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Editorial: Tourism Tax Hike Can't Come in a Vacuum

Maine Sunday Telegram
April 22, 2007

The storms are hopefully behind us and brighter days ahead mean daffodils, picnics and, in Maine, tourists.

This tourism season, we must take a second look at the vacationers who flock to Maine and ask a simple question: Is the state, as the recent Brookings Institution report suggests, a "cheap date"?

The report, an economic roadmap for Maine, says we under-tax tourism-related revenues. It promotes raising the state's meals and lodging tax from 7 to 10 percent. The concept is worth discussing.

A hike of that nature probably wouldn't hurt tourism, and could, in fact, help it. It all depends on the other half of the equation - we know where the money would come from. But where would it go?

If the funds go to further engorge an already bloated state government, we should toss the hike suggestion out, along with the rest of Brookings' recommendations. Nothing positive can happen until the state tackles the cuts it must make. And the state would gain credibility if it made those cuts before even trying to raise any tax.

And a series of fiscally prudent cuts balanced by a judicious increase in the meals and lodging tax would be a positive combination that could benefit the state and one of its largest economic engines - tourism.

Extra funds derived from a tax on tourism should help that same sector. The state currently spends about $8 million a year promoting tourism. Increased tourism promotion would bring more people into the state, which translates into more revenue.

If the meals and lodging tax goes up, Maine should spend money on the attractions that bring tourists here. Perform vital maintenance on the state park facilities that, in many cases, are in dire need of improvements. From Sebago to Warren Island, Maine's state parks and public resources are gems that need a good polish.

Brookings calls for using funds to acquire lands and preserve open space. There's sense in that, but a priority should be to maintain-Êand improve - what we already have.

Tourism is the largest single contributor to the state's economy, generating 176,000 jobs and more than $13 billion in sales of goods and services.

Before we tinker with that vital part of the economy, all parties should have a robust discussion that includes every piece of the equation: cutting government, increasing taxes and spending wisely.

 


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