THERE is often talk of killing the goose that lays the golden egg.

Edinburgh's status as the Festival City and its great fortune since Rudolf Bing led efforts to create a great artistic bulwark in favour of international co-operation and peace after the Second World War has seen international acceptance of its front-line role in the world's arts.

Since day one in 1947 until the latest report on the economies of the city's Edinburgh International Festival and its offshoots there has been a constant tension between two undeniables - that the annual artistic invasion brings in much welcome cash for the city's businesses, and councillors faced with tough decisions on schools and bin collections struggle with the subsidy concept.

In truth, for more than half a century the city juggled a resentment from its burghers that was not all that attractive, whingers who moaned about the influx of foreigners in the creation of the world's greatest arts festival in their midst.

That view has changed but bubbles under the surface of a city in which many love their festival inheritance while others are surly and resentful. Some believe that the energy released by last year's independence referendum campaign might unleash a fresh attitude to August's arts explosion.

So are we to believe the latest apocalyptic vision in the updated report by the Festivals Forum? Forgive us if we fail to flinch under the absurd monicker Thundering Hooves 2.0. In 2006 the predecessor report said the Edinburgh Festivals were on their last legs. Manchester was about to become the UK's biggest festival. It did not happen, nor will it happen soon as that council too faces the usual demands.

The latest report in particular warns that Edinburgh is approaching a "fiscal cliff" as public funds are under threat and that its 12 festivals are "behind the curve" in its digital offerings.

It warns that "if current investment into the world class programming of Edinburgh's festivals is not maintained, their Premier Division status is at risk of relegation". We agree, but only within realistic bounds. Local authority and general public spending is going to be so constrained for at least a decade that we are into a different game.

As The Herald reports, there is now stronger than ever pressure for a hotel bedroom tax. When we go to Berlin or Washington does a small hotel supplement put us off? Would it be so damning here that a whole wave of tourists would stop coming here? We need in-depth research on the subject and the likely impact.

What is true is that councils, however willing, cannot pump money into festivals these days. More collaboration is inevitable, both within and between cities, but the truth is that local authorities will be severely constrained. It is time to innovate.