LANSING – A few bucks charged on rental cars picked up near Michigan airports could be a way to finance the state’s Pure Michigan campaign, Gov. Jennifer Granholm said over the weekend.

Speaking on Detroit WDIV TV’s “Flashpoint,” Granholm said the tourism community identified the rental car fee as one way to address the loss of $30 million to $40 million in tourism promotion dollars in the upcoming 2010-11 budget. In her State of the State address last week, the governor said the tourism program should be funded, but did not say how.

During the show, Granholm said the state should invest in the program because it brings in $2.23 in tax revenue for every $1 spent and because the industry employs more than 160,000 people.

The governor believes the marketing campaign should be paid for and that the rental car fee “is the best option” at this point, her spokesperson Liz Boyd said Monday. While it would only fund part of what the program costs to run, Boyd said that was better than the current situation, which is no funding.

But the Democratic-led House dropped the rental car fee when it passed the tourism funding package in December (HB 5017 ). The industry had complained the fee would unjustly raise their costs for a program that benefits the entire state. They also said non-profits and low-income residents who rent cars would be adversely affected.

According to committee testimony, a rental car fee of $2.50 would raise $13 million in state revenue a year and only about 3 percent of rental car transactions made in the state come from Michigan residents.

Instead, the chamber moved forward with legislation that would dedicate the increase in sales and use tax revenue attributable to tourism-related business for the advertising campaign.

Rep. Joel Sheltrown (D-West Branch), chair of the committee that reviewed the legislation, said Monday he doesn’t understand Granholm putting the rental car fee back in play when it was her Michigan Economic Development Corporation official who negotiated a package without it.

“I don’t think there’s any hope of the Senate agreeing to that proposal,” he said. “What we sent over has the best chance (of passing).”

Sheltrown said MEDC Legislative Liaison Jim McBryde told him that the rental car fee was dropped to get a bipartisan agreement to the package. However, since then, Sen. Nancy Cassis (R-Novi) has said she will come up with a different way to fund the tourism program than what the House passed, leaving the whole initiative in limbo.

Sheltrown said it is critically important that the state finance this program.

McBryde did not return a message seeking comment for this story.

Liz Boyd, Granholm’s spokesperson, said she couldn’t comment on what McBryde did or did not say.

Granholm is slated to give her budget presentation on Thursday.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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