Calgary trade center bill tabled in committee

A bill that would use state bed tax revenue to fund a Montana trade center in Calgary passed the Senate by 29-21 on Feb. 16 and was transmitted to the House where it was tabled in the House Business and Labor Committee on March 10.

Introduced by Sen. Dee Brown, R-Hungry Horse, Senate Bill 244 is co-sponsored by eight Northwest Montana legislators, including Republican Reps. Steve Lavin, Frank Garner, Keith Regier, Mike Cuffe, Mark Noland and Albert Olszewski, Republican Sen. Mark Blasdel and Rep. Ed Lieser, a Democrat from the tourist town of Whitefish.

“The opponents to the bill didn’t protest the idea of the office but didn’t want to use bed tax money to fund it,” Brown said. “There are more than 4 million people in Alberta with an annual family income of almost $85,000. It makes sense to tap into that market with boots on the ground and a presence in their largest city.”

Nearly a million Canadian tourists come to Montana each year, spending about $275 million each year. Even with the falling value of the loonie, Montana is a bargain for Canadians, whether it’s lodging, dining, tourist attractions and shopping. The absence of a sales tax in Montana contributes to draw of the state’s numerous year-round tourist attractions.

According to Brown’s bill, the Montana Department of Commerce would establish a trade center in Calgary with at least one staff member to promote trade and tourism in Montana.

“The establishment of the trade center is for promotional purposes only and is not intended to regulate or impede interstate commerce or commerce with foreign nations,” the bill states.

The state collects a 4 percent tax on lodging that is used to fund the Montana Historical Society, the Institute for Tourism and Recreation Research at the University of Montana, maintenance at state parks, and to promote tourism in Montana.

Bed tax revenue reached $21.6 million in 2014, an 8 percent increase over the previous year. Receipts have increased every year since 2010, growing by about 16 percent over the past five years.

Nearly 65 percent of the state’s bed tax goes to the Commerce Department for tourism promotion. Senate Bill 244 calls for using some of that money for establishing a trade center in Calgary.

A fiscal note attached to the bill estimates that about $306,300 in bed tax revenue would be used to pay for the trade center. In her rebuttal to the fiscal note, Brown questioned the cost estimate in the fiscal note.

“The price tag of $306,300 is a moving target since we haven’t put out a prospectus nor hired a person to staff the center,” she said.

She also noted how much bed tax revenue has grown in recent years. Revenue was projected to grow another 25 percent by 2017.

“Therefore, I believe that the cost for the office and one staff member would not redirect funds being spent in another way,” she said. “Legislators will decide the policy of this bill knowing it isn’t redirecting funding.”