Infrastructure Prioritization

Is Your Investment in Tourism Paying Off? Analyze the Impact.

By December 17, 2021 December 21st, 2021 No Comments

Since its launch in 1993, Kansas sales tax and revenue bonds (STAR) have unlocked more than $1 billion in economic development financing. Each attraction financed through the program aims to bring job creation and improved quality of life to Kansas residents, yet the program’s primary goal is to create new spending in the Kansas economy by attracting tourists.

The Kansas Department of Commerce is responsible for selecting STAR bond attractions and districts, largely based on their feasibility to bring new tourism to the state. 

However, the department lacks sufficient before-and-after data or consistent processes to evaluate if such attractions are actually boosting tourism. Without this information, it’s difficult to accurately determine if certain attractions will bring in the necessary revenues to pay off their bonds — and with billions of dollars at play, this absence of data could put Kansas’ economic welfare at risk.

To get a deeper understanding of the impact STAR bond attractions have on state tourism, the Kansas Legislative Division of Post Audit (LPA) conducted a performance audit of visitation data at 16 sites. With the help of StreetLight Data, LPA uncovered surprising insights on the efficacy of the attractions, and gained an in-depth understanding of how data-driven auditing can optimize the STAR bond program.

Tapping Into Tourism Trends

While the Department of Commerce received visitation projections of each selected STAR attraction amid feasibility assessments, it did not have the authority to require ongoing visitation data from attractions until 2021. As a result, LPA did not have access to any comprehensive or reliable visitation data to support its audit of the state’s completed STAR sites — leaving StreetLight to help fill in the gaps.

Using StreetLight’s Origin-Destination Metrics, LPA discovered that only three of the 16 evaluated attractions met the Department of Commerce’s tourism-related goals in 2018 and/or 2019. Interestingly, these three attractions — the Kansas Speedway, Topeka’s Heartland Park and the Hutchinson Underground Salt Museum — all shared one commonality: Unlike other STAR sites, these are unique attractions that are not otherwise available in the region. 

With this data, LPA could identify a core problem with the state’s STAR attraction program: Officials may not be financing the right types of attractions for their intended goals. While some attractions like children’s parks or retail centers can improve local quality of life, the data shows they don’t necessarily draw in the intended audience of out-of-state-visitors, hindering the site’s ability to generate new revenue for the state. 

Learning Hard Lessons With Hard Data

While the availability of travel data has exploded since the STAR bonds financing program was introduced, Kansas officials have not taken advantage of it to measure the impact of their investments — which is a common problem among government-funded investments. Using data to practice consistent, widespread before-and-after studies is becoming increasingly critical to measure goals and optimize spending, as LPA demonstrated in its audit.

To encourage this practice among officials, LPA drafted key recommendations to help the state better monitor the STAR bonds program. Such recommendations suggested the Department of Commerce collects consistent, comprehensive visitation data from STAR bond sites, and the Kansas Legislature considers amending the program’s goals to ensure attractions are generating the intended revenues. 

The Department of Commerce questioned the methodologies and nuances of LPA and StreetLight’s assessment in response to these recommendations, though it did acknowledge the need for more comprehensive data and transparency within the STAR bonds program. Such data will soon be required under SB 124, signed into law by Kansas Gov. Kelly in April 2021. 

Until then, LPA’s study remains a key lesson in the importance of data-driven decisions that are not based on optimistic projections or assumptions. It’s also a reminder for governments and agencies to remain consistent in their data assessments as time passes. By collecting and sharing relevant data, it’s possible to get ahead of challenges or reallocate resources to protect investments and economic prosperity. And when we replace our existing beliefs or political pressures with reliable data, we can unlock the opportunities that are proven to create a more prosperous economy.

We invite you to download the STAR Bond case study for additional detail or listen to the podcast debrief STAR Bond Financing: Is It Working?