California Fairs Generated $165 Million in 2011 Tax Revenue, Trade Group Reports

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Western Fairs Association to Seek Legislation to Ensure Ongoing Benefits for Government, Economy & Network of California Fairs

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Fairs are an entirely different animal than any other state-funded enterprise because we more than pay for ourselves.

California’s network of fairs today announced plans to introduce legislation that will allow them to continue generating jobs and millions of dollars in tax revenue for state and local governments, according to the Western Fairs Association (WFA).

Based on a sampling of performance at fairs statewide, WFA reported that 2011 was as a banner year with record attendance and a $165-million tax contribution to state and local governments. Yet the future success of California fairs and related revenue benefits are in jeopardy because state fair funding is slated for a total elimination.

As of January 1, California’s network of 78 fairs will see its annual state allocation of $32 million cut to zero, according to WFA. That $32 million has traditionally functioned as seed money that kick starts annual operations. Citing California Department of Food & Agriculture statistics, WFA officials said that cutting that support could result in a significant reduction of the following economic benefits to the state:

  •     $2.65 billion in total economic impact to California;
  •     30,000 jobs;
  •     $66 million in states sales tax;
  •     $99 million in sales taxes for cities and counties.

“We are working with legislators who understand the absurdity of killing a goose that lays golden eggs for government,” said Stephen Chambers, executive director for WFA. “Fairs are an entirely different animal than any other state funded enterprise because we more than pay for ourselves. Seed money for fairs results in a 5-to-1 return on investment.”

Chambers noted that despite California’s deep recession, fairs proved a source of economic growth and stability for the state.

“Fairs outperformed such other major entertainment venues as movie theaters and theme parks,” he said. “There’s an endless list of reasons to preserve fairs.”

According to WFA:

  •     Total annual attendance to fairgrounds was more than 30 million – almost matching the state’s entire population;
  •     While there have been cuts to fair-related jobs, the industry still employs an estimated 30,000 Californians who work as fair staff, vendors or in related businesses;
  •     Volunteer and social services provided at the fairgrounds were believed to be at an all time high in many communities. For example, in Fresno, a food drive for the needy set a national record for single-day contributions;
  •     Attendance just during the 2011 fair season rose to an estimated 14 million – about a 6 percent increase from the previous year.

Fair officials said the decision to eliminate state funding could very well cost the state far more than it would be saving and send more Californians into the unemployment lines.

“Our industry is being financially responsible and have positioned ourselves to weather the storm,” said Sandy Woods, the CEO for the Nevada County Fairgrounds. “But the reality is that the elimination of state funding creates a very precarious financial basis for the fair industry and has potentially serious ramifications to California’s economy.”

WFA has been exploring ways to either reinstate some level of funding or develop a transition plan to ensure fairgrounds can remain on solid footing, Chambers said. While the lost revenue is measurable, there exists an unknown cost to taxpayers associated with shutting down fairgrounds.

“There was very little, if any, thought given to the consequences of these cuts and what they truly mean,” said Chambers, who noted that “the cost of closure alone could reach into the millions of dollars necessary to cover insurance, security, employee transition costs and utilities.”

Said Chambers: “I don’t think anyone wants to eliminate a growing source of tax revenue, job stability or community centers that are critical to public safety during emergencies and are hubs for volunteer activity that assists those suffering from cuts in social services.”

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