State suspends guidelines for matching tourism funds

Aug. 28--An outcry from local tourism boards has forced the state to rethink plans to send more matching dollars to the state's two biggest cities while leaving a smaller pool of money for agencies such as the Lehigh Valley Convention and Visitors Bureau.

"Based on the reaction, which was significant and largely negative, [the proposal] has been suspended," said Mickey Rowley, the state's deputy secretary for tourism.

The new guidelines have been suspended until Sept. 13. "We will take comments until then and reissue new guidelines after that," Rowley said.

Under the proposed guidelines, the state was to increase Pittsburgh's share by 37 percent and Philadelphia's by 11 percent in the upcoming fiscal year, according to state Rep. Tom Tangretti, D-Westmoreland, who heads the House Tourism & Recreational Development Committee.

Meanwhile, there would be a 12 percent drop in money available to the other tourism agencies.

The proposal had many of the 49 tourism agencies on the phone with their legislators, pleading for help. Agencies apply for matching grants in October.

The outcry comes on the heels of the state's decision to trim the tourism budget by 3.75 percent this fiscal year, from $11 million to $10.5 million.

For the Lehigh Valley Visitors Bureau, a 12 percent cut would translate to a $37,000 loss, according to President Michael Stershic. The bureau received $269,000 in matching funds last year, he said.

"We're asking them to reconsider," Stershic said. "It will affect the amount of marketing we're able to do. We would look at what we could cut in administrative overhead, but the likely cuts would be from our marketing overhead."

The Pocono Mountain Visitors Bureau estimated it could lose $200,000.

"It's very disturbing. Agencies across the state are up in arms about it," said Bob Uguccioni, president of the four-county bureau, which received $1.8 million in state matching funds last year.

"I don't think it will stick. There's too much turmoil," Uguccioni said about the suspended guidelines. "It has caused a firestorm around the state, and we're in the hospitality business. We don't like to fight with other tourism agencies. It's nothing against Philadelphia and Pittsburgh."

Jerry Lepping, executive director of the Bucks County Conference and Visitors Bureau, which received $260,000 matching funds last year, said the biggest problem agencies face is that they prepared their upcoming budgets in June, none of which anticipated more than a 4 percent cut in funding.

"What we didn't know is they, in effect, are giving us a 12 percent cut. For us, that's about $20,000," he said.

On top of that, Lepping said, the state wanted to require tourism agencies to spend 15 percent of their state outlay on advertising in state-owned publications.

"We didn't like that either," he said.

Rowley said most of the reaction was over the rule about advertising in state-owned publications.

"They felt it would cut into their freedom to spend money as they see fit," Rowley said. "We thought it would help with deficits. Other states do it. But we should have involved agencies a little more in how we should go about it."

Rowley said another thing making it harder to divvy up the money is that the state provides matching grants. Rowley said 47 counties introduced hotel room taxes in recent years, nearly doubling their tourism revenue, from $24 million to $42 million. Higher revenue usually translates into higher state matching grants.

"Because of the hotel tax, more agencies are applying. Therefore, we have an obligation to look at this. We think the hotel tax is a factor in how we should administer a limited source of revenue. The state cannot continue to match it all. We couldn't keep up with it, and we haven't heard any member of our legislature say we should," he said.

The Associated Press contributed to this story.