A Corny Waste of Tax Dollars

Drew Johnson

August 30, 2012

The Corn Palace is one of South Dakota’s most famous tourist attractions, and easily the corniest waste of tax dollars anywhere in America.

Located just off I-90 in the town of Mitchell, the Corn Palace is a 43,000-square-foot exhibition hall that houses concerts, proms, basketball games, rodeos, craft shows, graduations and a polka festival.

What draws tourists to the Corn Palace, however, is the massive corn mural covering the building that is decorated annually with 275,000 ears of corn and tons of other colorful grains.

The mural is unveiled at an annual Corn Palace Festival. This year’s festival wrapped up its five-day run on Aug. 26.

Despite the Corn Palace’s kitsch appeal, the city-owned facility never turns a profit. As a result, approximately a third of the Corn Palace’s $1.7 million operating budget comes from the pockets of taxpayers every year — whether they visit the facility or not.

This year, taxpayers will chip in roughly half a million dollars just to underwrite the financial flop. Over the past five years, Mitchell shucked $3 million in taxpayer money from residents and visitors to subsidize the operation of the 90-year-old corn-covered convention hall.

That hefty hunk of money doesn’t include the capital expenses passed on from the Corn Palace to taxpayers.

On Aug. 21, the day before this year’s installment of the Corn Palace Festival began, city leaders voted to pour millions more into the aging exhibition space. In total, the city will spend $6.5 million on upgrades and additions to the Corn Palace. While city leaders hope that private money can be raised to offset the steep expense, as of now, Mitchell taxpayers are on the hook for the entire cost of the project.

In order to come up with the plans for the $6.5 million project, the city spent nearly $150,000 in taxpayers’ money to study renovation options for the Corn Palace and to consult with design firms.

To make matters worse for taxpayers, a May hailstorm required approximately $175,000 in roof repairs to the Corn Palace. Local taxpayers picked up the tab for that costly fix, too.

Bankrolling the Corn Palace drains so much money out of Mitchell’s general fund budget that the city imposed a one-third cent tax on lodging, restaurants and bars to finance a special fund that spends approximately $200,000 each year bailing out the floundering maize museum.

The state also earmarks a heaping helping of its $18.7 million tourism budget to promote the Corn Palace. Those South Dakota Department of Tourism funds consist of federal and state tax dollars, as well as revenues generated from the hotel and gaming taxes slapped on tourists.

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