KY Travel Industry Assoc. seeks marketing funds to be held harmless in budget/tax reform talks

Tourism in Kentucky is a major economic driver for the commonwealth generating more than a billion dollars in local and tax revenue for the state and the industry continues to grow, but some are fearful that changing tax laws could negatively impact that revenue stream.

In terms of overall economic impact, tourism is the third largest industry in the state, according to Hank Phillips the president and CEO of the Kentucky Travel Industry Association.

There are 193,000 jobs or 10 percent of the state’s workforce that are directly or indirectly related to the tourism industry; and it’s a diverse industry — from religious travel stops like the Ark Encounter, to lakes, horses and the bourbon industry.

“The reason that tourism is important and so much is invested in it is the people who live where people visit — they are the end game, bottom line beneficiaries of tourism,” Phillips said.

Even though the industry is doing well, Kentucky is ranked 28 out of the 50 states in tourism advertising dollars. For every dollar invested by the state into marketing, Phillips says $16 is returned in state and local tax revenue.

Phillips has been meeting with and asking lawmakers to leave alone local restaurant tax which support local travel efforts, and a 1 percent transient room tax which is the only statewide generator of statewide tourism marketing funds.

“Marketing is essential, so we need to maintain the marketing, so we ask that they not repurpose those taxes for things other than tourism,” he said.

Even with a disadvantage compared to other states in current marketing funding, Phillips said Kentucky can compete as long as those funds are not redirected in a larger tax overhaul.