This article originally appeared in the January 22, 2003 Gongwer News Service. Copyright 2003, Gongwer News Service. All rights reserved.
The state could save some $34 million of its total budget by pruning out what the Mackinac Center for Public Policy has labeled as extraneous programs. Part of those savings is elimination of the state fairs, which the group said could bring in another $59 million through sale of the fairgrounds.
The release is a taste of a study the group plans to release the first week in March that will outline about $1 billion in total budget savings.
Michael LaFaive, author of the study, acknowledged that only about $5.1 million of the cuts would affect the general fund, but he said all of the cuts in the end would positively affect the wallets of Michigan residents.
State Budget Office spokesperson Greg Bird said the office is reviewing the proposals, but was not ready to commit to any particular cuts at this point.
"While some of these are certainly good suggestions, some of the suggestions made here will have no impact on our general fund dollars," he said, noting that the projected deficit is the key priority. "We're in the process of examining the essentials here in state government to make sure the essential services the people of state of Michigan need will continue."
Mr. Bird also noted that, while money from the sale of the fairgrounds would be a boon to the current budget, it would be a one-time revenue source, which the administration is trying to avoid.
And Keith Creagh with the Department of Agriculture noted that much of the money the Mackinac Center targeted, particularly the fairs, is not truly a savings because the money is brought into the state specifically for the purpose for which it is used. "If you don't run the State Fair and the U.P. State Fair, that's not really a savings," he said. "It's money in and money out."
Mr. LaFaive said the goal of the proposals was not only to help cure the projected deficit, but to trim state spending in areas where state intervention was not needed. "Our studies are going beyond simply balancing the budget to returning the state to doing just what it should," he said.
He argued that the state fairs-the State Fair in Detroit and the Upper Peninsula State Fair in Escanaba-could be run as effectively by a private investor without the costs to the state. "We know that companies exist for the purposes of managing other fairs," he said, adding, "The nature of entertainment has changed to degree that fairs are less popular."
Dropping the fairs would also drop $6.3 million from the state budget, all restricted revenue. And Mr. LaFaive said that could be increased to $20 million, still restricted funds, by eliminating all state involvement in local and county fairs.
Among the first general fund cuts in the report is $39,500 ($63,300 gross) from eliminating the Commission of Agriculture and the Marketing and Bargaining Board as well as the two state fair boards. The report argued that the department should, as most others are, be led by a gubernatorially-appointed director, not a board.
The Marketing and Bargaining Board, which oversees negotiations between food growers and handlers, could have its role passed back to farmers, the report said.
That same move with oversight operations for equine drug testing and seed quality could net the state another $1 million, the report said. Some $97,000 of the seed program comes from general funds.
Mr. Creagh argued that the seed testing program was an appropriate role for the state. "If you want to have trade with Mexico, you need to have a testing protocol approved by a state agency," he said.
The Agricultural Development Office also could be eliminated and its programs passed back to the private sector, the report said. Eliminating all market development operations, including the office, would cut $3.5 million, with $2.5 million of that general fund. "Private industry has its own incentives for adding value to agricultural products," Mr. LaFaive said.
One line Mr. LaFaive expected would be cut form the coming budget was the Southwest Michigan Tourist Council. The $60,400 line provides the council with funds to pass out Michigan agriculture products at the New Buffalo Welcome Center.
"If this is a good program, then local farmers should be willing to pay for this program themselves," Mr. LaFaive said. "I wonder how many people come back and do business with Michigan agriculture when they've got Indiana and Ohio agriculture at their disposal?"