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Senate committee advances Tennessee tourism budget after department cites visitor spending growth
Summary
The Senate Energy, Agriculture and Natural Resources Committee voted to send the Department of Tourist Development’s FY request to the Finance Committee after Commissioner Mark Ezell outlined growth in visitor spending, a request for recurring and nonrecurring dollars, and rural outreach efforts.
The Senate Energy, Agriculture and Natural Resources Committee on March 26 advanced the Department of Tourist Development’s budget request to the Finance Committee after hearing a presentation from Commissioner Mark Ezell and department staff.
Ezell told the committee that Tennessee has seen rapid visitor-spending growth in recent years and argued the state benefits when out-of-state visitors pay sales taxes. "When visitors pay, residents benefit," he said, describing tourism as "real money" that produces sales-tax revenue without raising taxes on Tennesseans.
The department asked the committee to approve recurring and one-time funds to sustain its marketing and grant programs. Ezell summarized the request as roughly $25,000,000 in recurring funding and $15,000,000 in nonrecurring support; combined with existing resources the increase would move the department toward a roughly $50,000,000 annual budget that tourism leaders say helped drive recent gains.
Nut graf: The committee’s action keeps the tourism budget on the legislative track and preserves a suite of marketing and grant programs the department says are tied to visitor spending, hotel development and rural economic gains. Eleventh-ranked growth in visitor spending, larger tax receipts from overnight visitors, and private investment in counties were central points in the presentation.
Most important facts first: Ezell said Tennessee now approaches $30 billion a year in visitor spending, which the department estimates generates about $2 billion in sales-tax revenue statewide. He credited a larger marketing budget with lifting Tennessee's ranking and said rural counties — including 44 counties classified as distressed or at risk — have seen larger percentage gains in overnight visitation.
Committee members asked about workforce turnover within the department, welcome-center maintenance, grant commitments and how the department will replace federal one-time funding. Assistant Commissioner Pete Rosenberg said vacancies are concentrated in welcome centers and building maintenance; Melanie Beach, assistant commissioner for rural tourism, described county branding, Google optimization and photo/video grants the department has provided to local Destination Marketing Organizations (DMOs).
Ezell and staff listed concerns: rising competition from neighboring states and national destinations, softness in discretionary visitor spending, labor shortages in hospitality, and diminishing federal ARPA/CARES Act dollars that previously supported multi-year grant strategies. The department said it expects some programs to require recurring state support to continue.
The committee voted to move the department’s budget to the Finance Committee; the roll call showed unanimous support from members present. Chairman Reeves moved the budget, and Vice Chair Lowe seconded the motion.
Ending: With the budget vote, the committee sent the tourism request to Finance for further consideration. Committee members and department staff also noted follow-up items — including data on advertising reductions and capital needs for welcome centers — that senators said they expect to review during later hearings.
