Arizona tourism measure draws opposition from some lawmakers

PHOENIX – A measure to let the Arizona Office of Tourism sell goods and services to raise money is drawing opposition from some Republican lawmakers who see it as “a scandal in the making.’’

HB 2381 is being pushed by Debbie Johnson, the agency’s executive director.

She said her office gets inquiries by people wanting to buy some of the artwork produced to promote Arizona tourism. Only thing is, Johnson told lawmakers, there is no legal authority to do that.

What the legislation would do, she said, is give the go ahead. More to the point, Johnson said it could raise $10,000 to $20,000 a year “to start,’’ with the dollars raised being focused on getting people to visit rural and tribal areas.

But it is that “to start’’ issue that Sen. Vince Leach, R-Tucson, said gives him concerns.

His concerns and those by Sen. Warren Petersen, R-Gilbert, were enough to at least temporarily derail the legislation which had been set for Senate floor debate on Wednesday. Whether it comes back – and in what form – remains to be seen.

Leach said during floor debate this isn’t the first time government agencies have come to the legislature looking for new ways to raise money.

Consider, he told colleagues, that they gave the go ahead years ago for universities and local governments to enter into deals to erect commercial development on public property. That means the development is exempt from property taxes for some period of time.

Leach said that what was supposed to be a targeted economic development tool has ballooned, to the point where many buildings in downtown areas of many cities and those built on university property are not on the tax rolls.

And he said that HB 2381 is “that nose under the camel’s tent’’ for unchecked expansion of the powers of the Arizona Office of Tourism.

“This is a very dangerous bill,’’ added Sen. Warren Petersen, R-Gilbert.

“I don’t think people really grasp what’s happening with this,’’ he said during Wednesday’s Senate session in terms of what he sees as giving unchecked authority to the agency. “But, folks, this is a scandal in the making or future scandalous headlines in the making.’’

That’s not the way that Johnson presented the issue to lawmakers during hearings earlier this year.

She said her agency has created various pieces of art about Arizona. Perhaps the best known was the 2019 unveiling of a series of colorful Welcome To Arizona signs that were erected on state highways.

“We’ve had so many people reaching out to buy posters and promotional items we’ve had made,’’ Johnson said. “But, unfortunately, we’re not able to sell those right now.’’

The problem, she said, is that there is no dedicated fund into which to put the money. What HB 2381 would do is clarify that the agency can not only produce, own, sell and license artwork but that any cash generated would go into a newly established “tourism development fund.’’

But the verbiage in the measure has been creating questions.

Rep. Kelli Butler, D-Paradise Valley, openly wondered why the Office of Tourism needs permission to sell not just goods but also services. Johnson assured her that was simply to be able to arrange to have an outside firm print up things like T-shirts.

And Johnson said that allowing her agency to own the “intellectual property’’ simply would allow it to license its use by others.

Butler ended up voting for the measure when it went through the House. But Leach said he’s not quite ready to provide such broad authority to a state agency, not after he believes lawmakers were burned in particular by universities saying they need just a little bit of leeway for commercial developments on public property.

What’s needed, he said, is to “tighten this up a little bit.’’ But, as currently crafted, Leach said it’s not acceptable.

“You could drive all the Penske rental trucks through the gaping hole here,’’ he said. Leach said he wants “guardrails’’ before voting for it.

Petersen said the language in the measure, at least as it stands, is unacceptable.

“Basically, we’re going to give somebody taxpayer dollars and allow them to purchase, buy things, run businesses,’’ he said. But Petersen said it’s not like a business.

“They don’t have the risk that a normal taxpayer has when they’re using their own money,’’ he said. “They’re using the taxpayers’ money to do this.’’

All that, Petersen said, is “not appropriate use of government funds.’’

There was no immediate response to the Senate’s decision to shelve the issue for the time being either from Johnson or Rep. Steve Kaiser, R-Phoenix, who is the sponsor of the measure.