When receiving annual legislative appropriations, state arts agencies (SAAs) sometimes encounter the reality that they have little control over parts of their appropriation, typically referred to as line items. Line items “pass through” an agency’s budget directly to another entity. State and jurisdictional legislatures earmark recipients and amounts, while the state arts agency usually holds little or no influence over how the recipient will ultimately use the money.
Line items present various opportunities for state arts agencies. Line items can be useful for leveraging additional arts dollars and for funding large-scale projects (such as capital construction for facilities) that may fall outside of a state arts agency’s grant programs. Another positive effect can be that legislators get a sense of participation and ownership in arts activities, which some agencies see as a way to bolster more general support in the future.
However, line items also carry significant risks and challenges. Line item funds might not be spent in accordance with SAA goals, and might bypass SAA policies that ensure equity in fund distribution. In extreme circumstances, they discourage arts organizations from working in partnership with their state arts agency, and make it difficult for arts advocates to present a unified message to legislative decision makers. Additionally, recipients of line items rarely have to report those dollars to either the state arts agency or the legislature, making accountability difficult.
For most SAAs that receive line items, another challenge is deciding what type of grantee relationship is appropriate to maintain with line item recipients. Agencies have adopted a variety of strategies:
This table summarizes information on line items that pass through state arts agency budgets, and does not detail data on arts-related line items that go directly to arts organizations or pass through other agencies’ budgets.
For more information on line items, contact Ryan Stubbs.
The policy of the Connecticut Commission on Culture and Tourism (CCT) is as follows: “Organizations that receive legislatively directed funds through the CCT may apply; however, those organizations will NOT receive a general operating support grant if they continue to receive legislatively directed funds in the fiscal year beginning July 1 [of the grant cycle year].”
According to the grant guidelines published by the Florida Division of Cultural Affairs: “In accordance with section 265.286(7)(a), Florida Statutes, should an entity receive legislative funding outside the Review Panel or Secretary of State, that entity shall not be eligible to receive financial support from the Division for the same scope of work within the same fiscal year in which the legislative funding is made available.”
The policy for the Missouri Arts Council states that: “Missouri Arts Council assistance cannot be used to fund organizations receiving line item funding from the state of Missouri.”
The New Jersey State Council on the Arts (NJSCA) does not maintain any formal policy regarding line items. Organizations may apply for all potential grant programs, regardless of whether or not they receive a line item. However, informally, NJSCA takes into account an organization’s access to all state resources in making grant decisions. This can mean adjustments, not elimination, of funding levels for a grant. This has been a difficult topic for NJSCA, since line items provide money for projects, such as capital improvements, that the arts council does not fund.
“Organizations accepting funding via a line item or earmark from the Ohio legislature in the state’s biennial operating budget—either directly or via a third-party or pass-through entity—are ineligible to receive competitive OAC grant awards during the same fiscal year(s).”
According to the grant guidelines published by the North Carolina Arts Council: “Organizations that have a recurring line item in the legislative budget have restricted access to State Arts Resources grants and should call Arts Council staff before applying.”
The policy of the Tennessee Arts Commission (TAC) is as follows: “Grants awarded by the Arts Commission to organizations that receive programmatic budget amendments (‘earmarked funds’ or ‘line items’) from the Tennessee General Assembly shall be reviewed by the Arts Commission, and any proposed grant award from the Arts Commission shall be adjusted as necessary prior to actual payment of the grant in order to prevent double State funding of the same program or event.” Organizations may apply for grants in any category for which they are eligible. Most line item requests are for capital improvements, and TAC reports not having problems with the subject.