State fair ticket price hike keeps services going

Opening a fair stand
Armando Ortiz, from California, unwraps the souvenir stand he works with at the Minnesota State Fair in Falcon Heights, Minn. Wednesday, Aug. 24, 2011.
MPR Photo/Jeffrey Thompson

If you didn't buy your tickets to the Minnesota State Fair in advance, it may cost you a buck or two more per person to enter the fairgrounds this year.

To cope with rising expenses, prices for tickets purchased at the fair gates are raised by one dollar for adults and two dollars for children. Adult tickets will be $12; tickets for children, $10.

Fair officials say prices are up because they need additional revenue to keep the fair running well. It's the first ticket price increase in four years for adults and the first increase in seven years for children.

This year, the fair will spend about $1.8 million on park and ride buses that provide free transport from 37 free parking lots to the fair and back, said Jerry Hammer, its executive vice president. It also will pay $1.2 million for police and medical personnel and $1 million for cleaning costs.

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"If we were to cut corners in order to keep prices down a buck, we'd wind up diminishing the fair," Hammer said. "You wouldn't see as much service, as many staff keeping the place clean. You wouldn't see as many free buses running. You wouldn't see the entertainment that you do."

Over the last three years, the fair has averaged annual revenue of about $37 million. It also posted net income averaging $1.1 million.

That works out to an average profit margin of 3 percent. That's far below expectations for for-profit companies, but profits are not the main goal of nonprofits like the State Fair.

Revenue should exceed the expenses but not by an excessive amount," said Richard Sathe, an accounting professor at the University of St. Thomas. "To me, they're doing what a nonprofit organization should in that they're running in the black and they are building a small amount of fund balance, net assets."

The fair has about $15 million in long-term debt and other obligations, not an onerous burden. It also holds reserves of more than $4 million that could be used to cover unexpected or large expenses.

That puts the fair on solid financial ground, said Andy Holman, a CPA and expert on non-profits at the University of Wisconsin-Milwaukee who reviewed recent audits of the fair's finances.

Holman especially likes how the fair has built up reserve funds.

"That's a very solid indicator of financial health for the fair," he said.

There are only a few fairs in the same league as the Minnesota State Fair. Compared to their admission fees, Minnesota's regular adult admission price of $12 looks like a bargain. Comparable tickets for the Eastern States Exposition are $15, and the Texas State Fair, $16.

Fair officials say expenses for the Great Minnesota Get Together amount to about $18 per person. The fair keeps ticket prices down with subsidies from the rents charged to exhibitors and vendors.

The state fair expects a slight bump in revenue from the ticket price hike this year, but officials won't say how much. Attendance increased slightly after the last adult ticket price increase in 2007.

As it turns out, most people attending the fair won't pay the full admission price.

Advance purchase fair tickets were $9 this year, the same as last year. More than half of the people attending the fair buy discounted tickets in advance or go to the fair on discount days for senior citizens, veterans, kids and even library cardholders. So, only procrastinators will pay more to attend the fair this year.

Adam White, of St. Paul, picked up discount tickets earlier this week at a Cub Foods store in St. Paul. But he thinks the fair's price hike is probably justified.

"Prices are going up for everything everyday," said White, who has gone to the state fair since he was a baby 27 years ago. "I understand they probably need it to maintain the grounds and pay the staff. Whatever it costs, it's still a fun time."