By PHIL KABLER
CHARLESTON, W.Va. — Commerce Secretary Woody Thrasher said Wednesday he believes it would be workable to break up funding for Gov. Jim Justice’s proposed $105 million Save Our State Fund over three years.
“I wouldn’t think I could spend $105 million in one year, and spend it wisely,” he told the Senate Finance Committee.
Justice proposed the fund in his State of the State address, saying it would provide much-needed resources to jump-start economic development and tourism in the state.
Thrasher said the state Development Office simply has not had enough funds to compete with neighboring states when it comes to recruiting new businesses to the state or encouraging existing businesses to expand.
He said the office had an $8 million budget, but in recent years, that amount has been cut to $3 million to $4 million.
“It’s going to a gunfight with a cap pistol,” he said.
The funding can be used to close deals with businesses, whether it be to improve site infrastructure, such as upgrading sewer treatment facilities or extending gas lines, or to provide equipment or enhanced workforce training.
Thrasher said the state looks for projects that will provide a significant return on investment, such as the soon-to-open Proctor & Gamble plant near Martinsburg, which he said should return the state’s investment within three years of operations, not counting multiplier effects.
He said the fund will also be available to promote tourism, including supporting programs that are zeroed out of Justice’s budget bill, including Mountain Stage and various fairs and festivals statewide.
“It’s my personal belief that things like Mountain Stage and the Blackberry Festival … are inherent to West Virginia,” he said.
“Tourism would be remiss, if they have this enhanced budget, not to look at all of these sorts of entities,” he said.
Justice’s budget also proposes increasing state wholesale liquor prices and raising the tax on beer to provide an additional $5.6 million a year for tourism advertising.
“We feel Tourism has great opportunity,” Thrasher said. “We find we don’t have a really clear, concise, consistent message.”
State Tourism Commissioner Chelsea Ruby told the committee there is a direct correlation between tourism advertising and tourist visitation.
She noted that Michigan — a state frequently cited by Justice for its investment in tourism — had a tourism advertising budget of about $5 million in 2005, and had some of the lowest hotel occupancy rates in the U.S.
Michigan increased its ad budget to about $13 million, and saw such an upswing in visitation that it went on to increase ad spending to the current level of about $30 million a year, Ruby said.
Conversely, she said, in the mid-1990s, Colorado eliminated its tourism advertising budget as a cost-cutting measure, and experienced a drop of three million visitors within one year.
She noted that in recent surveys, only about 50 percent of people in targeted markets recalled seeing West Virginia tourism ads, because the state could not afford to air the ads with sufficient frequency.
Also Wednesday, Thrasher said his initial review of divisions within the Department of Commerce leads him to believe he can make budget cuts.
“I haven’t seen a division yet that doesn’t have the opportunity to trim, some greater than others,” said Thrasher, who stepped down as president of the engineering and architecture firm that bears his name to accept the Commerce post.
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