Choose Chicago an epic cut for Rauner
State money for city branding is nonessential.
Suspending funding for Choose Chicago – the city’s primary tourism-promotion tool – was among the many line items in Gov. Bruce Rauner’s second list of necessary spending cuts should the Illinois General Assembly fail to pass a balanced budget come July 1.
Of the many other sensible reforms put forth, the Choose Chicago decision stands out because of Rauner’s ties to the organization. He served as the chair of Choose Chicago after it was created out of the 2012 merger between the Chicago Office of Tourism and the Chicago Convention & Tourism Bureau, where he was the chairman for two years.
Financial circumstances and basic fairness indicate that Rauner is on the right path by suspending state funding for Choose Chicago.
Choose Chicago is set up as a public-private partnership, and 85 cents of every dollar it spends comes from state or city taxpayers. Of its $33.1 million budget, more than $11.6 million comes directly from state coffers, according to the agency’s annual report. Another $7.9 million comes from city taxpayers (equal to the cost of keeping nearly 60 police officers on the street, or resurfacing 180 city blocks), while the Metropolitan Pier and Exposition Authority (itself a beneficiary of state dollars) kicks in $8.6 million. Private grants account for the remaining $5 million.
The public money flowing to Choose Chicago comes primarily from state and city taxes levied on hotel owners.
Choose Chicago spent nearly $9 million on marketing in 2014, including the development of a city branding campaign called “Chicago Epic,” made with the help of advertising agency Leo Burnett.
The group also pays for four tourism bureaus in China, the newest of which, located in Chengdu, opened late last year.
It’s unclear how much money was spent on these endeavors in particular (Crain’s Chicago Business pegged the cost of the Chinese offices at $300,000 each) and it would be nearly impossible for the average Illinoisan to find out. Choose Chicago is exempt from the Illinois Freedom of Information Act because of its status as a public-private partnership.
The Chicago Sun-Times editorial board has expressed concerns about the organization’s lack of transparency, writing:
“… Choose Chicago is playing the same old political insider’s game for which Illinois and Chicago are notorious. Who gets a consulting contract and who gets hired seem remarkably aligned with Choose Chicago’s desire to curry favor with the single most powerful elected official in Illinois, House Speaker Mike Madigan.”
There’s no arguing Choose Chicago benefits certain players in the city’s tourism industry: One of the group’s primary goals last year was to book 2.3 million overnight hotel stays in the city through conventions held at McCormick Place. They topped it, driving nearly 2.6 million room nights.
And when travelers are swayed by Choose Chicago’s efforts, and come to visit the city, they pay the nation’s highest traveler taxes, according to the Global Business Travelers Association.
Why are hotel owners across the state subsidizing a windfall for Chicago hotels and city coffers?
Choose Chicago’s private-sector sponsors include American Airlines, United Airlines, American Express and Bank of America. These companies don’t need the help of downstate hoteliers to make strategic investments. If Choose Chicago has been such a boon for business, these multibillion-dollar companies, along with city hotel owners, should have no problem filling the gap left by a cut in state funding.
Developing sleek branding campaigns and funding tourism bureaus overseas are not essential government services. If certain business owners in the industry care to pay for these services, the taxing power of government is not necessary to do so.
Tourism investments are more fairly made by those businesses with skin in the game, not taxpayers across the state.