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A recent report of the State Auditor’s Office brought to light a number of serious issues with the State Tourism Commission. Egregious spending and irresponsible use of taxpayer dollars is unacceptable at any level of government. A lack of sufficient oversight over administrative processes and spending facilitated the mismanagement at the Tourism Commission. A clear chain of command and accountability for use of all tax dollars is essential to prevent a similar situation from happening again.
The Tourism Commission operates independently of any oversight by the Legislature or the Executive Branch. In 2012, LB 1053 removed the Travel and Tourism Division from the Department of Economic Development, making it a stand alone commission managed by commissioners appointed by the Governor. The model is not without precedent. The Game and Parks Commission operates in much the same manner. Both agencies are funded primarily by Cash Funds. In contrast to General Funds obtained from sales and incomes tax receipts, Cash Funds are restricted pots of money derived from specific fees and statutorily required to fund specific functions. Game and Parks Cash Funds include hunting and fishing license fees, park entrance fees, and the like. The Tourism Commission is funded primarily by the lodging tax, which is 1% of gross receipts from hotel and motel stays.
Oversight is a complicated balance. A bureaucracy can be burdensome and inefficient, not utilizing your dollars to the best possible ends. Oversight committees can be abused as a means of achieving political objectives. On the other hand, the Tourism Commission debacle exemplifies how quickly an agency can abuse the public trust without adequate checks and balances on its operation.
The solution lies in absolute transparency and clear accountability. Taxpayers must be able to readily see how their dollars are being spent. Contracts with private entities can obscure the nature of spending and keep egregious expenses from public view. Cash Funded agencies are a unique challenge, as the Legislature only grants authority to use Cash Funds. Agencies funded by these specific fees can feel “ownership” of those funds, without recognition that they are still taxpayer dollars regardless of what name is given to the fees. Careful examination of Cash Fund spending is vital to ensuring fees are not set too high, taking more money than needed from taxpayers. Spending justifications for Cash Funds should be equally as scrutinized as spending from the General Fund.
Accountability is the second vital component. Independent commissions have no responsibility to an elected, accountable authority. Appointed commissioners have subject expertise that is vital to effective management, but must still have a clear chain of command to either the Legislative or Executive branches. Removing Tourism from Economic Development severed that accountability. Similar questions of legislative accountability have recently arisen regarding the reconfigured Natural Resources Commission. Appointed Commissioners should have a clear sight of the taxpayer, and taxpayers must have a mechanism to hold those who spend their dollars responsible.
Tourism is the third largest industry in Nebraska. Strategic investment in developing Nebraska’s tourism sector will yield strong returns for our state. Public confidence in government is maintained through transparent, accountable management of the resources entrusted by the people. Although unfortunate, the Tourism Commission audit provides valuable lessons to prevent a repeat of similar mistakes.