USA: Nebraska Tourism Should Stay Independent,State Tourism Director Kathy McKillip Says.

The Nebraska Tourism Commission should stay independent despite a damning financial audit released late last month, State Tourism Director Kathy McKillip says.

Lawmakers decoupled Tourism from the state Department of Economic Development in 2012, eliminating the governor's direct control over the agency and assigning its supervision to a nine-member industry board.

The change received overwhelming support at the time, but the new state audit criticizing dozens of the commission's expenditures led Gov. Pete Ricketts, former Gov. Dave Heineman and others to publicly question the decision in recent days.

"Despite this past week, I believe it's the right move," McKillip said Friday. "We've really made some amazing strides."

Nebraska's main travel groups also defended the arrangement.

In a five-page letter Friday, the Nebraska Travel Association and the Nebraska Association of Convention and Visitors Bureaus blamed McKillip's leadership of the agency — not the commission's structure — for the problems revealed by the audit.

Those included $4.4 million in poorly documented cost overruns on contracts with the agency's main advertising firm, Bailey Lauerman, as well as various questionable expenditures that included paying $18,511 to help a staffer move 219 miles from Sidney to Kearney.

Ricketts and Heineman, who was governor when the Tourism Commission was formed in 2012, have both called for McKillip to be fired, and said putting Tourism back under Economic Development would make the entity more accountable to taxpayers.

But former Economic Development Director Cathy Lang said splitting Tourism from her agency had benefits.

"They were no longer having to compete within the agency against the other two major efforts of Economic Development," she said.

Those efforts, community and business development, tended to steal focus from tourism, Lang said, and businesses that rely on travel probably "elevated their voice" when the Tourism Commission was formed.

McKillip pointed to steady gains in Nebraska's state lodging tax revenue as a sign of success. Receipts grew 7.1 percent last year, and 8.2 percent in 2014.

Yet those increases aren't strikingly different than in years before Tourism became independent.

For example, lodging tax collections swelled by more than 10 percent in 2007, according to data from the Nebraska Department of Revenue.



Tourism can thrive under a governor's leadership as long as the governor is willing to make it a focus, said Stan Matzke, another former Economic Development director.

Matzke led the department under Gov. J. James Exon from 1971 to 1973 — boom time for Nebraska's tourism legacy. That's when visitors' centers popped at highway rest areas across the state, the Arbor Day Foundation was born and "The Good Life" became the state slogan.

Exon was key in those developments, Matzke said, as was John Rosenow, who was tourism director when he started the Arbor Day Foundation in 1972.

Matzke said McKillip should be held accountable for the Tourism Commission's recent financial issues.

McKillip has blamed growing pains for the documentation errors and questionable expenses cited in the audit, saying she and her 11 staffers weren't prepared or equipped for the diligence necessary when the commission was formed.

Lang said she can sympathize with McKillip, whom she described as a friend.

In 1998, Lang led Nebraska's Property Assessment Division when it split from the Nebraska Department of Revenue. That process was challenging, and would have been even more difficult without guidance from the Department of Administrative Services, which provides finance and purchasing assistance for state agencies.

"The Department of Tourism didn't have that same benefit," Lang said.

Tourism lost its automatic ties to Administrative Services when it became independent, leaving it up to McKillip and her team to fend for themselves.

Matzke said that's no excuse.

"Bull---t," he said. "She didn't start a new agency."

McKillip transitioned an existing Tourism team to a different leadership model, and any holes in its operations should have been obvious to an experienced director making in excess of $80,000 per year, Matzke said.

"If you don't know what you're doing, then you ought to ask people," he said. "A good leader does that."