Los Angeles Tourism Organization Needs to be Eliminated

David Williams

June 28, 2011

California has become known for two things:  setting trends (such as ham and pineapple pizza) and bad government. The latest example of bad government comes from our friends at Reason.com who reported that “Although excessive public-employee salaries are getting close attention in California, many ostensibly private officials – including a tourism bureau boss who makes almost $500,000 a year – are paid mostly or entirely from public money. In some cases, these compensation packages are higher than the pay of public employees who have been the focus of public outrage.” This “tourism bureau,” LA Inc., which is a non-profit organization that “functions as Los Angeles’ convention and visitors bureau,” has no seemingly justifiable existence and is funded by taxes.

According to LA Inc.’s tax filing, the purpose of this organization is to, “Advance the prosperity of LA’s visitor economy and the livelihoods that depend on it.” So, taxpayers are paying the president of LA Inc. more than the president of the United States to advertise Los Angeles as a tourist destination. This expenditure is wasteful considering the immense individual wealth located within the city and the fact that Los Angeles is one of the most iconic cities in the country which surely does not a public relations agent.

The most disturbing aspect of the company is the salary structure.  Every executive in this taxpayer funded company is paid in excess of $100,000 with the president earning $488,000 per year.  By comparison, President Obama makes around $400,000 a year.

Also, “as an extra irony, [the] cost is coming out of the other end of the tourism business.” Out of LA Inc.’s $19.4 million budget, “about $15.6 million of that money came directly from the public.” That money’s origins are mainly split between a share of the city’s 14 percent hotel room tax and Los Angeles World Airports. So, prices at the airport are higher as are hotel rates to advertise a city that needs no introduction.

Sadly it gets worse: “LA Inc.’s budget will soon be going up thanks to a recently approved additional 1.5 percent hotel taxMark Liberman, LA Inc.’s president and CEO, says the new dedicated tax could double the organization’s budget.” So instead cutting this useless failure of an organization, its budget might be doubled.  It is ironic that Los Angeles is using a new hotel tax to lure more tourists to the city just so they can pay more for hotels which will in turn give the city more money to advertise to tourists which in turn…I think you get the vicious expensive cycle.

This tourism budget should be funded by the companies that will benefit from the tourism not the tourists.  Raising prices on hotel rooms and flights will only discourage tourism.