Fair Enough? Does Fair Funding Make Sense?

County fairs in California are in jeopardy on a wide basis because of proposed budget cuts that would eliminate state subsidies for the events, says the California Fairs Alliance (CFA). The group estimates that as many as 29 fairs could hit the rocks without state underwriting to the California fair network.

By the CFA's estimate, the state would give up $126 million in annual direct tax income generated by fair receipts, said Stephen Chambers of the California Fairs Alliance (CFA).

“That represents nearly a four-to-one return on the state’s overall $32 million investment," he specified. "In this light, the budget plan actually dries up an income stream that flows to the state from California fairs."

Along with a potential net income loss, the proposal could drive 29 fairs - including dozens of primarily rural fairs - completely out of business. This would result in a major economic ripple effect by killing jobs and related economic activities, according to CFA, which today also released the list of the 29 at-risk fairs and the formula for determining their status.

“Fair funding is seed money that creates a foundation from which the fairs are able to build up their true economic impact. While larger fairs may no longer need the platform provided by the funding, the majority of small and medium fairs do,” said Chambers. “If you destroy this foundation, the whole network is disrupted. If the ‘fair return’ to the state in tax revenue is reduced by just 30 percent, this aspect of the Governor’s budget proposal will bleed red ink from the General Fund.”

CFA noted that the financial impact of California fairgrounds is well documented by the state of California, which recently issued a report, California Fairs: Statewide Economic Impacts, which found its economic contributions to be significant, including: $2.8 billion in consumer spending, $855 million in income, 25,000 full-time jobs and $126 million in state and local taxes.

Having grown up going to the county fair and at odd times even competing in 4-H events, it's hard to argue against the All American nature of the events. But what never quite figures into the equation is the effect that fairs have on local economies. I live just outside of Jackson, Mississippi, which hosts the Mississippi State Fair. More than once, I've walked into nearly-deserted restaurants on Friday and Saturday nights during fair week. A state fair does fill up some hotel rooms, but the same can't be said for most county fairs, which are far more localized.

Local fairs do provide fund-raising opportunities for local groups, but money spent on carnival rides and similar attractions mostly flows out of the county when the operator breaks down the equipment and drives off to the next event.

Good fairs certainly have an educational component for city folks, and even CFA notes that, absent proposed cuts, the fair network appears healthy, with a strong 2010 season with an overall growth in attendance and revenue. Budgets for the 2011 season are approved and funded, and industry leaders expect another successful fair season.

And CFA is encouraging state leaders for formulate "a more thoughtful plan" for funding.