A new Colorado tourism funding proposal is being met with a cautious local reception because it pits two normally complementary interests against each other.

State Treasurer Mike Coffman last week proposed a ballot issue to divert half of the limited gaming funds now going to the State Historical Fund to tourism promotion instead.

Coffman is targeting the funding source because he believes historical preservation is being too generously financed at a time when the state is in dire financial straits.

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The diversion would produce $14 million a year to promote tourism, the state’s second-largest industry, Coffman said.

Marianne Virgili, executive director of the Glenwood Springs Chamber Resort Association, said she strongly supports more tourism promotion funding. Several proposals for boosting promotion are currently under discussion, and she’s not yet familiar enough with them to know which would be fairest and best, she said.

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She has some reservations about Coffman’s proposal.

“Historical preservation is certainly important to the whole tourism experience,” she said.

She fears Coffman could be creating “a difficult situation.”

“It’s never good to have a ballot issue that pits one group against another,” she said.

“I think that both of the issues are very critical – they’re important to each other.”

Jean Martensen, a Glenwood Springs City Council member and council’s designate on the city Historical Preservation Commission, called a 50 percent cut in the State Historical Fund “enormous.”

“It takes away from the possibility of all the towns across Colorado to do economic redevelopment work, because that’s really what it is; it takes the old buildings and enables us to renovate them.”

Coffman said that according to the Colorado Tourism Office, a recent study suggests that every dollar spent on tourism promotion translates into $50 in spending by visitors to the state. But historical preservation funding also has a multiplier effect. Its supporters say every $1 million awarded to restore a building leverages $6 million in private investment.

Martensen said studies indicate that tourists visit longer “in a community that’s full of history.”

“That means a lot to the revenue coming into the state,” she said.

Martensen also supports tourism promotion.

“I think they need to find more tourism funding, and I thought they had,” she said.

The state Legislature has approved Gov. Bill Owens’ request for $10 million in tourism funding, but that’s a one-time allocation, and Coffman wants a longer-term source of funding.

“That’s even worse, to make it longer-term,” Martensen said of his proposal.

She said she might go along with a 20 percent diversion from the historical fund for tourism promotion, but not 50 percent.

“That’s not right if we want to be a state that shows it reveres its history.”

Colorado Preservation Inc., a private, nonprofit organization, argues that a 50 percent cut would effectively eliminate the historical fund’s grant program. Since 1993, that fund has disbursed about $125 million to 2,400 projects throughout the state, including almost $400,000 to some dozen projects in Garfield County.

The remainder of the money the fund gets from limited gaming is otherwise committed, Colorado Preservation says. That includes $30 million over the next six years for upgrades at the state Capitol, and $3 million that the Legislature this year decided the fund must provide to support the Colorado Historical Society.

Coffman isn’t sympathetic. Even with the 50 percent cut, Colorado would lead the nation in historical preservation funding, he said.

“That’s how rich they are in funding.”

The state currently spends $25 million on that purpose. California spends the second-most, at $10 million.

By contrast, Colorado ranks 34th nationally in public sector spending for tourism promotion – lower than any of its neighboring states.

Colorado’s historical fund is so flush with cash that it has an unencumbered fund balance of $31 million, Coffman said. That’s more than enough to cover the Capitol restoration, while still leaving it plenty of annual revenues for grants, he said.

He argues that boosting tourism promotion would generate dollars for towns with historical sites, stimulating the economy and private investments in historical properties.

Private funding is the key to historical preservation, Coffman believes. Eighteen states have no public funding for historical preservation, and Colorado didn’t either until 1990.

The limited gaming measure changed all that. When the state’s voters were asked to allow gaming in Cripple Creek, Central City and Black Hawk, the “hook” was that a tax on casinos would fund historical preservation, Coffman said.

Almost half of gaming proceeds go to the state general fund. Twenty-eight percent goes to the State Historical Fund. Gilpin and Teller counties split another 10 percent, the three gaming communities get a total of 10 percent, and 0.2 percent already goes to the Colorado Tourism Promotion Fund.

Twenty percent of the State Historical Fund portion is given to Cripple Creek, Central City and Black Hawk for historical renovation.

When the limited gaming measure was passed, no one knew how much money would be generated, Coffman said. He said the historical fund revenues doubled from 1997 to 2002, growing from $14 million to $28 million.

Still, he’s not surprised over the outcry over his plan.

“If someone took half my money and I was swimming in it, I’d cry foul, too.”