AUGUSTA – It may say Vacationland on the license plate, but Maine spends less on tourism to draw visitors with disposable incomes than Massachusetts and most other states with tourism-driven economies.

National rankings of state tourism budgets show Maine ranks 32nd in amount spent to lure tourists, up from 45th just a few years ago, according to industry numbers. And those who watch the tourism industry in Maine say it’s time to start taking the state’s tourism economy more seriously.

The state has increased its tourism budget from about $2 million annually to $7 million. That is still a fraction of what is spent in other states.

Hawaii, the nation’s leader in tourism spending, spends $56 million a year, and Massachusetts spends about $10 million, according to recent data from the Travel Industry Association of America.

“It’s nice to be able to think we don’t have to market, but that is not exactly true. It’s a very competitive market for the tourism dollar,” said Peter Thompson, president and chief executive officer of the Kennebec Valley Chamber of Commerce.

Tourism brings in more money to the state than any other industry: $377 million in tax revenue from visitors and $9.5 billion in the sales of goods and services in 2002, according to the Office of Tourism.

But while some say the state is not doing enough, others argue that Maine has made significant progress in recent years.

Vaughn Stinson, executive director of the Maine Tourism Association, said his group worked hard to get a state law passed to create a dedicated source of funding for the state Office of Tourism.

The law gives the office a portion of meals and lodging tax receipts.

“What happened in the past was we lost market share for almost five years running until we got this tourism budget stabilized,” he said. “If it would have kept on the way it was, we would have found ourselves very soon having another industry in dire straits in Maine.”

In Maine, that international competition comes from New Brunswick and Nova Scotia. Each spends more than $7 million a year trying to get tourists to visit, providing competition for Maine, Stinson said.

The state recently has begun working with Canada on package deals, encouraging travelers to spend time in both countries. In particular, New Brunswick and Nova Scotia are working with Maine on what are called “two-nation vacations.”

In his State of the State speech last January, Gov. John Baldacci announced a plan to direct the University of Maine to create a Center for Tourism that would conduct research and start a hospitality management program.

While Baldacci noted that tourism is 15 percent of the gross state product, it has not been feasible for the state to spend more money selling Maine to others, said Lee Umphrey, a spokesman for the governor.

“Given our current financial situation, we need to balance competing needs,” he said. “Think of Vermont, and how they make making cheese and maple syrup into a destination.”