PEER reports that the Tourism Advertising Fund received approximately $12.9 million in restaurant and hotel sales tax revenue in FY 2022. State law mandates that a 1% increase in the amount of sales tax collections be deposited into the fund from Fiscal Years 2020 through 2022. Due to the annual percentage increase that took place in August 2021, FY 2022 deposits increased from $7.3 million in FY 2021 to $12.9 million in FY 2022 – a nearly $5.7 million increase.
The oversight report states that in FY 2022, MDA expended approximately $16 million from the Tourism Advertising Fund, primarily on advertisements promoting tourism in Mississippi.
FY 2022 expenditures exceeded FY 2021 expenditures by $13.5 million.
As noted by PEER, MDA establishes spending levels based on the revenue collected and deposited into the Tourism Advertising Fund in the previous quarter.
Proceeding into FY 2023 and future fiscal years, MDA’s goal is to operate the fund at a near net-zero balance. MDA says that its staff anticipates spending an average of $1 million to $1.2 million monthly from the Tourism Advertising Fund beginning January 2023.
PEER recommends that MDA continue planning expenditures around activities that show effectiveness in both output, such as search engine hits or press coverage, as well as outcomes in hopes of the results coming in the forms of increased tourism or increased restaurant and hotel sales tax revenue collections.
“MDA should create clearly defined goals for expenditures of the Tourism Advertising Fund and ensure all planned expenditures will further MDA’s plan to meet the defined goals,” the report stated.
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