Budget Cuts Threatening Chicago CVB, Including Sports Commission
8 Jul, 2015By: Mary Helen Sprecher
Illinois Governor, Former CVB Leader, Once Praised Economic Impact of Destination Marketing
Following weeks of frantic negotiations and calls to action – and a substantial amount of press – one of the nation’s largest convention and visitors bureaus, Choose Chicago, is currently without funding. One part of Choose Chicago is the Chicago Sports Commission.
According to eTurboNews, the devastating decision came as part of radical cuts to the state’s FY 2016 budget, in which Illinois Governor Bruce Rauner, a Republican, had been locked in a stalemate with his state's Democratic legislature for the past month as both parties considered how to solve a $4 billion budget shortfall.
Democrats wanted Rauner to address the issue with a tax increase that would fill the budget gap without sacrificing critical government services, such as Medicaid, noted an article in Successful Meetings. The governor, however, refused to do so without concessions from Democrats allowing him to weaken the influence of labor unions in Illinois.
According to ABC News, in late June, one day after signing into law public-school funding for the fiscal year beginning July 1, the new GOP governor nixed the rest of the proposed budget, which Democrats acknowledged was short on revenue. He continued criticizing Democrats who, he claimed, indiscriminately spend taxpayer money and then play games to cover shortfalls.
Last week, Democrats took an emergency one-month spending plan to a final vote; however, it fell short and was not enacted.
Tourism is hardly the only state agency to be affected; other cuts would include Medicaid payments for doctors serving low-income patients, along with payments for vendors who provide day care so parents can work, contractors who operate homeless shelters and those helping the disabled or victims of child abuse. Government workers at various levels are also scrambling for information on how long their paychecks will keep coming.
Among others, Rauner vetoed 19 bills that comprised the budget for tourism, meaning the whole Illinois tourism budget was vetoed, including over $12 million in grants to Choose Chicago. Effective July 1, 2015, Choose Chicago is no longer receiving its funding from the state’s hotel tax which makes up 40% of its operating budget.
Rauner said in a statement: “For too long, the State of Illinois has made spending promises that exceed available revenues, relied on accounting gimmicks to make budgets appear balanced, used borrowing and cost deferral strategies to push costs into the future, and delayed payments to vendors.”
In the weeks leading up to the governor’s vote, Choose Chicago President and CEO Don Welsh sent out an "action alert" sent to supporters, urging them to contact their state lawmakers. "This is our largest single source of revenue representing 40 percent of our annual operating budget,” noted Welsh. “It devastates Choose Chicago for no immediate or long-term positive result on the state budget. Choose Chicago will lose more than $7.2 million in budgeted revenues through December of this year and well over $12 million over the next 12 months. Approximately half of every tourism dollar spent in the state is spent in Chicago. To cut an organization that is a driving force for the city and state's economic recovery is irresponsible and unwarranted."
The U.S. Travel Association supported Choose Chicago's position, as did many tourism-related groups.
Earlier in June, the Rauner administration identified Choose Chicago as an area where funding would be suspended if no budget resolution was reached by July 1. As the deadline loomed, tourism officials cut the “Epic Chicago” advertising campaign two months earlier than planned and halted its winter campaign, both of which were aimed at bringing in more visitors.
The Chicago Sports Commission, meanwhile, has not commented on what its next move might be. Upcoming events include USA Rubgy’s match against Australia at Soldier Field and the ITU World Triathlon Grand Final, which includes a number of multisport events bringing in international talent over a four-day period.
Rauner resigned as chairman of the board of Choose Chicago two years ago in advance of his run for governor. In 2013, while still in the tourism role, Rauner had actively praised funding such activities, noting, "the city now realizes" the value of money spent on marketing and tourism.
"A dollar more spent by the city on marketing today generates two dollars back in city tax revenues within nine months," he told reporters at the time. "Not many investments double in nine months."