With opening-day ceremonies, flowers and refreshments fast fading into memory, legislators are now confronting the significant budget shortfall resulting from rapidly shrinking revenue. If state spending continues at current levels — and it cannot, due to the state constitutional mandate for a balanced budget — the shortfall for the next two-year budget period is estimated at $1.8 billion. That's how much the legislators will have to trim state government spending.

Hawai'i is not alone. Most states face similar challenges. California is looking at a $40 billion deficit in the next year-and-a-half alone.

In Hawai'i, state and county governments must come up with ways to be more efficient and eliminate low-priority programs. That is easier to do in the private sector, but government, too, must bite the bullet this year.

Increasing taxes as an alternative to budget cutting would be counterproductive. It would further slow the economy.

California learned a painful lesson in this area. As reported in The Wall Street Journal, entrepreneurs, skilled workers and businesses are leaving that state due to high tax rates (sixth-highest in the nation) and burdensome, anti-business regulations.

New York City also learned a lesson about taxes several years ago. It raised the hotel tax. This drove away tourists, conventioneers and business travelers. When the increases were rescinded, customers came back, generating more tax revenue, job opportunities and prosperity for everyone.

When people look at Hawai'i's budget, there will almost inevitably be calls to cut state-funded tourism marketing. That would be short-sighted. I hope legislators will resist that temptation. Instead, they should keep in mind that advertising and marketing are not like other expenses that simply deplete the state treasury. Tourism marketing is an investment in jobs, tax revenue and economic well-being for everyone in these islands.

Unlike anything else that government does, money spent for advertising and marketing Hawai'i as a visitor destination actually generates jobs and taxes. Every dollar spent to attract visitors to Hawai'i brings back many more dollars to businesses of every kind. It preserves existing jobs and creates new ones. It generates tax revenues several times greater than the marketing investment. And, the last time I checked, the multiplier effect was several-fold, further boosting the return on these marketing dollars.

During times like these, there should be an increase in tourism marketing. The Legislature can do this in two ways.

First, it could unlock access to the existing $5 million emergency tourism marketing fund. The language of the bill that created that fund said it could be used in the event of an earthquake, sewage spill or other "natural" disasters. No one imagined the kind of economic disaster we are living through today. That language can be easily changed and if legislators put it at the top of their agenda, a new marketing campaign could be quickly started to capitalize on all the excellent media coverage Hawai'i enjoyed during Barack Obama's visit last month.

The second item is a little more challenging but equally important. When the Transient Accommodations Tax (hotel room tax) was established in the 1990s, 37.9 percent of the revenue generated was allocated to the Hawai'i Tourism Authority for its programs, most of which are focused on advertising and marketing as well as some vital cultural items such as hula halau, Lei Day, etc. That allocation was cut back to 35 percent in years past. To get tourism back on its feet as soon as possible, it needs to be restored to 37.9 percent.

Why inject scarce funds into tourism marketing? Because marketing is what it takes to attract visitors. During difficult economic times when fewer people are traveling, it is essential to attract a higher percentage of those who do travel in order to keep Hawai'i's most important economic engine from sputtering and "running out of gas." To switch metaphors, when the economic pie is shrinking, to "stay even" Hawai'i needs a bigger slice of the smaller pie. The only way to do this is through aggressive marketing.

I have long said, "In Hawai'i, tourism is everybody's business." Why? Because the visitor industry directly provides about 25 percent of Hawai'i's gross state product, 25 percent of its tax revenues, and 33 percent of its jobs. The degree to which our overall economic well-being depends on the health of travel and tourism stares us in the face at times like these when visitors are scarce.

Investing in the visitor industry is the fastest road to economic recovery — as fast as or faster than the proposed government capital expenditure programs around which people appear to be rallying. We need both efforts to keep people working — government projects and tourism marketing.

Richard R. Kelley, M.D., is chairman of Outrigger Enterprises Group. He wrote this commentary for The Advertiser.