Massachusetts Governor wants to spend more casino revenue on boosting local tourism

Gov. Maura Healey is proposing to spend a bit more of the money generated at Massachusetts’ two major casinos to promote local tourism, a move her economic development chief said would help support a “wildly underfunded” industry.

A policy rider in the $63 billion state budget Healey filed in January would tweak how the state distributes the money it collects from taxing gaming revenues at MGM Springfield and Encore Boston Harbor. Among other changes, Healey’s plan would double the share deposited into a tourism trust fund, to 2%.

Her budget team projects that move would create an extra $2.5 million in money for regional tourism councils and for marketing, for a 20% increase. The Massachusetts Tourism Trust Fund receives an annual $10 million from the state’s lodging tax, as well as the portion of casino revenue.

“We are increasing it,” Economic Development Secretary Eric Paley told lawmakers Monday during a budget hearing at Barnstable Town Hall. “A 25% increase is not nothing. It’s kind of nothing compared to the amount of tax revenue that comes from the industry, but we are also thinking about how we grow that over time more effectively because, again, I think we’re massively sub-optimizing.”

Testifying on the economic development spending in Healey’s budget, Paley said tourism is a “foundational driver of jobs and local revenue,” especially in regions like Cape Cod and Western Massachusetts. He said many small businesses throughout the state rely on a strong tourism economy.

Paley said Massachusetts each year welcomes more than 50 million visitors, who spend more than $24 billion.

Tourism is a major focus of state government this year as Massachusetts celebrates the country’s 250th anniversary and prepares to host World Cup soccer matches at Gillette Stadium.

State Sen. Jake Oliveira, a Ludlow Democrat, asked how money is distributed among the state’s 16 regional tourism councils. “The distribution every year, for me, doesn’t make sense, because some years I see certain regional councils getting much larger increases and some taking a nosedive,” Oliveira said.

Oliveira said he was also “cognizant of the fact that we need to do a better job of growing that $10 million” that goes to local tourism councils so that all regions of the state can benefit.

Rory O’Hanlon, chief of staff at the state economic development office, told Oliveira that a boost in federal funding during the COVID area had allowed Massachusetts to step up its tourism spending, but that extra money has since dried up. He said staff are working with regional tourism councils to “make sure we get the formula right,” in addition to proposing more funding in next year’s budget.

Paley said regional tourism councils are “right to complain” about funding. “For a $24 billion industry to be supported with $10 or $12 and a half million, when it produces billions of dollars in tax revenue, we’re wildly underfunded,” Paley said.

Monday’s hearing in Barnstable was one of several that state representatives and senators will hold on the different issue areas of Healey’s budget, as each chamber gears up to write and debate its own version of the spending bill this spring.

A Tuesday hearing at UMass Amherst will explore Healey’s proposed spending on energy, the environment and transportation.