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Tourism Dept. Seeks Recurring Advertising Funds

Tourism may be up in Tennessee, but the commissioner in charge of making sure people want to visit the Volunteer State wants the governor to commit $3.5 million to her department’s advertising.

“More and more states are catching onto the fact that tourism is one of those economic engines that you can crank up very quickly and get a return on your investment very quickly,” Commissioner Susan Whitaker explained to Gov. Bill Haslam Tuesday in Knoxville as she presented the Department of Tourist Development’s budget proposal.

In Tennessee, she said, for every dollar the state sinks into advertising, state and local governments see $19 in sales taxes.

According to the U.S. Travel Association’s 2010 Economic Impact Report, Tennessee saw a 6.3 percent increase in tourism across the state last year, adding $14 billion to the state economy compared to $13.3 billion in 2009.

The only thing she’d ask for, she said, is making sure the state permanently renews its advertising budget which last year was paid for with one-time funding.

“We would love to have those dollars put back in,” Whitaker said. She has served her post since 2003.

Haslam said maintaining the advertising funds is on the table.

The administration is seeking to balance a budget thrown out of whack by an up to $400 million imbalance between projected revenues and mandatory increases in areas including education.

“We understand the desire to have the one-time money put back in recurring. Obviously, you understand our struggle to figure out how to have all that work, and we will do that,” the governor said at the conclusion of the budget hearing. “It’s a significant part of our economy.”

If asked to reduce the agency’s $20.5 million budget, Whitaker said she would reduce off-line advertising and services at its call center that handles visitor inquiries and requests for travel guides.

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Business and Economy Education News Tax and Budget

Haslam Takes Up Task of Trimming Down Spending

Gov. Bill Haslam kicked off a four-day stretch of departmental hearings Monday as a warm-up to drafting his first state budget.

The new governor digested spending-plan projections from some heavy fiscal hitters right off the bat, including the Departments of Health, Education and Higher Education, which all had to present budget scenarios with reductions of 1 percent and 2 percent.

“We have 23 departments, if you add up all the requests, it will be a number obviously that we can’t fund,” Haslam said during a short break between hearings. “It’s their job to request that and to prioritize that … and then we have to wade through that at the end of the day.”

Haslam said he’s confident there’ll be fewer employees on the state payroll under his budget plan. But he said reductions need to be made “surgically” instead of by slashing staff with massive layoffs.

Haslam also heard from the Departments of Tourist Development and Financial Institutions Monday. On Tuesday, he is scheduled to hear from the Education Lottery Corporation and the Departments of Environment and Conservation, Transportation, Labor and Workforce Development, Corrections, Veterans Affairs, General Services, Commerce and Insurance, and Economic and Community Development. Hearings are expected to continue through Thursday morning.

Here are some highlights from Monday’s hearings:

Education

Education officials proposed an increase of $423 million in the state-funded portion of its budget, bringing the overall budget to $5.1 billion. Acting Education Commissioner Patrick Smith said the increase includes pay rasies and increased state funding to schools mandated by inflation and the state’s school funding formula.

Haslam told reporters that he’s committed to fully funding schools as called for under the formula, known as the Basic Education Program.

“If you look at new dollars that are available in the state, at the end of the day, about half of them will be end up taken up in (Basic Education Program) formula and TennCare increases, just by formula, not by doing anything different,” he said.

Smith outlined about $3.5 million in possible cuts, which would eliminate positions and supply costs. The proposal would also reduce operating costs for the state’s schools for the blind and deaf, cut grants that support public television stations operated by schools and reduce other programs. Without additional funds, about $70 million in other programs and grants paid for with one-time money will be cut.

The total education budget is estimated to decrease this year by about $510 million because of a $1 billion reduction in federal funds.

Tourist Development

State tourism officials say they want to build two new “Welcome Centers,” even though all departments have been asked to propose reductions to their annual budget as one-time federal stimulus dollars run out this year. According to the department, the state currently operates 14 Welcome Centers across the state.

They described plans to build a center as part of a solar farm in Haywood County, and another visitor center along I-26 in Sullivan County.

Haslam questioned the expansion plans: “I’m just wondering why, in tight times, we’re adding them.”

The centers had “been on the books for 10 years,” and the planning and funding had been approved for several years as well, Department Commissioner Susan Whitaker said.

Health

Haslam opened his first budget hearing with Commissioner of Health Susan Cooper, who emphasized the department’s role in instilling good health into all environments and not specifically focused on individual clinical care. She addressed disease prevention and outbreak investigations, immunizations, licensing facilities and emergency preparedness.

The department employs roughly 3,000 people.

She noted that in 2005 the state ranked 48th in the nation in health status but is now 42nd, crediting decreased use of tobacco and returns on investment in community efforts to fight diabetes.

Haslam set the tone early that he would ask many questions along the way, frequently interjecting and asking if stimulus funds had been involved in expenditures.

Cooper noted that good health factors can be attractive to new businesses. She outlined a base budget of $539 million.

The department offered several potential budget reduction areas such as travel, cutting communications costs, abolishing a few positions and eliminating a hemophilia program, which she quickly added would require a change in statute.

Higher Education

Joe DiPietro, president of the University of Tennessee, and John Morgan, chancellor of the Tennessee Board of Regents made their first budget appearances since taking their new positions. The message they gave Haslam was that while there are great financial challenges facing the system, the state has high value in its higher education institutions.

Richard G. Rhoda, executive director of the Tennessee Higher Education Commission led off the presentation and underscored the financial crunch by telling Haslam that in the last 10 years enrollment at the state’s four-year schools has gone up 22 percent but that they have seen appropriations fall 33 percent. At the same time, tuition and fees have risen 74 percent.

Meanwhile, Rhoda said, enrollment at two-year schools is up 38 percent during that period while appropriations are down 26 percent. But in that time, tuition and fees for those schools have risen 126 percent.

Morgan said space constraints are a serious problem at many of the state’s technology centers. DiPietro said one issue facing UT is that some buildings are over 40 years old and in need of repairs. When Haslam asked the higher ed panel if they had any creative ideas to address the financial stress on the system, one possibility Morgan raised was to apply means-testing to the HOPE scholarships derived from the state’s lottery. Haslam said after the hearing he is not ready to take such a step.

Reid Akins and Mike Morrow contributed to this report.

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Press Releases

Haslam Forms Statewide Tourism Committee

Press Release from Governor-elect Bill Haslam; Jan. 6, 2011:

NASHVILLE – Tennessee Governor-elect Bill Haslam today announced Susan Whitaker will continue as Commissioner of the Tennessee Department of Tourist Development.

Haslam also announced the formation of a statewide Tourism Committee. The committee will report back to him by Sept. 1 on how to maximize Tennessee’s potential in tourism by attracting more visitors, creating more effective marketing, coordinating public-private partnerships, handing off customers from attraction to attraction more efficiently and specifically focusing on tourism opportunities in smaller, economically depressed counties.

Tourism in Tennessee generates $13.3 billion in economic impact and employs more than 170,000 Tennesseans. Whitaker was first appointed commissioner in January 2003 and has served in that capacity for the past eight years, overseeing the creation and implementation of state tourism’s many campaigns.

“Tennessee tourism has taken many positive strides during Susan’s tenure as commissioner, and I am delighted to have her stay on as head of the department,” Haslam said.

Whitaker is a Chicago native and a direct descendant of Tennessee’s first governor, John Sevier. She has a bachelor’s degree in communications from Northwestern University, and before serving as commissioner, she was Vice President of Marketing for Dollywood.

“I’ve been excited to hear Gov.-elect Haslam’s ideas on regional economic development and tourism, and I’m thrilled to be a part of his team,” Whitaker said. “I’m especially proud to be representing Tennessee in tourism, and I’m excited about the future of the industry in our state.”

Whitaker is married to Ken Whitaker, and they attend Christ Community Church in Franklin. She has two sons, Josh and Jeff, and four grandchildren.

Colin Reed, CEO of Gaylord Entertainment, will chair the statewide committee. Elvis Presley Enterprises, Inc. CEO Jack Soden and Dolly Parton Productions President Ted Miller will be vice chairs of the committee.

For more information, please visit www.billhaslam.org.

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Press Releases

Haslam Wants to Brand Tennessee, Grow Tourism Jobs

Press Release from Bill Haslam for Governor; Sept. 23, 2010:

Lays Out Strategy to Support Vital Tennessee Industry at Forum

KINGSPORT – Republican gubernatorial nominee and Knoxville Mayor Bill Haslam today discussed his plans for supporting the tourism industry and growing jobs across the state during a forum hosted by the Tennessee Tourism Roundtable in Northeast Tennessee.

The candidates took questions on a number of tourism-related topics, and the Mayor explained the key role tourism will play in his overall strategy for economic development as governor.

Mayor Haslam’s approach includes an effort to integrate marketing strategies across the state in order to create a cohesive brand for Tennessee that will send a clear message that our state is a great place both to visit and to base your business. He also spoke about the need to continue to work with local communities and destination marketing organizations to drive visitors to tourist destinations across the state.

“My top priority as governor will be making Tennessee the No. 1 state in the Southeast for high quality jobs,” said Haslam. “With the tourism industry employing more than 180,000 Tennesseans across the state and its importance to rural and urban areas alike, there’s no question that it will play an integral role in our plan to create jobs in Tennessee.

“The steps we take to define a clear and compelling brand for Tennessee will pay dividends in terms of the companies we’re able to recruit from other industries as well,” Haslam continued.

Mayor Haslam again differentiated himself from his opponent by demonstrating his knowledge and understanding of state government, the tourism industry and budget issues as well as by offering real solutions and taking a fiscally conservative approach to the challenges the state faces.

“The first goal must be to take all the great aspects of life in Tennessee and weave them into a comprehensive marketing strategy for our state that can be used to maximize interest from visitors and new investment alike,” Haslam said.

“At the regional level, I will utilize the jobs base camps I will create and ensure that every region incorporates a plan for tourism into their unique economic development strategies,” continued Haslam. “Moreover, the state must continue its efforts to maximize the reach of tourists’ investments in Tennessee by driving them to locations throughout the state.

“With the right plans for marketing, conservation and economic development, we’ll take full advantage of this important industry and grow much-needed jobs here in Tennessee,” Haslam said.

Mayor Haslam is the two-term Republican Mayor of Knoxville, reelected in 2007 with 87 percent of the vote. A hardworking, conservative public servant, Haslam led Knoxville to become one of the top ten metropolitan areas for business and expansion, while reducing the city’s debt, tripling the rainy day fund, and bringing property taxes to the lowest rate in 50 years. An executive leader with a proven record of success, he helped grow his family’s small business from 800 employees into one of Tennessee’s largest companies with 14,000 employees.

For more information on Bill Haslam, please visit www.BillHaslam.com.

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Press Releases

Nashville To Host National Folk Festival

Press Release from the Nashville Mayor Karl Dean’s office, March 10, 2010:

NASHVILLE, Tenn. – The National Council for the Traditional Arts announced today with Mayor Karl Dean and Compass Records Group that Nashville has been selected as the host city for the National Folk Festival in 2011, 2012 and 2013.

The “National” is the oldest and longest-running multi-ethnic traditional arts festival in the nation. This moveable exposition of traditional music and culture will be presented in downtown Nashville for three consecutive years, with the final year in Nashville marking the Festival’s 75th anniversary. Nashville won this honor in a competitive process involving 40 cities across the nation.

“No city in the United States can match the raw talent, creativity, and long history of making music like we have here in Nashville. You combine that with our growing international diversity and growing recognition and appreciation for the arts, and you have a city that is well primed to host the National Folk Festival and to create an event of a caliber worthy of serving as the celebration of its 75th anniversary,” Mayor Dean said.

The National Folk Festival effort in Nashville will involve the entire community and bring together many diverse groups to work toward the common goal of building the festival. An estimated 800 volunteers will work with festival planners, city employees and community leaders, creating an event that will bring the region numerous benefits.

The festival is expected to draw upwards of 80,000 attendees in its first year, increasing to over 150,000 by year three and is expected to have an estimated $10-15 million in economic impact per year. The National’s stay is also intended to lay the groundwork for a new annual festival that will continue in Nashville after the National moves on in 2014.

For over 70 years, the National Folk Festival has provided a way for people to embrace the cultural traditions that define us as Americans. This three-day free, public outdoor event celebrates the roots, richness and variety of American culture through music, dance, traditional craft, storytelling, food and more.

With downtown Nashville as the backdrop, audiences can expect a diverse array of continuous music and dance performances by the finest traditional artists from all parts of the Nation, a Tennessee Folklife Area with craft demonstrations, exhibits and stage presentations focused on the heritage of the region and state, a Family Area, regional and ethnic food courts, and a festival marketplace offering fine handmade regional crafts.

The festival will shine a light not only on the traditional roots of music that has made Middle Tennessee world famous, but also on the musical and cultural traditions of immigrant groups new to Nashville and the region, with the goal of reflecting the increasingly multi-cultural character of the city, state and nation.

Nashville’s National Folk Festival will be operating as a 501(c)(3) nonprofit and will be produced in partnership with the National Council for the Traditional Arts, the Metropolitan Government of Nashville, and the Compass Records Group. A fundraising effort to support the festival is underway and both corporate and private sponsorship are being sought.

For more details, visit www.NashvilleNFF.org, www.nationalfolkfestival.com, send an email to friendsofthefestival@NashvilleNFF.org or call the Compass Records Group at (615) 320-7672.

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Business and Economy Environment and Natural Resources News

Consumers Still Volunteering to Spend on TN Getaways

Tennessee tourism is something of a bright spot amidst a lot of other gray economic news, the state’s tourism commissioner said this morning.

“It’s been a tough year for everyone, but Tennessee tourism has actually fared very well, especially relative to our competitive states,” Commissioner Susan Whitaker told members of the Senate Environment and Conservation Committee Tuesday.

That’s good news for Tennessee in general, as tourism is the state’s biggest non-farm industry sector.

For the first two quarters of 2009, the most recent estimates available, Tennessee tourism-industry business in total took about a 3 percent dip from 2008, said Whitaker. However, “leisure travel” increased 4 percent, according to the U.S. Travel Association.

Goods and services providers that depend on Tennessee tourism include food service, entertainment and recreation, lodging, retail sales, public transportation, auto rentals and travel planners.

The Travel Association numbers, released last summer, show tourism in Tennessee generated nearly $14.4 billion, a 1.5 percent increase from 2007 to 2008. Payroll income, however, was down 1.4 percent from 2007.

In the Southeastern United States, generally one of the strongest regions for tourism in the country, some states have seen double digit decline in the past couple years, Whitaker said.

Tennessee’s strong performance in the travel and tourism market was mainly driven by domestic travel, which has shown consistent growth over the past few years, according to the Travel Association report.

Nationally, Tennessee ranks now in the top 10 as a vacation destination state, said Whitaker, Tennessee’s Department of Tourist Development director since 2003.

Whitaker indicated she’s optimistic about tourism in Tennessee going forward. “We have such a wonderful, varied product,” she said. The state’s convenient geographical location and diversity of attractions has helped it weather the economic storm, and will likely continue to do so, she said.

“Where some of the state got hit very hard with business travel declines and convention contraction, there were other parts of the state that had their best years in 2008, and even last year,” she said. For example, businesses that promote and cater to river recreation have been doing particularly well, she said.

The agency’s strategy is to “to create programs and infrastructure for (local businesses and tourism promoters) to plug into and give them a leg up on our competitive states.”

“That’s been very effective,” she said, crediting her agency’s efforts for helping Tennessee move into the U.S. tourism Top 10. “At one point we were were 14th, and then 12th and now were are 8th or 10th, depending on the measure you look at,” she said.

The key challenge for the agency in the future is developing “programs that are going to benefit everybody,” she said.

Whitaker said the department’s promotional spot with Dolly Parton and Elvis Presley “went literally around the world.

“We had over 400 TV clips and 260 articles written in six-weeks time, which vaulted our website to the Top 10, which was actually ahead of Florida’s and California’s websites,” she said.

During Gov. Phil Bredesen’s budget hearings in November Whitaker proposed the state spend about $7.6 million on the Tennessee Department of Tourist Development in the coming fiscal year.

“That reflects approximately a $4.9 million reduction in non-recurring funds,” she told Bredesen at the time. “Most of that reduction will occur in the marketing department. That’s where we have the discretionary funds — and we have been able to determine that probably will be eliminating pretty much the TV and print (advertising and PR efforts).”

But the website will remain “fresh and updated” under that fiscal formula, she said.

The department’s newest online promotional effort is called, “That’s My Tennessee Story, What’s Yours.” She said it has “gained the support of people who absolutely love being here,” like country star Kieth Urban and others who are recording spots essentially “for nothing.”

Whitaker said that while it is true visitors to Tennessee do tend to gravitate to the larger metro areas to start, once they get here, “They start finding out about other things they want to do.”

“People don’t just come for a couple days in the big city here,” said Whitaker. “They like to get out on the backroads.”

She said the state’s “Discover Tennessee Trails and Byways” program — “a statewide initiative encompassing all 95 counties along 15 regional trails, and featuring Tennessee’s five National Scenic Byways and highlighting more than 70 significant tourism sites” — will help visitors get out and spend their money in rural Tennessee.

Mark Todd Engler can be reached at markengler@tnreport.com.

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