The Economics of Festivals

Caesar! It is not all about the spectacle!

Various Roman emperors would put on exuberant spectacles in the Coliseum to entertain the populous when there was dissatisfaction within the Roman Senate. Our festivals have taken on this appearance as the years have rolled on. Everyone seems to love the festivals as an apparent free party; but as your parents would tell you "there is no free lunch." Someone is paying, but no one seems to have any idea how much.

There is no doubt that the summer festivals have had a positive benefit in promoting Butte and changing the minds of many Montanan's impression of Butte from a negative to a positive.

 The issue at hand is that these Festivals have a never-ending appetite for additional funding. Specific allocated public funds are never enough and these established organizations and groups ask for funding each year after year.

When the URA first established funding for events and festivals, their program requirements were set up with limits on the amount of funding with a requirement of a 20% reduction each year until the event was self-sustaining. This has not remotely happened. In fact the appetite for money has grown each year, dipping into such funds as economic development money that, in my opinion and by established guidelines, would be better utilized for new economic opportunities, not old established ones.

The “in-kind” donation of people hours and equipment by BSB is not free. Hours worked are logged in, salaries are paid, equipment used is charged against the BSB budget and fuel is utilized.  This in-kind donation by BSB is an actual cost.

In addition, our summer construction season is short, and equipment used for such critical needs as road construction are diverted to support the summer festivals. No one can dispute that our roads are NOT in premier shape.

 BSB equipment and man power should be utilized on basic public works projects. Required festival setup and construction should funded by the various event organizations that should be utilizing local contractors, labor and volunteers.

It was also quite amusing that one week before a certain festival last summer, the Head of Public Works declared “all potholes filled.” So, in essence, we would make the connection that all equipment being utilized, all day long, for a week before and after the festival, was not really needed for public works. Ok……….

There is always a lot of talk about the economic impact of the festivals, estimates of visitation and the amount of money brought into the economy. It is difficult to believe that some of the reports are valid considering that virtually all of the vendors are from out of town, whether they be food vendors or out of town crafts persons. The vendors pay fees that support the festival and the profit goes to the out of towner. Local motels see a spike in overnight stays but not dramatically. Visitors often come for one day and are from a 200 mile radius.

 I can tell you from experience in owning a gift shop business in the heart of Uptown on the corner of Montana and Park Street that our worst summer days were during festivals. We might as well have closed our doors and simply enjoyed the event.

Public comments were “Well, you must have raked it in during the festival with all those people in town!” Um… no. It is an urban legend for retailers that the festivals line their pockets. Ask any retail business in Uptown Butte during the festivals if business is great during the festivals, virtually all will say no.

 Some restaurants and bars have indicated good paydays, but not extraordinary. Festival goers are buying over-priced funnel cakes and other food and buying crafts from various artisans; the last thing a sun burned festival goer is going to do is shop local. Uptown merchants work and pay taxes for 365 days of the years vs. the limited days of the festivals.

Our sporting events and various tournaments have significant impacts to the local economy that are tracked quite accurately. Families purchase meals, stay in hotels and visit attractions.

This same type of accurate tracking should be applied to the various festivals. Some Festivals have paid staff, others are all volunteer and others are set up to make money. Some festivals receive significant amounts of public support and money and other very little. Some festivals are virtually self sufficient while others are always requesting more money.

The point here is that all festivals should become self-sustaining and that all of these events should be treated with a formula of equality based upon the positive and proven economic benefit to the community.

I am not advocating ending public funding or support of festivals, but I am advocating for the careful evaluation of their true impacts and costs to the tax payer. I have specifically not called out any particular event or festival on purpose, because the formula to evaluate their benefit has yet to be developed.  The evaluation of each festival can be undertaken in a fair and impartial manner. It will certainly not be a major crisis if a festival has to be slightly downsized, location adjusted or its schedule and programs revised. Fair is fair and local taxes should certainly benefit local citizens and business because basically the free festivals are actually being paid for with your money.

There is no better history of a "Free Festival" becoming a financial suckhole than "Burning Man."  You might want to check it out.