Balloon vendors can’t seem to catch a break these days.
With helium costs skyrocketing and supply shortages developing, the balloon industry has struggled for more than a year to compete as worldwide demand for the gas has, well, ballooned. Adding to the turmoil is a bill in the California Legislature that would ban helium-filled foil representations of birthday cakes, Hello Kitty and the like.
Foil balloons -- made from a tough polyester film known as Mylar or some other metalized material -- are accused of causing hundreds of power outages each year in California by short-circuiting power lines they encounter during escape attempts.
For entrepreneurs such as Amanda Armstrong, a balloon ban in combination with higher costs could stick a pin in their business.
“It will hurt my sales, if not put me under,” said Armstrong, who runs a balloon decorating business called Top Hat Balloon Werks from her home in Mission Viejo, servicing weddings, birthday parties, quinceaneras and other celebrations. The balloon designer, who can tick off the aesthetic and profit characteristics of various gas-filled creations, said metallic balloons accounted for about half of her $175,000 in annual sales.
“If they ban the foil balloons, not only will I not have those available to make my business run, but it also hinders my design capabilities,” she said.
Armstrong, formerly an electrician for balloon bill proponent Southern California Edison, started the operation as a side business in 1999 after decorating her daughter’s fifth birthday party.
“I just thought this would be an excellent business,” said Armstrong, who helped organize a protest over the bill in Pasadena last month that drew nearly 400 people. “I was able to have a family life, able to schedule around my kids, along with having a business.”
LA Balloons, a subsidiary of Los Angeles-based Conwin Inc., distributes foil balloons to about 5,000 accounts in Southern California including florists, grocers and party supply stores. President Mike Wing said a ban on the balloons, which account for 40% of his sales, would extend much further than legislators anticipated.
“You can’t imagine the loss,” Wing said. “There are 40 million to 45 million foil balloons sold every year in California. Twenty thousand jobs are at risk if this bill passes,” including employees from shops that rely on metallic balloon sales.
Balloon sellers have been buffeted by other problems.
Since 2006, delays and outages at some of the industry’s largest production plants have caused a global supply shortage and price increases. In addition, helium demand has grown from non-party sectors, including industry and medicine. Among its lesser known applications, helium is used to purge the space shuttle’s fuel tanks and cool the magnets during a magnetic resonance imaging procedure.
In response, Conwin Inc. has encouraged its customers to use air whenever possible. The company makes a balloon inflater that uses 40% air and 60% helium, giving balloons a lift but reducing costs.
Coming on top of rising expenses, the potential ban of helium-filled foil balloons has really gotten the industry hot.
Balloon distributors, retailers and manufacturers have coalesced to oppose the bill. Leading the bunch is the New Jersey-based Balloon Council, which created a website called SaveTheBalloons.com.
Council spokesman Pete McDonough said a coalition of more than 20,000 small businesses and unions is making phone calls to legislators and circulating petitions. McDonough estimates the foil balloon industry generates about $100 million annually in California, and that any ban on balloon distribution would deflate a thriving business community.
“We really believe it’s a silly bill,” McDonough said. “California is not only unique in proposing a ban on these balloons, but it’s also the only state that regulates balloons.”
In 1990, California began requiring weights and warning labels on all helium-filled foil balloons. Under the new legislation, businesses would be prohibited from selling or distributing such balloons.
“It’s more like the balloon criminalization act,” said Barry Broad, a lobbyist representing the Balloon Council in Sacramento. “I hope they don’t charge too many 6-year-olds at their birthday parties.”
Broad’s usual clients include the Teamsters, United Food and Commercial Workers and Unite Here unions, which oppose the bill.
It all began when Sen. Jack Scott (D-Altadena) heard from Burbank Water and Power that about 12% of the annual power outages in Burbank were caused by metallic balloons hitting power lines.
After discovering that utilities statewide had experienced the same problem, Scott in February proposed that anyone selling a helium-filled foil balloon after 2010 be fined $100 for each violation. Foil balloons that are deflated or filled with air wouldn’t be illegal.
The bill’s utility supporters don’t take foil balloons lightly.
Rosemead-based Edison, which serves more than 4.8 million accounts in Central and Southern California, reports 478 outages were caused by foil balloons last year, affecting 161,000 customers. The annual cost of power outages caused by foil balloons is estimated in the hundreds of thousands of dollars, spokeswoman Vanessa McGrady said, but she was unable to give an exact figure.
“Our job is to keep lights on for everybody,” McGrady said. “Enough happens that we can’t control, but keeping ahold of these metallic balloons is something we can do to help keep the lights on for everybody.”
The Assembly Committee on Appropriations is set to consider the bill Wednesday. If it survives, the legislation would face a vote of the full Assembly before heading back to the state Senate.
The Balloon Council says the law would cost California almost $80 million in annual sales tax revenue. However, Scott counters with a different cost: an estimated $120 million or more in annual losses to homes, businesses and energy companies from balloon-created outages.
Scott said he believed his bill allowed ample time for balloon businesses to come up with a viable alternative to the foil balloon.
“Let’s give it two years,” Scott said. “Surely during that time there can be devised a balloon of some other material that can serve this purpose. The auto companies didn’t want seat belts and the paint industry didn’t want to take lead out of their paint. This is just another example.”
(BEGIN TEXT OF INFOBOX)
The proposed fine for each helium-filled foil balloon sold or distributed in California starting in January 2011
How many outages Southern California Edison says were caused by metalized balloons last year in its territory
Southern California Edison customers who lost power last year during balloon-created outages
Estimated lost sales tax revenue each year if helium-filled foil balloons are banned
Estimated sales of foil balloons each year in California
Estimated losses to homes, businesses and energy companies from balloon-created outages