Tuesday, October 11, 2016

Mississippi State Fair: Where is the money?

Bright lights and the smell of "Fair Food" draw thousands to the Mississippi State Fair every year.  However, reporter Mollie Bryant dared ask a question that is seldom answered in this fair state: Does the fair actually make money for the government?"  The Fair Commission leases the fairgrounds, provides security, and promotes the fair but does the Commission actually earn a profit from the fair?  Ms. Bryant reported in the Clarion-Ledger:

Does the Fair Commission actually make money off of the Mississippi State Fair? No one can answer that question thanks to flaws in the Fair Commission's accounting system.

The Fair Commission is a subdivision of the Mississippi Department of Agriculture and Commerce.  A 2009 PEER report and information obtained through a public records requests show that the Commission does not track its expenses by event or facility.  It is literally impossible to determine if the fair is breaking even, losing money, or making a profit.

“We do track the expenses for the fairground, including the fair,” MDAC spokeswoman Paige Manning said. “We don’t have itemized expenses per event. We’re looking at the financial stability of the fairgrounds as a whole.”

However, the PEER Committee argued in a 2009 report  that without knowing gains or losses for each event, the commission can’t maximize its profits by playing to its strengths.   PEER said the Commission could use that information to replace unsuccessful events with profitable ones. 

Rick Reno, the commission’s executive director, did not return a request for comment.

 The Clarion-Ledger asked the Commission to provide the amount of revenue from the fair but received no response. The newspaper filed a public records request in September for the fair's revenue and expenses from 2011 to 2015.  Special Assistant Attorney General Bob Graves stated in an emailed response that the Commission had no documents with the requested information. "Actually, they don’t have the expense figures anywhere,” he wrote.

 However, the Commission did provide the Clarion-Ledger with its budget for the past five years.  The budgets state that the fair gross revenue ranged from $2.5 million to $2.7 million from 2011 to 2014.  The 2015 budget did not state actual fair revenue since it combined the revenue with rental income.  The gross revenue does not include fair expenses.  Thus it is impossible to determine what the actual net profit or loss is from the fair.

“What we gave you is what we have,” Manning said. “At this time, this is all the information we can provide.”
Manning and the PEER report pointed out that the Commission’s accounting system meets state requirements. However, yhe report added that the commission can’t improve profitability if it can't determine the actual profit of individual events and venues.

PEER planned to examine the profitability of the commission’s major events and facilities, but the committee hit a wall when it found the available records wouldn’t actually show the profitability for each venue and event. 

“While the financial information for such analysis is present in the Commission’s records, the information is scattered and buried throughout the Commission’s financial system in the form of raw data (i.e. invoices, contracts, receipts),” the report said.

The report also said the accounting system for the fair also doesn’t itemize revenue by admissions, parking, vendor fees, or other categories. That means it isn’t possible to analyze revenue changes from year to year or how decisions like increasing vendor fees affected fair income.

Kingfish note: The accounting system in place is exactly what the Commissioners want.  Do you think that Jim Buck Ross wanted anyone to see whether the Ag Museum actually made money? Do you think Lester Spell was any better? Please.


Anonymous said...

Unbelievable. Perfect example of why government does a lousy job of running things like this that could be done by the private sector.

Anonymous said...

Yes - and no 9:00. The government does a lousy job of running things when they don't want to know the answer, or have no real benefit in knowing. The Commissioner, not this one, or the last one, or the one for life before (JBR) had any desire to know because their pet projects wouldn't ever make it past start, much less collecting $200.

And as big a believer as I am in letting the private sector do anything in its purvue rather than the government do it, I can't imagine a private sector entity that could put on something like the state fair, if for no other reason than the ownership cost of the real estate and facilities to be used once a year.

If decent accounting systems were established, I wouldn't be surprised to learn that the fair might actually 'make money', as would the Dixie National. But many of the other activities under the Commission's control probably wouldn't come close.

Anonymous said...

Sorry guys one of the best State Fairs is private. The South Carolina State Fair, not one ounce of state involvement. Private and runs like a clock. The South Carolina Agriculture & Mechanical Society owns land, buildings, concert venue and a massive parking lot that doubles as paid reserve parking for all athletic events at the 90,000 seat Williams-Brice Stadium next door. A very profitable operation without a single rodeo.

Anonymous said...

Ownership of the real estate is literally the only advantage the state has. 90% of everything that brings people to the fair (rides, food, events) are put on by private enterprises.

PittPanther said...

First if all, I agree that the commission needs to show exactly the profit and loss for each entity, if only to know where improvements should be made.

However, why so much focus on these entities needing to make money? If you found out that the State Fair lost money, would you argue that we should no longer hold a state Fair? Or close the Ag Museum if we find out it's losing money?

When did we as a society decide that there shouldn't be anything for the public good?

Do public parks make money? Perhaps we should close Parham Bridges, or charge a crippling membership fee for anyone who wants to use the walking track.

Do your streets and highways make money? Perhaps a significant gas tax hike, and some judiciously placed toll booths, could remedy that situation.

Anonymous said...

Wait - they aren't on MAGIC like the rest of the state???

Kingfish said...

MAGIC is a joke. Transparency Mississippi has gotten less transparent over the last two years. It didn't work for most of last year. It resumed operations this year BUT it became more complex and almost unusable.

Almost as if they don't want you to see what is going on.

Anonymous said...

Sounds like the Ag Commisssioner, Mrs. Cindy Hyde-Smith needs to get off her horse (both the animal and her high horse) and start running state government like it's should be run. This is just another example of our Republican leadership taking out of both sides of their mouth. We want small govt, we want things run like a private company, blah, blah, bullshit. Queen Hyde-Smith IS A REPUBLICAN. And you woman to tell me she doesn't know if something is profitable??? Tater Tot Reeves-you are pathetic. You want to beat up on any democrat or state agency that provides services to indigent people. But, don't mess with a Republican. They can go & blow and spend whatever they want! Our state "leadership" are a bunch of hypocrites that only care about two things-their pocketbooks and getting re-elected.

Anonymous said...

OK 1020, you have named one that was started before the civil war - and while not 'private business' it is actually a non-profit, but not quibbling. But to start one now, the private company would have to purchase a hundred or so acres and build several thousand square feet of buildings to put on an event like this. And as 10:26 notes, the fair is actually an accumulation of several private businesses to a large degree - the rides, food, etc, but along with some state support (security costs, entertainment).

The question here is whether the rents that the fair commission receives from these private vendors covers the cost of maintaining the facilities and covering the overhead costs. While there is a good deal of benefit to the state from it as a tourism attraction, there is also a big loss to local restaurants during the fair that offsets some of those benefits.

Anonymous said...

We made several hundred million dollars disappear like MAGIC. And now nobody can produce a financial statement. Or a budget report. People in major departments are cutting and pasting reports for the legislature.

Not that anybody in a major state office, elected or appointed, knows one damn thing about how to fix it.

Anonymous said...

The Agricultural Department makes plenty off renting RV parking spaces at fairgrounds to the legislators.
Mmmm-- wonder if that is profitable?

Anonymous said...

Seems like everyone wants to spend money, as long as the money they are spending comes out of the pocket of someone else.
Anytime the govt. spends a dollar there should be paperwork backing it up. If no paperwork is available they should not be allowed to spend a dollar.

Anonymous said...

Come on Pick. Get the auditors office down there!

Anonymous said...

11:55 - of course it is profitable. There was no money coming in from that property for that space otherwise. This way there is money to the state, and also it appears to be helping getting legislators to work together better. Don't understand why some folks want to find this to bitch about - plenty of other issues that are more appropriate.

Legislators have paid rent to park their RV's at Mayes Lake (a state park) for years. Some legislators have parked RV's at the park at the Res - also a state entity. Those that parked them at Crystal Lake might be different because that is not state property -but the result is that the state didn't get any income from them. What the hell is the issue about them parking at the fairgrounds?

For example - see if any of these legislators are paying for that rental space for their RV's from their campaign accounts rather than from their per diem. THAT would be legitimate bitch.

Anonymous said...

11:26 - nice rant about Cindy Hyde, but how in hades did you think that taking your regular shot at Reeves fit into that tirade?

Anonymous said...

Hyde-Smith needs to run Rick Reno off as Executive Director of the fairgrounds. Last year, Willie Nelson, Jr. offered to preform at the fair. Reno said no - they it would bring in large crowds of people and security would have to be beefed up. Reno does not like horse or cattle shows - he claims he's a promoter of venues such as concerts. But for the life of me, I can't name many that has performed at the fairgrounds since he has been hired. Bring back Billy Orr - at least he knew what to do! Also hear the Hyde-Smith wants to run for Lt. Gov. Heaven help us!!!

Anonymous said...

Great article! However, whether or not the State Fair is profitable, it is very important to the 'Last and Least' among us. They save their money, all year, to be able to go to the Fair. These are people who lead bleak lives, in dreary places - people who have NOTHING else to look forward to.

I don't mind fifteen or twenty of my tax Dollars going toward giving a bit of meaning to the lives of the sort of people I pay eight or twelve Dollars an hour - the people who do the work which keeps me comfortably ensconced on my third-of-an-acre in Madison, and driving a three-ton LX.

I have a Chinese brother-in-law, who has TWO doctorates in finance. He's adept at tracking large groups of people, crunching data to predict their actions, and assigning numerical values to things I can only describe in words. I have no doubt that he could assign a Dollar value to the Fair - taking into account the value of decreased hopelessness in the population. Hope and happiness have value. The Populace's having something to look forward to, has value.

I would say the same thing about Mississippi's Movie Industry. What may seem like a net loss, may actually be a significant gain. When a movie is being made, there is a tremendous injection of hope and excitement - often into a town where "hopelessness and depression" accurately describe the town's pre-movie way of life.

The Fair is a yearly injection of excitement, for the segment of the populace who need it most.

Anonymous said...

Sam R Hall is going to spend all the time between now and 2019 coordinating and aligning all the efforts of the Clarion-Ledger with that of the Mississippi Donkeycrats.

Anonymous said...

"WHERE IS THE MONEY?" Here are a few clues, the food vendors pay space fees which go to the Fair Commission. It's quite a lot, then they pay for electrical hook ups and garbage pick up - that's extra. Now when they're setting up they go on a list, need I have to say that a few bucks to the right person (I'm sure you can figure out who that is) gets your booth hooked up faster.

Now the food vendors all do business in cash - do the math - that's why the State Tax Commission reps. are down there continually try to get the State's share. Lot of good it does them, food vendors under-report their amount of sales and now can the Tax Comm. prove it.

And of course, let's talk about all those oversized stuffed animals which are bought by the gross for pennies but you average tens of dollars to win one.

So everyone is making money, which is why you keep seeing the same vendors back again and again.

The State Fair is a money suck, think of a vacuum going from state to state, which is what a lot of vendors do, sucking up the money and going to the next town. If I'm not mistaken, the next town they hit on the circuit is Shreveport. Now, make no mistake it's fun, but it costs you and makes money for those involved.

Anonymous said...

@1:28, many of those that have kids that show cattle are the ones that made millions off of you and your blissful friends who paid $20-50k or more an acre(if not 1/4 and 1/2 acres) of farm land so you all can pretend you're country chic. I know of many families in your area, who have more money than any of you yuppies who don't need to drive an LX to prove it either. They have laughed all the way to the bank as well. But their kids use the fair to show cattle and other 4H animals and it's part of their livelihood. The fair is not all carnies, rides, and concerts.

Also, if you knew about half of what you speak of, many local businesses suffer during the fair, other than those directly associated with, in, or around the fair. I, as well as other local business's go quiet when the fair comes to town and it is a known fact and has been for decades. We call it catch up week at my office.

Anonymous said...

CHS is an older woman who still thinks and lives like a JUCO cheerleader. I don't dislike her, know her well and don't understand why she is qualified to be AG Commishioner other than she married a cattleman.

Anonymous said...

@1:10 - If Reno is trying to focus more on concerts than he is at the wrong place. It doesn't take a PhD in acoustical engineering to grasp the fact that when you are in a ROUND building, the sound swirls and sounds like crap. The only way for tech to attempt to overcome it is make it louder and louder to the point OSHA would say you exceeded you TWA/TLV for daily dB dosage.
Sure would be nice for them to focus more on the rodeo aspect to make the Dixie National a higher paying and higher points event for the competitors. Better competition, better rodeo, more money. And try to get the PBR BFT series in during the fall.

Mr. 2-Bits said...

"Now, make no mistake it's fun, but it costs you and makes money for those involved."
That's an epic statement. Isn't that the definition of entertainment. What insight!!

Anonymous said...

This accounting problem is not isolated to the Dept of Agriculture. If one were to sit in on these hearings down at the capital designed to study spending and tax policy, you would find that any question that the agency head doesn't want to answer about spending is met with "our accounting system doesn't track that." First, that's intentional. They don't want anybody to figure out how much they are spending on travel or advertising or meals or that type of stuff. Second, while their accounting system might not track that, it is absolute hogwash that they can't get assemble the data by manual review of the receipts and invoices. And perhaps, if they had to continually gather the data manually, the accounting system would either be replaced or it would magically start tracking things. In no way should their response to that open records request have been considered fulfilled.

Anonymous said...

The solution is to tell any agency head who can't produce the data that until they do so that category in their budget will receive no funding. No travel data? No funding. No advertising data? No funding. They'll get the message real fast.

Anonymous said...

Since the Fair Commission is a 100% special funds agency, last year the legislature swept all its funds into the general fund. We will see how much money moves back into the Commission with the new budget year. Let the begging and lobbying ($$$) begin.

Anonymous said...

JUCU cheerleader, really. What college was that desperate? Hinds?

Anonymous said...

The problem with " privatizing" as one commenter suggested, is that it starts with the taxpayers giving up assets and often jobs, and ends with, rather than have a profit for the taxpayers, the money going into individual pockets.

If a private business can make money on providing services, so can the taxpayers if we insist that good financial practices are put into place.

Anonymous said...

I agree with the person who said every dollar spent by the government needs to be accountable. Every. single. penny. This is not "free money" here - this is our tax money. When I look at my tax stub, that money going to state isn't just invisible free money - it represents the time I spent working and my contributions to the government. If I go pay my car note, I know exactly how much it is and how much my interest is. Even though my money is going to something that will never be worth as much as I paid for it, it is still money well spent because it provides me the security of having a vehicle. Not sure why my tax money can't be contributed with the same mind-set. I have seen at least two comments alluding to "Well what if the fair was losing money? WOULD WE CLOSE IT???? OHNOOOOOS!!!" Jesus people. Is it that inconceivable to us as a society that we could actually pay our taxes and that our taxes could be used to enrich our own lives instead of the lives of the corrupt? How sad. If the fair is losing money, we need to figure out why and how to stop it. We need to turn our losses into profit, not just keep accepting losses. Some of you are real bleeding hearts wanting to avoid transparency to protect the poor. After all, misappropriating tax dollars doesn't hurt the poor at all. Right.

Anonymous said...

Hyde graduated from Copiah Lincoln.

Anonymous said...

10:48 - why don't you get off of your government supplied computer, quit reading blog sites and get back to doing the work that the taxpayers are paying you to do.

The differences from a private entity doing the work and the government are vast: The private entity does have a profit motive - and will do what they can to provide the service at the lowest possible cost. The government entity does not have a profit motive, or any reason to want to reduce costs. If the government entity reduces the cost, next year's appropriations will be reduced (unless we finally get to zero based appropriations) and then the government entity has to do it again.

If the private entity has workers that are not performing, but instead are spending their paid time playing games or reading blog sites on their computers, they can be 'relieved of their duties' and sent home. The government entity has one of two options - ignore it and let the employee continue while the work load is either not done or spread among other taxpayer paid employees, or promote the worker to get him/her out of the way and hire someone else to do the job.

Dream on that with 'good financial practices' will insure that the work will get done for the same cost.

You are right on one point, though. If the project is privatized, the taxpayers give up assets - which they have to do in either case - they give up their earned money in the form of tax dollars - and they give up jobs in the form of government employees. But the jobs are recreated by the jobs that the private employer utilizes to get the job done. Granted, the private employer will probably do it with fewer people, so there will be fewer jobs, but that's the benefit to the taxpayer. If the private employer makes a profit - which is the purpose of the private enterprise - they have to pay taxes; they reinvest the profits into their business so that they can get other projects and hire more people.

Our government should not be in the business of trying to create government sector jobs. The goal is to create more private sector jobs. If the work product can be found in the yellow pages they the government should not be doing it in competition with private sector employees.

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