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A proposal in the Arizona House of Representatives could restore some lost funding to the Arizona Office of Tourism.

As legislators look to close a $3.5 billion state budget deficit, they have cut the budgets of a number of departments, including the Arizona Office of Tourism.

As part of the state budget just approved by legislators, the transaction privilege tax formula funding for the Tourism Office was removed. TPT money comes from bed, restaurant and amusement taxes collected from businesses across the state. Those funds totaled about $14.6 million in fiscal 2010, and legislators appropriated $10.7 million of it to the Tourism Office through the TPT formula.

But the fiscal 2011 budget removed that funding from the Tourism Office completely, eliminating the formula and earmarking all TPT funds for the General Fund instead.

Under the new state budget, the department’s funding will come only from a portion of Indian gaming fees and revenue collected under Proposition 302, a voter-approved 1 percent bed and 3.25 percent car rental tax in Maricopa County — money the office has received in prior years. While the amount fluctuates based on sales receipts, it is estimated at about $12.6 million for fiscal 2011, according to state budget documents.

By comparison, the fiscal 2010 budget totaled $22 million including the TPT funding.

The bill now being considered by state lawmakers would reinstate the TPT formula. The measure, House Bill 2243, is sponsored by Rep. Michele Reagan, R-Scottsdale. Reagan was not available for comment.

The bill would set the stage for legislators to revive the Tourism Office budget with those TPT monies at a later date, said House Republican Majority spokesman Paul Boyer.

“Even though AZOT won’t be funded (through TPT), this will put that formula back into Arizona statute,” he said.

Kristen Jarnagin, spokeswoman for the Arizona Hotel and Lodging Association, said the bill is important because the TPT formula is “the foundation of tourism funding. If the state needs to do other things with that money during tough times, we understand. We want to be supportive, but the Arizona Office of Tourism needs to have that funding renewed — and the sooner, the better,” she said.

The bill is making its way through the state House of Representatives and has passed the Appropriations and Rules committees. Still, the measure must make it through the caucus and be approved formally by the House of Representatives, then move on to the Senate for consideration. If it passes all of those steps, it would go to Gov. Jan Brewer for signature.

The Arizona Office of Tourism declined to comment.

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