Friday, October 9, 2009

Update on Arts Sales Tax and State Budget

Well, it now looks like at long last Pennsylvania has a state budget deal, 100 days+ into the fiscal year. Still being worked out are the mechanics for how it will get approved and some minor differences between the House and Senate bills, but it appears to have support from the House, the Senate and the Governor, so barring any last minute glitches, it should be enacted, it is just a question of process and timing.

The good news is that the arts tax is NOT in the budget.  However, none of the alternate taxes discussed (cigars, smokeless tobacco, natural gas) were included in the budget deal, so the final budget does include some significant cuts on the expense side. The total state budget is down by $500 million due to declining revenues, so needless to say that means many expenses are being cut. The arts areas of the state budget have been on a seesaw throughout this budget process, eliminated in one version, restored in another, cut severely in yet another. How did we end up now that the pendulum appears to have stopped swinging? Below are the numbers as reported today by the Greater Philadelphia Cultural Alliance.

The Pennsylvania Council on the Arts will see its administrative budget cut from $1.2 million to $992k (24%). Grants to the Arts will be cut from $15.2 million to $11 million, a cut of 28%. There is also a line for "Cultural Preservation Grants" in the Executive Offices budget at $3.1 million. This is a new category and it appears it is a repository for preserving some support for nine museums previously supported under the Pennsylvania Historical and Museum Commission, as well as other cultural organizations yet to be named (see below).

The Pennsylvania Historical and Museum Commission's General Government Operations budget is down to $19.5m  from $25.8m last year (this $ goes towards operating state-owned museums and historic sites). Museum Assistance Grants are down to $1.8m from $3.8m last year. The so-called "Non-preferred line items" are all at ZERO. Here is what was supported through these grants last year in Philadelphia: UPenn Museum $329k; Franklin Institute $713k; Academy of Natural Sciences $437k; African American Museum $333k. My understanding is that these groups are not actually being totally zeroed, but are now  in the "Cultural Preservation Grants" budget, but at levels that may be down 50-75% from their levels last year. 

The Department of Community and Economic Development has also been an important source of support for cultural-related programs and activity. Here is what happened with DCED: Cultural Exhibits and Expositions: zero ($5.5m last year); Marketing to Attract Film Business: zero ($489k last year); Tourism -- Accredited Zoos: $1.2m ($2.2m last year); Cultural Activities: zero ($3.4m last year). Some cultural groups had been supported through a line called "Community Revitalization" - also zeroed in this year's budget.

In the Education budget, the Governor's Schools of Excellence, which included $ for the Governor's School for the Arts, has gone to zero from $3.1m last year; Non-State Related Universities and Colleges -- University of the Arts: $271k ($1.2m last year)  Professional development for the arts is in at $346k, level funding. Public Television funding will plummet, from $8 million to $1 million, affecting both WHYY and MiND in Philly.


Clearly, this is very much a "good news/bad news" scenario. The "arts tax" has been removed, and that is a good thing, and PCA has been preserved, which is also a good thing, but on the expense side the arts funding areas of the budget have seen some pretty significant cuts, and that of course is bad. Needless to say, there was no guarantee that even with an arts tax, the cultural funding budgets might not have been exactly as outlined above. And there is no proof that arts funding was in any way singled out for punishment because of the sharp outcry to the arts sales tax. Cuts of this magnitude were on the table before the arts tax was even raised, and many other areas of the budget are also being cut. Preliminary conversations I have had with some folks in the arts community indicate that many leaders feel that if there had to be a trade-off, some level of funding reduction is preferable to the arts tax - this feeling is especially true at larger institutions that would have been hard hit by the tax, but are not non-preferreds (or have other large line item state funding) and therefore get relatively modest money from PCA.  Many of the non-preferreds and other groiups that had been getting significant dedicated funding will find their budgets and operations very hard hit by these significant cuts. Groups benefiting only from PCA grants will see a more modest impact.

Also much discussed within the film community is that the film tax credit funding is in the budget at the same level as the existing obligations to films already shot or already committed. What this means is that no incentives can be offered to any new productions, leading to fear that there will be a virtual freezing of film production over the next year, as productions will seek other communities that are offering incentives.

Apologies for another long post, but I thought it was important to convey this information. It is also important to note the the elimination of the arts tax from the budget is the result of a massive statewide (and even national) advocacy effort, of citizens, parents, audience members and cultural workers making their voices heard. And all those voices would have just been noise if not organized into a cohesive chorus by Greater Philadelphia Cultural Alliance and the other advocacy groups in our region and around the state.

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