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Fairs are as American as baseball and apple pie: They conjure up wholesome images of happy children and prize-winning livestock as well as corny memories of Pat Boone and Ann-Margret singing, "Our State Fair Is a Great State Fair." The state of Michigan has a long and proud tradition of conducting fairs. It not only hosted the nation's first state fair in 1849, it did so just 12 years after becoming a state.
Unfortunately, today fairs across Michigan are on the dole. The state provides direct subsidies to two fairs while paying "premiums," or money for prize-winning fair participants, to others. The popularity of Michigan's fairs suggests that this venerable Great Lakes tradition can operate without government assistanceand it should.
Michigan's state fair has an interesting history. From its inception, it was held in a different city each year and included stops in Ann Arbor, Kalamazoo, Adrian, Jackson, Grand Rapids, and Pontiac. In 1905, Joseph Hudson of Hudson Department Stores sold 135 acres to the Michigan State Agricultural Society for one dollar for what would become the state fairgrounds. The Michigan State Agricultural Society was part of state government in 1849 and received a $400 subsidy in its first year of operation. In 1921 the state of Michigan took total control of the existing fair and an additional 72 acres. Official responsibility for the state fair then switched from various government departments several times before the Michigan Department of Agriculture became the fair's controlling authority in 1997.
That same year, the state fair was experiencing rough times. It was attracting a paltry 163,000 visitors and its revenues could not cover its outlays. It turned to state government for a cash infusion and got itwith one qualification: The state would grant the fair $2 million, but only as a one-time subsidy. The fair would not receive any more state general fund/general purpose monies again.
Unfortunately since that time, the state fair has gone without a subsidy only one yearin 1996. In fiscal year 1998-99, the fair received $707,100 in supplemental funding from the state's general fund/general purpose budget. In fiscal year 1997-1998, it received an $885,000 transfer from the Consumer and Industry Services budget. Clearly, the deal struck in 1994 between state government and the state fair was a loose one.
The good news is that the state fair has seen its annual attendance climb 67% since 1994. In 1998 paid fair attendance topped 370,000. Total attendance was between 450,000 and 500,000. The fair operates year-round and in 1998 pulled in $6.7 million in revenue. This increased attendance and concurrent increase in gate receipts is largely a result of the fairs efforts to supply more safe,
family entertainment. This includes concerts, "extreme wrestling," dog shows and a new, "portable" ice-arena. Fair officials believe that 1999 could see $7 million in revenue. Perhaps it was this potential for growth and improvement that led Department of Management and Budget officials to recommend the state fair as a candidate for privatization in 1992.
The state of Michigan also involves itself with Michigan's 90 county fairs through the new "Fairs and Exhibitions Division" of the Department of Agriculture. The division is responsible for "oversight and coordination of the Upper Peninsula State Fair, the Michigan State Fair, and county and local fairs." Other ways state government supports fairs in Michigan include the following:
Additional subsidies. The state continues to directly subsidize the Upper Peninsula Fair. The state subsidies for the previous three fiscal years were $163,300, $469,000, and $232,300. While it is true that the Upper Peninsula State fair is an enjoyable event for many people each summer, sponsoring it with tax dollars is not a proper function of government in civil society. The Upper Peninsula is blessed with enough natural wonders, sporting events, and privately held festivals to entertain Michigan citizens without the help of state government.
State premiums. The state provides "premiums" to every fair in Michigan. Premiums are generally used as award monies to children who win prizes for such things as raising the best livestock, having the best crafts, or winning the "antique tractor pull"to name a few. The largest 1997 state premium, $199,422, went to the Michigan State Exposition & Fairgrounds. The smallest, $543 was distributed to the Roscommon County Fair Board.
In 1997, the state appropriation for premiums exceeded $1 million. It should be noted that in 1997 and 1998 the premiums were paid for by cross-subsidizing fairs with revenue raised by the state through horse racing fees. In 1996, the entire $1.1 million in premium money was taken from the state's general fund/general purpose budget.
Fair infrastructure. The state also provides "building and track" improvement money to fairs with horse racing venues. The 1998, 1997, and 1996 contributions from the state were $850,000, $850,000 and $627,700, respectively. This money also came from horse raising revenue.
Entertainment, in any one of its many forms, is not a proper function of government. Fairs have long been a staple of life in America. Over the years, fairs have come to depend on the generosity of state government to pay part of their bills. They should not. If there is demand enough for these summer festivals, the people who value them the most will fund them voluntarily.
