visitor spending for every $1 in state money spent on the advertising. COURTESY PHOTOS

Legislator: Pure Michigan funds likely coming back soon

BY Wednesday, February 19, 2020 12:46pm

GRAND RAPIDS — A state lawmaker expects action in Lansing within the next few weeks to restore funding for the Pure Michigan tourism campaign.

Lawmakers could appropriate $20 million to $30 million to Pure Michigan for the rest of the state’s 2020 fiscal year that runs through Sept. 30. That would restore most of the $37.5 million that was among 147 items totaling nearly $1 billion that Democratic Gov. Gretchen Whitmer line-item vetoed in October in a budget showdown with Republican lawmakers who control the state Legislature.

“We will find within the next two to three weeks $20 million to $30 million to finish off the year and then we’ll fight for more money” in the next fiscal year, Sen. Ken Horn, R-Frankenmuth, said during a legislative panel discussion this morning at the Pure Michigan Governor’s Conference on Tourism in Grand Rapids.

In a brief interview with MiBiz following the legislative panel, Horn said funds for the popular travel campaign are “sitting there, just not at the same level” that was vetoed last fall. Legislators and the governor all support Pure Michigan, he said.

“We’re all on the same page on Pure Michigan. It won’t be (restored) at the same numbers. It’ll be more modest than the way it was vetoed, but it is an important program and I think the governor recognizes that,” said Horn, who serves on the Senate appropriations subcommittee that oversees the budget for the Michigan Economic Development Corp. “Because the industry is speaking out in such a loud voice, it gives us the confidence and affirmation that this is an important program, so we’re fighting for it.”

Gov. Whitmer originally proposed $31 million in funding for Pure Michigan in the 2020 fiscal year, a $5 million decrease from the prior year. The budget lawmakers adopted and sent to the governor allocated $37.5 million.

Rep. Mark Huizenga, R-Walker, said the Pure Michigan funding got caught up in “petty partisan politics (that) got in the way of things, and Pure Michigan along with a lot of other things were cut.”

Ads for the campaign have been on hold ever since.

Rep. Terry Sabo, D-Muskegon, said during today’s panel discussion that there’s “definitely a lot of potential for (funding restoration) to happen.”

“There is still money sitting there that originally was designated. What it’s going to come down to is people working together, trying to find some common ground and get things resolved,” Sabo said. “There is plenty of opportunity to get money back into the program.”

After the governor’s original budget proposal a year ago, MEDC staff indicated that it could live with the $31 million allocation and “try to find a way to make it work,” Sabo said.

“Unfortunately, things got bad from there,” he said.

Even if lawmakers act soon to restore Pure Michigan funding for the rest of the fiscal year, Travel Michigan has to alter the campaign for the upcoming busy summer travel season, Vice President Dave Lorenz said.

Travel Michigan, an arm of the MEDC, has already missed out on receiving the best rates and prime ad placements, Lorenz said. Travel Michigan has “been making changes to our plan, adjusting to the new realities as they go,” he said.

“We will be prepared if we get funding tomorrow or in a month, to maximize that,” Lorenz said. “We’re going to change the way we’re going to market. We’ll still use a mix of media and we’re going to do a very innovative buying process and placement process.”

He declined to offer specifics of what’s in store, although Travel Michigan would use more digital and social media and perhaps “media stunts to get attention.”

“If you’re dealt a bad hand, at least make the best of it,” Lorenz told MiBiz. “We’re going to do all we can to continue to make sure that people know that Pure Michigan is this wonderful place to live, work and play.”

The lack of Pure Michigan ads since October has led to a 20-percent decline in traffic to Travel Michigan’s website from prospective travelers seeking information on travel destinations, Lorenz said.

Some destinations and businesses that annually partner with Travel Michigan on co-op campaigns using the Pure Michigan brand also have dropped out for 2020 because they had to get their marketing plans and ad buys in place by now, he said.

An annual analysis pegged the economic impact of tourism in Michigan at $4.18 billion from direct and indirect visitor spending in 2018, the most recent year for which data are available.

Traveler spending directly supported nearly 25,000 jobs that year that paid nearly $650 million in wages, plus another 36,500 jobs indirectly with $1.2 billion in associated incomes, according to a June 2019 analysis by Pennsylvania-based Tourism Economics.

Tourism Economics credits the Pure Michigan campaign with directly influencing 2.1 million trips and $2.5 billion in visitor spending in 2018 on lodging, transportation, food and beverages, retail purchases, and recreation.

A separate analysis conducted by Indianapolis, Ind.-based Strategic Marketing & Research Insights shows the Pure Michigan campaign generated $9.28 in tax revenue from visitor spending for every $1 in state money spent.

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