TOPEKA — Cancelling commercial aspects of the Kansas State Fair compelled the organization to halt building renovations, impose staffing cuts and set in motion a plan to raid its charitable foundation to cover an estimated $2.3 million revenue shortfall.
David Tobias, interim general manager of the state fair, said the state fair could avoid some of that pain if the state or federal government came through with a bailout.
“The Kansas State Fair is an important asset, not just to Reno County, but the entire state economy,” he said.
He said the fair had an annual economic impact of $70 million with a majority of that transpiring with a 60-mile radius of Hutchinson.
A committee of the Kansas Legislature is expected to explore the possibility of filling the financial gap with federal CARES Act funding and the alternative of adopting an appropriations bill during the 2021 Legislature to earmark state tax dollars for the Hutchinson state fair.
In addition, legislation pending in Congress would provide $500 million to aid cash-strapped local, county and state fairs nationwide. The bill introduced in the U.S. House and co-sponsored by U.S. Rep. Roger Marshall, a Kansas Republican, would redirect funding in a U.S. Department of Agriculture marketing program to create grants under the Agricultural Fair Rescue Act.
This was the first cancellation of the Kansas State Fair since inception in 1913. It was scheduled to run Sept. 11-20, but most activities were called off. The fair board decided to proceed with livestock shows that are closed to the public.
“To compensate for the lack of fair revenue, the fair has already let go of some staff, implemented furloughs and putting capital projects on hold,” Tobias said.
He said it would be unwise from a fiduciary perspective to drain the state fair foundation’s account that was built by donors.
The state fair did receive $205,000 from the state of Kansas and $7,000 from Reno County’s share of CARES Act dollars.
The task force set up by Gov. Laura Kelly to consider how to allocate about $1 billion in CARES Act funding among state and county governments in response to the coronavirus has set aside $2.3 million to address the fair’s revenue problem. However, that money is contingent on amendment of federal law forbidding it to be used to fill state government budget craters.
“We do appreciate the work on this,” Tobias said, “but this is not a guarantee.”
Rep. Troy Waymaster, a Bunker Hill Republican and chairman of the House Appropriations Committee, said he received a flood of telephone calls about the fair’s precarious financial future. He said budget challenges in 2020 could make it difficult to organize the next fair in September 2021.
He said he was convinced CARES Act money could legitimately be applied to the state fair because the financial challenges reflected the influence of coronavirus sweeping through the country.
“I think we can make a case this is COVID-19 related because we weren’t able to have the state fair because of the pandemic,” Waymaster said.
Rep. Kathy Wolfe Moore, a Democrat from Kansas City, Kan., said she disagreed with Waymaster’s analysis. She said CARES Act funding, as the federal law is currently interpreted, is off limits to state agencies such as the Kansas State Fair.
Waymaster said an alternative would be to amend the state budget to appropriate $2.3 million to the state fair from the state’s general operating budget.
“We should talk about that. There are probably pros and cons,” said Sen. Tom Hawk, a Manhattan Democrat. “I’m hopeful Congress will come through with more flexible guidelines or with the agriculture fair rescue act.”
Hawk suggested the state fair board request a waiver of wastewater fees from Hutchinson and a break on utility costs from Evergy. There is nothing lost by attempting to negotiate those adjustments during the pandemic, he said.
In July, fair general manager Robin Jennison resigned from his job to prevent deeper staffing reductions. Tobias, who had been the state fair’s director of operations, assumed Jennison’s duties.
“It will be a welcome surprise if the fair is able to weather this storm without some furloughs or even a reduction in force,” Jennison said in his resignation letter. “Having the highest placed administrator surviving, while front line essential employees bear the brunt, is something I will not do.”