COLUMBIA CITY Council’s decision to guarantee annual funding for the Famously Hot New Year’s Eve celebration should carry with it a stern warning: No more bailouts.
Recently, Columbia’s council ensured that the party doesn’t have to compete for city hospitality tax dollars any more by granting it line-item status in the hospitality tax budget. The designation means event organizers don’t have to apply to a citizens committee, answer detailed questions and present financial and other data to the panel.
But that special status must not mean that Famously Hot’s organizers won’t be held responsible for living within their budget. In addition to a $130,000 line-item allocation from hospitality tax revenue, the event will receive $40,000 in accommodations tax money. City Council should make it clear that the $170,000 contribution is all the festival will receive for its next party.
The city has had to help the party settle deficits each year of its three-year existence. For sure, the party has delivered in some key ways. It has drawn a diverse and sizable crowd downtown, brought national attention to the city and provided an economic boost to local restaurants, retailers and hotels.
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But its failure to stay within budget is troubling. January’s festival ended with a deficit requiring an additional $50,000 in hospitality tax funding. Columbia already had contributed $90,000 — $50,000 in hospitality tax funds and $40,000 in accommodations tax dollars; the bailout raised the city’s gift to $140,000. Richland County Council contributed $50,000.
Considering its drawing power, it’s legitimate to use hospitality tax dollars to support the party: 20,000 people attended the first year, 25,000 the second and more than 26,000 last year. The goal is to attract 27,000 this year. But festivals can turn into black holes if officials aren’t careful.
Once Columbia and Richland County provide initial funding for the upcoming festival, they should allow it to sink or swim on its on merits.
Unexpected expenses will arise at times, and revenue sometimes will fall below expectations, but it’s the job of Famously Hot New Year’s organizers to anticipate such situations and devise contingency plans to address those situations. Waiting until the party realizes a deficit in order to present a bill to the city is not acceptable.
Organizers are planning to spend $430,000 on this year’s party. They should build a budget that depends only on the initial funding from local governments, and no more. They have been effective in obtaining private backing for the party, and that is where they must concentrate their efforts should they desire to spend more or to bolster funding to protect against yet another deficit.
It’s undeniable that Columbia receives a boost from the party. We hope this year’s event is the best yet and that — above all — it stays within budget. But if Famously Hot can’t burn consistently bright on its own, perhaps serious consideration should be given as to whether it’s an old acquaintance that should be forgotten.