Due to the current fiscal mess the state of California is facing, elimination of funding for California State Fairs is being pushed through in Sacramento.

While it is understood that the fiscal situation will require substantial cuts in many departments and programs, some cuts, if too severe, can be counter-productive to the goal of reducing the deficit. The 100 percent elimination of the state fair seed money is an example of making a bad situation worse.

I own a local real estate brokerage. During this economic downturn, we have had to make extensive cuts all across the board.

We have learned that not all cuts help the bottom line. Certain marketing, office and personnel cuts can cost business far more than the hoped for savings would generate.

Thus arbitrary, across-the-board cuts is not always good business. Each item needs to be carefully looked at to determine what impact it will have on the overall larger situation.

As an example, we learned that reducing print media helped our bottom line while reducing online media hurt our bottom line. So we increased our online marketing budget, and last year, our market share increased 15 percent.

I believe doing away with supporting California Fairs will hurt the state’s bottom line. Our fairgrounds act as a breeding ground for local economic stimulus.

Our firm has had a booth at most fairground events for 20 years, and the amount of business created for us directly and indirectly has been substantial. The same is true for other businesses.

The networking and business connections made at the fair are immense. If our fairgrounds was forced to reduce its size and services, it would be detrimental to our local economy, and the same would be likely true statewide. The overall loss of income to the state will likely far exceed any anticipated savings from the funding cut.

In business, when a department or program is making money, the last thing one should do is cut off its funding.

The same should be true in state government. Identify the “gooses laying the golden eggs” and support them, don’t starve them. If the Department of Motor Vehicles or the Department of Real Estate is making money, grow them, don’t cut them.

If the California Fair system generates jobs and revenues far in excess of the cost, allocate more money, not less (or none.) Monitor results, and determine the point of diminishing returns. But don't cut it out completely.

Keeping our State Fair system healthy is simply good business and will avoid making a bad situation worse.

Phil Smoley is broker and president of CPS Country Air Properties. He lives in Lakeport, Calif.