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Update: Civitas responds to this post here (link), and doesn't like the criticism. They write, "Binker fails to make the case for why taxpayers across North Carolina should be forced to subsidize the High Point Furniture Market," which misses my point entirely. I'm not making the case one way or the other. I'm simply pointing out that their analysis failed to do either.

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Raleigh folks: this is the post wherein I become a complete homer and stick up for the furniture market, something very important in Guilford County, which is my paper’s home circulation market. I’m basically about to call a think tank’s criticism of a certain piece of government spending “misleading” and “ill-informed.” Let me say at the outset, that I don’t really have a dog in the fight other than this is an issue that I have covered off and on for the past decade. My reaction here is based on the fact that the think tank’s piece is not fair to the institution in question.

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The Civitas Institute in Raleigh is a conservative think-tankish organization that does some polling and writes (mainly critically) about government. As a rule, they grouse about anything they think smacks of “pork barrel" spending.

Today, Civitas took aim at funding for the High Point Furniture Market. Specifically, they are critical of H 169 (link) and S 188 (link), bills that request funding to the furniture market. (For background, click here or here.) Writes Civitas (link):

The bill seeks to allocate more than $4 million in taxpayer dollars over the next two years to the High Point Furniture Market. This is clearly a case of the experienced old dogs–Jeffus and Blust–teaching the freshmen new dogs–Faircloth and Brandon–the same old political tricks.

This bill is bad for three reasons: its pork, it takes money out of the highway fund, and it furthers a flawed economic development strategy.

First, there is no denying that this bill is pure pork. It takes state funds and allocates them to a very specific local project. Sure, the folks in Guilford County like it…but it doesn’t do much for the rest of the state forced to pick up the tab. Funding this particular pork project might be tradition, but that still doesn’t make it right.

So let’s acknowledge up front that this is a bad budget year and that funding for stuff the state government funds at the moment may have to be cut. Let’s further acknowledge that this is a project of particular interest to High Point and Guilford County. The furniture market like many enterprises may have to see its funding cut.

You should also know that the furniture market has been getting fairly steady allocations for five or more years. The fact that bills were filed this year mainly indicates that those representatives have a continued interest in the funding and when push-comes-to-shove, they’ll take responsibility for it.

Now that the acknowledgements are out of the way, you may want to know what exactly this “furniture market” thing is.

Actually, it’s a group of things, commercial furniture showrooms to be exact. There are 180 buildings that represent somewhere between 10 million and 11 million square feet of showroom space.

The main purpose of these showrooms is to provide a backdrop for semi-annual furniture markets that come every spring and fall. Official estimates say that 85,000-plus attendees descend on the city to look at, haggle over and place commercial orders for furniture every six months. In between market times, many of those showrooms are used by interior designers or others in the trade to help sell on the retail level.

This market is huge. Rental car places sell out, restaurants fill up, hotels as far away as Burlington and Winston-Salem get full. People in High Point rent their houses to buyers and manufacturer representatives. Florists and stationary shops get a big bump in business, as do companies that do light construction work. It’s a huge chunk of the county’s property tax base and accounts for a lot of full time and part time work in the city.

To give you some comparison point: 103,219 people watched the Super Bowl in person this year. Those from out of town were in the Dallas area for a couple of days. The somewhat speculative economic impact estimates from the area say that the game had a $611.7 million economic impact. The High Point market draws in slightly fewer people at one time, but has them here for longer and twice a year. Economic developers estimate the market has a $1.4 billion annual economic impact on the state.

To defend that interest, about a decade ago the furniture showrooms banded together with the city and former the High Point Market Authority (link). It is a nonprofit that is bound by open meetings and records laws and is designed to coordinate the market. Essentially, it’s a neutral player that makes sure the trains run on time so the showroom folks can concentrate on doing business.

At the same time this authority was created, downtown furniture showroom owners voted to tax themselves to fund the authority. The money the state gives essentially runs through this authority.

So what does the state money buy for the market? Two things.

The transportation funding pays for the temporary transit system needed to schlep 85,000 people who aren’t normally here around High Point. The market doubles the city’s population and getting around the city can be difficult during market times.

Back when I was covering the market in 2000 and 2001, the biggest complaint people had is they couldn’t get around. Parking was atrociously hard to manage and ever more expensive if you managed to land a space. Out-of-city cabbies didn’t know their way around and shuttles were too few and far between. The transportation money alleviates that complaint and makes what amounted to one big traffic jam livable.

That’s important because along about 2001, some folks out in Las Vegas announced they were going to build a new furniture market and that it was going to rival High Point. If I recall right, the phrase “eat your lunch” was used. (Apparently they were so eager to take on High Point they were willing to land a rather large loan that's now in default (link).)

Solving the transportation issue gave a lot of folks a reason to keep coming to High Point rather than commit to the shiny new market out west.

As for the marketing money that comes from the state: it is used to let folks outside of North Carolina know what’s here, encourage them to come, and fight back against the Las Vegas threat. Furniture trade shows are a global business. High Point is not just fighting with Las Vegas, but it competes with shows in Europe and Asia.

So let’s look at the assertions Civitas makes about the market.

• “First, there is no denying that this bill is pure pork…it doesn’t do much for the rest of the state forced to pick up the tab.”  || There’s a pretty good argument to be made that dumping $1.4 billion in the state’s economy benefits the state.
   
• “Pork funds for the High Point furniture market have shown up in past Civitas pork reports, identifying them as an expensive chauffer service for festival attendees. Next time you are trapped in gridlock on the highway remember that some of your legislators thought funding shuttle buses at a furniture festival was a better use of transportation funds than expanding roads necessary for economic growth.” || There’s really no way to widen enough roads and build enough parking lots to accommodate an influx of 85,000 people who aren’t normally here. Even if there was, it would be stupid and costly (on the order of billions or dollars) to build that kind of infrastructure for use four weeks a year. There’s a good case to be made that the buses and shuttles are the least expensive option available. Also, the use of the word “chauffer” might make you think the state is paying for limos. Van and bus pools are the norm, so using “chauffer” is just misleading.
   
• “Writing a check to the High Point furniture festival really is just writing a check. It doesn’t make North Carolina’s furniture industry any more competitive but it does guarantee that the festival will be back asking for more of your money when the next budget cycle rolls around.” || First, the state isn’t just giving the market authority to spend money in any old way. The use of the money is prescribed. Secondly, there are still furniture manufacture, repair and assembly operations in the area and they are still in the High Point area partly due to the market. Third, the money spent on the market makes the market itself more competitive. Finally, surely Civitas isn’t suggesting that the state would be better off without the market, is it?

I will say this much for the Civitas analysis, there very well may be a case for not putting taxpayer cash into the market. Perhaps the state should say, “boys, it’s time to sink or swim on your own.” But this piece doesn’t do the trick.

Update: Now if you wanted an argument for suspending state funding for the market, you might consider what recent changes in ownership might mean. People who have recently invested in the High Point market are investing in Vegas as well (link). Our editorial writer Doug Clark offered up this thought in an e-mail to me:

I do wonder how much the new, unified ownership of a huge share of the market will change the equation. You can argue, and it will be argued, that an entity that puts up $400 million-plus for showroom properties can pay for its own marketing and transportation services. Also, the fact that this new ownership also has significant ownership interests in Vegas kind of dampens the competitive angle. Should taxpayers continue to pay to help High Point compete against Vegas when in fact High Point and Vegas essentially aren’t competitors anymore? Or at least the competitive dynamic is very different, although we don’t quite understand how different yet.