State lawmakers on Thursday rejected a request from the Department of Parks and Tourism to increase its $11.3 million-a-year advertising budget for tourism promotion by $1.5 million in each of the next two fiscal years.
In a voice vote, the Legislative Council and Joint Budget Committee approved a motion by Rep. Mark Lowery, R-Maumelle, to draft appropriation measures for the department without the requested $1.5 million increase to $12.8 million for tourism advertising in fiscal 2018 and fiscal 2019. Republican Gov. Asa Hutchinson recommended the increases.
Fiscal 2018 starts July 1. The Legislature will consider the fiscal 2018 measure during its regular session starting Jan. 9. Fiscal 2019 appropriations would be considered in the 2018 fiscal session.
The advertising budget for tourism promotion is financed through the state's 2 percent sales tax on tourist-related businesses, state officials said.
The proposed increase in the tourism advertising budget would allow the department to maintain an active presence in marketing Arkansas to prospective visitors, to cope with recent changes in the travel industry, and to allow expanded Internet marketing campaigns and increased broadcast and print media advertising, department officials said in budget records.
But Lowery said the department has awarded its advertising contract sole-source -- without bids -- for many years.
This month, Tourism Director Joe David Rice said the state will no longer split its advertising contract between an online company and an advertising agency. Currently, CJRW of Little Rock is responsible for advertising and promotions of the tourism industry while Aristotle Inc. of Little Rock oversees the website Arkansas.com. CJRW, or firms operated by its founders, has held the tourism account since 1979.
"Starting next July, I understand that there is going to be an RFP [request for proposal] that all the various advertising contracts are being bundled into a mega, jumbo RFP," Lowery said. "I just think that at this point until we complete that transition of going from almost all the advertising at Parks and Tourism going out on sole source to one agency, an increase of $1.5 million in that advertising line is excessive."
Lowery said the requested increase in the advertising budget is tied to Internet advertising, and the department already has a Web page that can be promoted by changing its existing advertisements.
"This is the most significant jump that they have ever requested in any one fiscal year and in any biennium [a two-year-period]," he said.
After the meeting of the Legislative Council and Joint Budget Committee, Department of Parks and Tourism Director Kane Webb said, "If Arkansas tourism is to continue generating travel-related sales taxes at a record rate, this is no time to curtail advertising."
"We have an excellent track record of getting a great return on investment for what we spend marketing and promoting Arkansas," he said in a written statement.
"Just last year alone, tourism generated some $375 million in state sales tax receipts, funds [that] the Legislature invested in public education and other services," Webb said. "The latest study by Longwoods International, one of the world's foremost authorities on tourism research, showed that every dollar spent on tourism advertising in Arkansas yielded $10.14 in return."
Metro on 10/23/2016