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Is tourism impoverishing?


Many community leaders are jealous of the sales tax revenue and economic activity generated by tourism. They wish that their own communities had some of what Branson and other tourist towns have (the municipal revenue, the perceived business opportunities, and options for shopping, dining, entertainment and outdoor activities), but not the other stuff (the seasonal economy, the high percentage of residents who move in and move out, the number of business failures, the constant need to expand schools, the high sales taxes, the traffic snarls, the disorder of constant construction projects, etc.).

Living and working in Branson has been good for me and my family. I’ve been able to develop a law practice that is largely limited to real estate, construction, and local government issues. My wife has been able to work in a well-managed school system with nice physical facilities. Our children have been able to build on the basic public education they received in Branson and pursue higher education elsewhere. We enjoy the proximity of national forests and clean streams. We have received excellent medical care.

Still, when I try to sort out what the economic development priorities should be for Branson or any other community in the Ozarks, I’m finding that promotion of tourism is not at the top of my list. When I look around me–whether at a checkout line at the grocery store or convenience store or in the halls of the courthouse–I’m struck by the impoverished appearance of many of those I see. I think why so many?

In other parts of the Ozarks, outside the tourism centers, I don’t see so many people, poor-looking or otherwise, or quite so much activity. I wonder if less tourism is preferable to more.

When I see the massive tax-supported investment in and around Branson in roads, utilities, shopping centers, and the convention center, I wonder what the local government options should be for protecting the public’s investment in these facilities and obtaining the benefits that these projects were intended to provide. From the back of my mind, the term “sunk-cost fallacy” keeps pinging.

Our local leaders face very difficult choices regarding which facilities local governments can continue to support and how to allocate the support that is available. I admire them for rising to the challenges and volunteering their energies.

My view is that we’ve spiraled too widely in promoting tourism and chasing sales tax revenues, trying to protect the costs that we’ve sunk into tourism by taking on additional projects. The last big TIF projects (Branson Landing and the Branson Hills commercial area) seem to be to sucking revenues from retailers and others outside the TIF district and have created large continuing fixed costs in infrastructure and marketing.

We have also increased the population, first in construction workers, then in service workers, even though this kind of development appears to be impoverishing and puts us relatively behind other areas. Take a look at this tourismbrief2003 from the Missouri Department of Economic Development’s Missouri Economic Research and Information Center. This report indicates that average wages paid to tourism workers amounted to 68% of the average wages for all workers in the Springfield region (which includes Branson and the Table Rock Lake area). In other words, the larger the tourism sector in a local economy, the larger the number of poor people, many of whom come from elsewhere to take low-skill, low-wage jobs. With the population growth, we have to expand our school facilities and operating costs, and our medical providers have to treat more uninsured people.

Next, take a look at another MERIC report Target Missouri 3. That report doesn’t identify tourism as a priority and  includes this key finding:

A common practice in economic development is to craft public policies to support an economy’s “target industries”.  It is assumed by policy makers that public investments in these target industries will create economic growth and wealth for the region.  Although this development approach is supported by a segment of economic theory, oftentimes the methods used to identify target industries are simplistic and politically driven.  When targeted industries are identified using political rather than empirical justifications, development agencies run the risk of investing scare resources into groups of industries that will produce little to no economic benefits.

Our current local political leaders are not responsible for creating the situation that we’re in. As they make difficult choices during an especially difficult time, we should support them in making choices that may not seem politically expedient, if those choices are based on careful analysis.

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About Harry Styron

I'm a lawyer who lives in Branson, Missouri, whose professional interests involve real estate, construction and local government.

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