Tourism generates nearly $10 billion annually for Colorado, and for every dollar the state spends promoting itself, it receives $6 to $13 in return, studies have shown.

But as Colorado legislators look at closing a $604 million projected budget shortfall this year, and figure out next year's shaky financial picture, they face a quandary:

Do they keep putting nearly $20 million into tourism promotion while cutting other services, like health care?

Or do they cut the tourism budget and possibly jeopardize the funding stream that could help save those services?

"Is it wise to completely eliminate it? Probably not, because we do get some bang for our buck," said Sen. Moe Keller, a Wheat Ridge Democrat and chairwoman of the Joint Budget Committee. "But when you look at our core functions of government, is tourism funding one of them? Probably not."

Under state law, the legislature gives some $19.6 million in limited-gaming fund revenues to the Colorado Tourism Office each year as long as the general fund budget grows by 6 percent.

Most of that goes to ads in publications outside the state, vacation guides and the recently revamped colorado.com site, said Matt Cheroutes, Office of Economic Development and International Trade spokesman.

But with sales and income tax revenues continuing to decline, the general fund budget is not expected to come close to its 6 percent limit next year, and the legislature is not obligated to fund tourism.

So, a debate has begun on how much of the state's limited resources should be funneled to tourism.

The state slashed tourism funding once before, from 1993-98. During that period, Colorado's share of the national overnight visits fell by one-third, from 2.7 percent of the market to 1.8 percent, said Sen. Al White, R-Hayden.

Tourism is now the second- highest employment sector in the state, with 143,000 jobs, Cheroutes said. Overnight visitors contribute $9.8 billion a year, he said.

Two-thirds of the state's tourism expenditures are targeted at spring and summer travel. Funding cuts would not hurt behemoth ski resorts as much as small hotels and restaurants around places like Rocky Mountain National Park, Cheroutes said.

Rep. Christine Scanlan, D-Dillon, reasoned then that if putting money into tourism can create more tax revenue and jobs, it would be "penny-wise and pound-foolish" to cut those dollars.

"That's why we really have to prioritize in this state," added Rep. Don Marostica, R-Loveland. "If tourism is highly leveraged, like lending money to small business, it may end up on the top side of that list."

But as JBC members await a Thursday report from Gov. Bill Ritter with suggested spending cuts over the next six months, several say it won't be easy to cut something like health care while funding marketing.

Rep. Mark Ferrandino, D-Denver, said he wants to find out if people are going to continue traveling as the recession deepens. If not, tourism dollars have to be considered for cutting, he said.

"It's a tough decision to make. We need to talk as an entire General Assembly about what our priorities are," he said. "It's an industry we want to make sure we're investing in. . . . But it's definitely not off the table."

SealoverE@RockyMountainNews.com or 303-954-5438