Editorial: Keep Columbia’s New Year’s Eve party within budget

March 27, 2014 

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C MICHAEL BERGEN — mbergen@thestate.com Buy Photo

— BY SOME measures, Columbia’s three-year-old Famously Hot New Year’s Eve party has been a success: It has drawn a diverse and sizable crowd downtown to enjoy a good time and has brought national attention to the city and given an economic boost to local restaurants, retailers and hotels.

But that success is tempered by the festival’s failure to stay within budget. This year, the party ended with a deficit for the second time in its young life and once again had to rely on City Council to bail it out, this time with an additional $50,000 in hospitality tax funding. Organizers say the annual party’s deficit resulted from a need to sell more VIP tickets as well as an overestimation of sponsorship revenue.

Whatever the cause, Famously Hot New Year’s Eve organizers must do a better job of budgeting. Columbia and Richland County provide upfront funding for the festival and shouldn’t have to go further into the public’s coffers to wipe out deficits.

Columbia already had contributed $90,000 — $50,000 in hospitality tax funds and $40,000 in accommodations tax dollars; the $50,000 bail out raised the city’s gift to $140,000. Richland County Council contributed $50,000.

Without a doubt, it is legitimate to use hospitality tax dollars to support the party, which drew 20,000 people the first year, 25,000 the second and more than 26,000 this year. But there must be a limit. Once the city makes its initial allocation, the party must stay within its budget or come up with more private money to make up the difference.

The city — and county, for that matter — has seen its contribution grow significantly since the party’s first year, when it contributed a total of $55,000; half of that came after the event to wipe out a deficit. The second year, Columbia gave $56,000 and the county provided another $15,000. While the second year’s event was within budget, it was aided by the fact that the city and county gave more upfront.

The concern about this year is that despite getting a higher initial allocation from the city and the county — $140,000 — the New Year’s Eve party still managed to incur a deficit requiring an additional $50,000 from the city.

While unexpected expenses arise and revenue sometimes fails to meet expectations, it’s incumbent upon organizers to anticipate such situations and devise plans that include contingencies to address those situations. Assuming that the city will automatically plug any hole is not an acceptable plan.

That was the unfortunate quandary Columbia got into with the now-defunct 3 Rivers Music Festival, which sucked up $1.6 million in city tax dollars from 2000 to 2006 before finally being shut down. Too often, City Council not only provided initial funding for the festival, but had to come back after the final bills rolled in to bail it out with additional public money. Festivals should not become a drain on public coffers but should be driven primarily by private donations.

We commend Famously Hot New Year’s Eve organizers for working hard to get private backing, with admirable success. But it’s imperative that they plan adequately and build a budget dependent only on the initial funding allocated by local governments. For its part, City Council should set a limit and stick to it.

The Famously Hot New Year’s Eve celebration has a noble goal in its effort to brand the city of Columbia and promote economic development. But if it can’t survive without constant deficits borne by the city — and we hope it can — we question whether it should even exist.

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