How tourists can resolve state's deficit woes

California Gov. Gavin Newsom recently unveiled his latest budget proposal, and after years of surpluses, it appears that COVID lockdowns, inflation, and other factors have critically impacted the finances of the Golden State. According to Gov. Newsom, California suddenly faces a $24 billion deficit. More concerning, however, is the projection that revenue to state coffers could plummet by another $30 to $50 billion.

To his credit, the governor appears to be taking the matter seriously, having vetoed 169 bills that could have cost taxpayers billions while laying out a plan to delay over $7 billion in planned spending, but more needs to be done.

The Golden State has many inherent advantages that most states will never have. There aren't many places in the world where you can swim in the ocean, hike in the desert, and ski in the mountains all in one day. The state's natural beauty and temperate climate make it the envy of the world.

So it shouldn't surprise anyone that tourism is a significant economic driver for California. Nearly 260 million people visited the state in 2022, which infused $135 billion into the state's economy. That number could increase by almost 10 percent this year, but only if lawmakers do everything they can to jumpstart the tourism industry.

When I represented California in the U.S. Congress, my colleagues and I attempted to improve California's economy by introducing the Tourism and Partnership Act, a bill aimed to develop a national travel strategy for increasing U.S. tourism. The legislation recognized that advertising is a pivotal component to the success of an effort to boost tourism.

Studies demonstrate that even during economic downturns, effective marketing campaigns boost tourism significantly. The U.S. Ad Council's projections suggest every $1 of ad spending produces roughly $19 in economic activity.

These facts have not been lost on Gov. Gavin Newsom and the legislature, which worked together to spend $95 million for tourism marketing programs in 2021 to better market California to prospective visitors. Their plan worked remarkably well, with visitor spending increasing 50 percent year over year. Why not repeat the success of this program this legislative session to help resolve the state's budgetary shortfalls?

However, ad spending, while helpful, won't be enough. Convincing people to come to California will prove more difficult in today's tough economic times, where skyrocketing air travel costs have discouraged thousands of families from flying. And so, to maximize the success of their tourism push, decisionmakers will also need to work to bring travel costs down.

California Attorney General Rob Bonta should, for instance, work to persuade the U.S.Department of Justice from blocking airline competition.

A recent study found that California's airports have seen some of the highest airfare increases in the United States, with most of them seeing more than $125 average annual per ticket increases year-over-year.

Those rate hikes are not going to get any lower if the DOJ should continue to shield the four dominant airlines that collectively control 80 percent of the industry from competition.

For example, the DOJ is currently trying to stop JetBlue from acquiring Spirit Airlines, which would increase flight options for the thousands of Americans who currently have no choice but to pay throughthe-nose prices to the four major airlines. Airlines like JetBlue have already demonstrated their ability to substantially reduce legacy airlines' power and slash fare prices overall, so the California attorney general should work to ensure that the DOJ approves the acquisition of Sprint by JetBlue without delay.

This year, California's natural beauty is expected to bring visitors who will spend over $1 billion in the Golden State.That spending, in turn, will produce nearly $10 billion in revenue for California's treasury, reduce the state's deficit woes, and keep 900,000 residents working. However, to augment the economic boost tourism provides to California this fiscal year, legislators and policymakers must more aggressively market California as a must-see destination while keeping travel costs as low as possible. The more families who understand the incredible variety of tourist attractions, which the state has to offer and the more they can afford to travel, the more they will travel thereby benefitting California and its permanent residents.