Witnesses warned lawmakers Wednesday that, without transparency, local public officials serving on convention and visitors bureau boards could create incentives for improper behavior.
The comments came as the Senate Ways & Means Committee considered legislation (SB 252) making local officials' right to serve on the boards explicit.
The panel also accepted an amendment that Chairman Sen. John Eklund (R-Chardon) said allows county auditors and municipal fiscal officers to disclose, to a CVB upon request, tax return information of hotels subject to lodging tax.
Micah Derry, state director for Americans for Prosperity - Ohio, said the proposal would "worsen an already perverse set of incentives for politicians to raise taxes to reward special interests" by letting them simultaneously hold positions in government and at visitors' bureaus.
Current law doesn't prevent local officials from serving on the boards of visitors' bureaus that receive tax dollars from hotel taxes, he said. The bureaus can spend that money with little transparency, he added.
"By taking over visitors' bureaus and gaining this ability to spend money without accountability, these local politicians can then direct potentially vast sums of taxpayer money to their political allies and, in a worst case scenario, private business interests, skewing the economic playing field and incentivizing corruption and cronyism," he said.
The proposal doesn't address the problem, and instead protects it as a legal right, he said.
"I urge you to oppose this bill unless it is altered significantly, and to work toward a legislative solution to the nexus of cronyism and unaccountable spending that is enabled by our visitors' bureaus," he said.
Sen. Bill Beagle (R-Tipp City) asked if there are limitations for typical convention bureaus on what they can spend their money on.
Levies are often placed for general purposes, but oversight is often limited, Mr. Derry said.
Sen. Bob Hackett (R-London) said the legislation gives local governments more authority to place additional limitations on local bureaus.
"In some ways the bill is still giving authority to local governments to say, 'We want it to be more restricted,'" he said.
Although Mr. Derry said he believed in providing local flexibility, he said smaller communities with convention and visitors bureaus are often the ones most likely to face perverse incentives for holding both positions.
"This is purely a recognition that a conflict of interest does exist," he said.
In written testimony, Robert "Chip" Hart of Hart Productions in Cincinnati urged lawmakers to bring more transparency to visitors' bureaus.
"I urge this committee to bring about much needed change, transparency, ethics, and above all, honesty by insuring that there is access to allow for oversight of the use of tax money," he wrote. "Therefore, I reassert the request for a convention & visitors bureau to be subject to the Freedom of Information Act for the tax funding it receives when there are board members that are elected officials or their designate or members of a government administration."