"States are asking: Does it really warrant state funding? Do we really need to be doing this? Should we take it a different direction or just cancel it altogether?," says Doug Farquhar, program director for agriculture at the National Conference of State Legislatures.
As states confront budget shortfalls amounting to a combined $103 billion in the next fiscal year, according to the Center on Budget and Policy Priorities, state fairs must at least be an option for reductions, Farquhar says.
"To go to a state legislature now and ask for several million dollars a year, that's a tough call," he says.
In late October, the Albuquerque Journal reported that a state audit had concluded the New Mexico State Fair was losing an average of $3.4 million since 2006. The fair was supposed to be self-sustaining, some legislators argued, and taxpayer dollars shouldn't be propping up a struggling enterprise. The audit recommended running the fair for 10 days instead of 17 as one solution.
The Illinois State Fair, which had a deficit of $2.8 million in 2009, could also be targeted for cuts because the state supplies $800,000 of its $5.1 million budget, the Rockford Register Star reports. A few states over, South Dakota's state fair has had more than half of its state funding cut.
In the most extreme cases, a state may have no hesitation in shutting a state fair down. Most famously, in 2009, Michigan closed its state fair after 160 years. Governing reported in July 2010 that then-Gov. Jennifer Granholm cut the fair's funding in an effort to balance the state's budget.
Not all state fairs are at risk because not all of them are dependent on state funding. For example, the State Fair of Texas is operated by a private, non-profit entity that has remained fiscally sound through the recession. The Minnesota State Fair is operated under the direction of a state-appointed board, but hasn't accepted state money for more than 50 years.
Advocates are confident that fairs will survive and even flourish in the future, says Jim Tucker, executive director of the International Association of Fairs and Expos (IAFE). State fairs offer a family-friendly and cheap form of entertainment that is appealing to Americans who are staying closer to home and spending less, Tucker says.
He has some numbers to back up his claims. IAFE conducts an annual survey of about 400 of the 1,200 state and county fairs that make up its membership. In 2010 (compared to 2009), 80 percent of fairs experienced an increase in attendance; less than 20 percent had a decline.
Robert Johnson, president of the Outdoor Amusement Business Association, says that while he sees that state and county fairs have endured the rough economy largely intact, he admits it is disconcerting when there is news of another fair at risk of closing down. "There is some concern that some of these fairs could possibly go under," Johnson says. "But I don't see that as a major trend. I think states recognize their value."
Johnson says that that state fairs are a critical source of revenue for vendors -- thousands of his organization's members, many of which are small family businesses, "rely very heavily" on state and county fairs during the summer months. States often tout that their fairs often generate tens to hundreds of millions of dollars in total economic impact.
There are some steps that fairs can take to make themselves financially viable if state funding is cut, Tucker says. Keeping entrance fees low to encourage more attendance is one way. South Dakota went in a different direction: The fair has stayed open by raising fees and slashing spending on entertainment and advertising.
Just because lawmakers may look at diminishing state funding for fairs doesn't mean that the role of the state fair has diminished. If anything, Tucker suggests that the role of the state fair still serves an important function. "Fairs came into existence to provide a place for the showcasing of agriculture and exchanging of ideas," Tucker says. ""Those public policy reasons still exist today."
