Co-op and unco-op advertisign

New Mexico Business Journal, August, 1998 by James Covell

Earlier this year the Legislature appropriated funds for the state's economic development and tourism promotion program. Tourism got $1 million for cooperative advertising. The Economic Development Department got $150,000. How come so much disparity? Is economic development only 15 percent as good as tourism? Obviously, something is amiss. The answer partially lies in the ability to mobilize local forces and a better organized constituency with more leadership.

The governor's instruction to his various departments was not to seek budget increases. Last year the economic development co-op advertising program was $150,000, and the tourism program was $375,000. The departments were instructed to go to the Legislature with a "hold the line budget." It seems that the tourism constituency - the hotels, motels, restaurants, ski resorts, marina operators, etc. - wisely chose to ignore the governor and lobby the Legislature for a major increase in funding. Their argument was that the state was not getting its share of increased tourism spending and in fact may have even been slowing down.

They pointed to the Colorado example where the state substantially reduced its tourism promotion program and the number of visitors to the state fell off sharply. While perhaps not publicly expressed, it was apparent that Tourism Secretary John Garcia was enthusiastic about the increased promotion budget. Over on the economic development side the word from EDD was the Department was not going against the governor's budget, nor was there even much suggestion that maybe the economic developers at the local level should foment a grass roots campaign, which, of course, they didn't.

Now you can't really fault the Economic Development secretary. After all, he was in the throes of negotiating for a new out-of- state job, so why would he care? Local economic developers showed very little interest and no organized effort. The net result was the Tourism Department got $2.9 million for promotion including the $1 million for co-op advertising and the Economic Development Cooperative Ad Program got its usual pittance.

And the die was cast. The two departments were charged with obtaining proposals from the local communities for cooperative funding. The Tourism Department got their proposals to the various eligible promotion groups during the latter part of May. The applications were due in about 30 days. Meanwhile, the Economic Development Department sat on its pittance and in spite of several inquiries from local economic developers, gave no indication of how it proposed to handle the cooperative advertising program for 1998 and 1999.

Finally, with less than a week's notice, the EDD sent a fax to eligible economic development groups announcing two pre-proposal local conferences - one for June 10 in Alamogordo and June 11 in Santa Fe. These pre-proposal conferences were mandatory for anyone seeking cooperative advertising funds. Furthermore, the closing date for RFPs was set for Friday, June 19, giving local communities 8 days in which to put their proposals together. I reviewed the Rio Grande Market Alliance's application for last year. Its proposal for 1997 and 1998, which was awarded $10,000, was 58 pages long. It would appear from looking at some other communities' proposals this may be typical. This means a lot of midnight oil was burned all over New Mexico to get a proposal completed in a week.

This recounting leads to two questions: Why did the Economic Development Department sit on the economic development appropriation until the first week of June? Why were there only two meetings on very short notice? In fact, yours truly never even got a notice but found out about the meeting from an unrelated discussion with an economic developer. The money was appropriated in February. Everyone knew the program was coming. The RFP sent out by the department is virtually identical to the one used last year. How long does it take to decide to send out the same material?

Last year, requests for cooperative advertising awards submitted by the various communities around the state totaled $435,000. Communities are eager to have more money to spend on advertising and promotion, so why didn't the local economic developers urge their legislators to increase the program in spite of the governor's "stand-pat budget?" It should be apparent from the reception that tourism got that communities could get a bigger economic development promotion budget without a great deal of lobbying. San Antonio, Texas, has a bigger economic development promotion budget than all of the state of New Mexico's communities combined.

A few places in New Mexico like Rio Rancho and Las Cruces are doing very well. They can probably continue to grow and attract new jobs without cooperative advertising awards. Other communities such as Roswell, Raton and for that matter almost all of rural New Mexico could benefit from additional promotion. Maybe it's time for economic development to get its act together and seek a better share of future cooperative advertising appropriations.