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Kentucky tourism leaders brief budget committee on growth, uses of 1% marketing fund
Summary
Tourism, Arts and Heritage Cabinet and Department of Tourism told a legislative budget review committee the 1% Tourism Meeting and Convention Marketing Fund has grown and will use roughly $15 million of current appropriations for marketing and matching grants; the fund cannot be used for capital projects.
Melissa Brewer, executive director of finance for the Tourism, Arts and Heritage Cabinet, and Mike Manchin, commissioner of the Kentucky Department of Tourism, told the Budget Review Committee on Economic Development, Public Protection, Tourism and Energy that the state’s 1% Tourism Meeting and Convention Marketing Fund has grown and is being used primarily for marketing, regional matching grants and operating activities.
"Good afternoon. I'm Melissa Brewer, the executive director of finance for the tourism arts and heritage cabinet, and this is Olivia Atkins, the marketing director for Kentucky State Parks," Brewer told the committee during the presentation. She noted that receipts from the tax imposed under KRS 142.400 are deposited into the Tourism Meeting and Convention Marketing Fund and used solely for marketing and promoting tourism in the commonwealth.
The fund, financed by the state’s transient room tax, cannot be used for capital or construction projects, Brewer said: "It's important to note that the funds cannot be used for capital and construction projects." Committee members were shown five-year growth in transient room tax receipts as an indicator of rising overnight visitation.
Manchin described how marketing dollars create a feedback loop for tourism businesses: "The 1% funds truly represent our circle of life. The more funding we have to promote the state as a tourism destination and drive overnight visitation, the more visitors stay in our accommodations, generating more revenue for the 1% funds and the circle repeats itself." He said the fund supports statewide marketing, international and group sales, trade-show participation, content creation and research.
Brewer told the committee last year’s enacted budget increased the fund appropriation after the governor’s recommendation, providing an additional $3 million in fiscal 2025 and $7 million in fiscal 2026. She said about $7 million has been spent so far in the current appropriation and that the cabinet plans to spend roughly $15 million of the current appropriation, which totals just over $22 million.
The cabinet also described a regional matching program that distributed $2 million from the 1% funds to 87 local tourism commissions across the state to assist local marketing efforts. The presenters emphasized the fund’s statewide reach, noting tourism touches communities in all 120 counties through meetings, conventions, cultural attractions, natural sites and related businesses.
The presentation was informational; no committee action on the fund was recorded in the transcript. Earlier in the meeting the committee approved minutes from its previous session by voice vote; the transcript records the approval but does not name the motion’s mover or give a roll-call tally.
The cabinet did not provide line-item details in the transcript for the planned uses of the remaining appropriation beyond the categories listed in the presentation, and presenters said they would describe later how the remaining funds will be spent.
