[r63] Messmer Report: State or Sponsored?

Posted by: Zach Weismiller  | Friday, August 20, 2010

You may not expect to see a fast food logo on a fire hydrant, or as you drive into your favorite state park this fall.

But putting up with a little extra advertising in unexpected places may be a way for some states to avoid painful tax hikes, and that's exactly what governments are trying to do as we head towards the light at the end of this economic tunnel.

We still have $830 million in reserve accounts here in the state of Indiana. This is much better off than the situation many other states are in, but keep in mind: that number is expected to be whittled down to only $188M by the end of Fiscal Year 2011 if revenues come in as expected. and $188M is only 5 days of state spending!

So as you can imagine, we are constantly on the prowl for creative, revenue-raising alternatives to higher taxes.

Back in January, Kentucky Fried Chicken paid fifteen thousand dollars for the marketing privilege of topping fire hydrants in Indianapolis and Brazil, Indiana with colorful plastic "wing buckets"-advertising for their new fiery chicken wings.

That was enough money for the City of Brazil to purchase several new, badly needed fire hydrants.

In Georgia, state troopers assisting stranded travelers during rush hour-the equivalents of our Hoosier Helpers along 465-are sporting State Farm logos on the sides of their state vehicles.

It seems that when tax revenue is down, city and state officials are open to almost any revenue-raising idea, if it means avoiding service cuts and tax hikes.

This may not be as surprising in cities, where advertising follows you on billboards, bus benches and blimps as it is. But what about the great outdoors?

Georgia, for example, is trying out a relationship between Verizon Wireless and the Department of Natural Resources.Verizon is sponsoring tools and supplies for Boy Scouts cleaning up waterways and trails around the state over the summer, and in exchange, Verizon is being recognized in publicity materials and on the Georgia Department of Natural Resources Web site.

In Virginia, outdoor supply company North Face has an interesting relationship with the Virginia Department of Conservation & Recreation, which has raised several million dollars in corporate sponsorships already.North Face gives out a free pass to Virginia State Parks with each purchase of $50 or more, and promotional codes for more North Face discounts are posted on Virginia hiking trails.

However, I have to say that I still have concerns with this method of raising revenue for government services. What happens in the event of another recession- or even another depression- when companies are forced to pull their funding?

What guidelines should be erected to guide government and corporate officials as they decide where to place advertising and where that extra revenue should be spent? As we get ready for another budget year in Indiana, here's the million dollar question-if Indiana decides to open up public property to advertising revenue, should those corporate dollars be built into the budget, or treated as one-time money?

On the other hand, budget-trimming options across the country are grim. In Minnesota, the governor recently announced that payments for schools and colleges would be delayed. Louisiana has implemented a hiring freeze, just like we have, and Pennsylvania recently passed a budget which will lay off 1,000 state employees.

So, what do you think? Are sponsorships a good way for states to raise money, or a slippery slope to opportunities for bidding corruption? Is public property fair game for advertisers- the way various companies currently help sponsor the State Fair- or should public spaces and government property be off-limits?

I'm not sure what I think about this practice yet, but I'd sure like to hear your thoughts. Email me at h63@in.gov, or leave a comment at my website: www.in.gov/h63 and while you are there, take my online survey on other issues that are of concern to our state.