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Tourism is Maine's largest industry. But its contribution to the economy has shrunk by billions of dollars and thousands of jobs based on a new computer model being used to calculate the impact.

A new way of calculating the industry's economic impact has sliced billions of dollars and thousands of jobs off the totals. People who make their living in the travel and hospitality business aren't happy about the new math.

In 2004, tourism generated $13.6 billion in sales, 176,600 jobs and $531 million in state and local taxes, according to previous State Planning Office estimates. Such numbers are frequently held up to underscore the importance of tourism to the state's economy.

Now, the Planning Office says those figures were inflated, in part by including spending by Maine residents who took day trips around the state. The office has lowered the estimates to $8.9 billion in sales, 132,000 jobs and $376 million in taxes.

"I'm angry," said Vaughn Stinson, chief executive officer of the Maine Tourism Association, the trade group that represents many of the state's hospitality businesses. "I live by those numbers, one way or another."

Under the new economic formula, the industry's impact grew in 2006, the most recent year for which data is available. It generated $10.06 billion in sales, 140,000 jobs and $429 million in taxes -- far less than what would have been calculated with the previous methods.

Stinson and others are worried about the new formula because they believe it could lead to cuts in spending for Maine tourism promotion.

The Legislature funnels 5 percent of the meals and lodging taxes to tourism promotion and advertising. That amounts to more than $8 million in this fiscal year.

If tourism promotion doesn't appear to be generating as much bang for the buck as previously thought, Stinson said, lawmakers could be less supportive of continued funding. His concern is heightened by the state's budget shortfall.

"I'm always trying to explain to the Legislature and the public that this fund generates a certain amount of revenue and jobs," Stinson said.

The outlook for tourism in 2008 is hazy.

Hotel owners reported a positive year in 2007, thanks largely to fair summer and fall weather. This winter's early snow got 2008 off to a fast start, and many innkeepers are optimistic. But the economic downturn and mounting fears of a recession are creating uncertainty for the summer, when most spending by visitors occurs.

Underlying the new economic calculations is a different way of looking at day trips taken by Maine residents.

In calculating the economic impact of tourism, the Planning Office uses data collected by Longwoods International, a Canadian research firm that conducts an annual visitor study for the state.

In past years, the Planning Office included estimates for in-state day trips. The thinking was that a Portland family that skied for a day at Sunday River, had a meal and bought gasoline, for example, contributed to the local tourism economy. If the family hadn't gone skiing in Maine, the assumption went, it would have spent the same money on out-of-state travel.

Stinson and others still see that as an accurate way to represent how residents traveling around the state benefit hospitality businesses. But their logic has been challenged, and overruled.

"That's a very big stretch," said Catherine Reilly, Maine's state economist.

Reilly came to the job in 2005. She found that the economic modeling used previously by the Planning Office was developed in-house more 20 years ago. Reilly wanted to update the model and settled on a method used by the U.S. Bureau of Economic Analysis to compute multiple effects of spending.

With the more conservative assumptions, if that Portland family didn't take a day trip to Sunday River, it would be just as likely to spend equivalent dollars closer to home, in other sectors of Maine's economy. Day trips by residents, Reilly decided, don't really contribute to a net gain in tourism...