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F I S C A L I M P A C T R E P O R T

SPONSOR Varela

DATE TYPED 1/28/05

HB 204

SHORT TITLE Tourism Advertising and Promotion

SB

ANALYST Rosen

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$1,500.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Tourism Department (TD)

Energy, Minerals and Natural Resources Department, State Parks Division (SPD)

SUMMARY

Synopsis of Bill

House Bill 204 appropriates $1,500.0 from the general fund to TD for expenditure in FY06 for

the purpose of tourism advertising and promotion.

Significant Issues

The tourism industry in New Mexico is the second largest private-sector industry in the state and

generates almost $4 billion in revenues annually. Competition from neighboring states for this

valuable portion of New Mexico’s economy must be addressed with imaginative and informative

messages about the many attractions and advantages New Mexico has to offer.

PERFORMANCE IMPLICATIONS

The funds provided by this bill enhance TD’s ability to respond to promotional and advertising

opportunities that occur after a marketing plan is in place and to address changing or special

conditions in a marketplace that present potential advantages (such as the relation of the US dol-

lar to some international currencies).

House Bill 204 -- Page 2

FISCAL IMPLICATIONS

The appropriation of $1,500.0 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the gen-

eral fund.

OTHER SUBSTANTIVE ISSUES

Approximately $250.0 of a similar appropriation to the Tourism Department in FY05 was di-

rectly earmarked by the Legislature for the marketing and promotion of state parks and other

programs in the Department of Cultural Affairs, Department of Transportation and Game & Fish

Department. Of this $250.0, approximately $50.0 was made available to SPD by TD. SPD notes

it has less than $2.0 available per state park per year for marketing and advertising and indicates

additional budget dollars made available in FY05 had a tremendously beneficial impact on

SPD’s ability to attract visitors to the state parks and support rural economic development based

on park tourism. SPD indicates inclusion of SPD directly in this appropriation would allow SPD

to increase statewide tourism, provide increased economic impact in fifty-six park-associated

communities and provide additional revenue for the State of New Mexico.

ALTERNATIVES

SPD recommends $100.0 of the appropriation be earmarked specifically for increased advertis-

ing and promotions of New Mexico’s state parks.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The level of New Mexico’s exposure in various tourism markets will be reduced or eliminated.

JR/lg