Legislative Update

Congressional Panel Considers Economy’s Impact on the Arts

Across the country, the current economic crisis is creating hardships for arts organizations struggling with declining budgets, job losses and lost sources of revenue, according to witnesses testifying before a congressional committee on March 26. The hearing, convened by the House Education and Labor Committee, is the first in a series planned to examine how the economy is affecting jobs in the arts and music industries, and the role these industries play in communities in the United States.

At the opening of the hearing, committee chair Rep. George Miller (D-CA) cited recent research conducted by the National Endowment for the Arts (NEA) indicating that unemployment in the arts rose at a higher rate than in the overall work force in 2008. “In fact,” Miller said, “the unemployment rate for artists is double that of other professional workers. In the last quarter of 2008, the unemployment rate for artists grew by 64%—for a total of 129,000 displaced workers.

“Arts and music organizations are facing tough realities, which has a multiplier effect on workers and communities who rely on these sectors to create jobs and generate local revenue,” Miller went on to say. “These are industries that can help breathe new life into communities, towns and cities, spur economic growth and help us build a stronger America. . . . Their contributions to our economy are frequently—and unfairly—overlooked.” The California legislator stressed that in his home state, as in many others, “the arts and music industries are vital engines for local economies—making up a large share of revenue and providing many employment opportunities.”

Testimony from John Thomasian, director of the National Governors Association (NGA) Center for Best Practices, highlighted the national impact of the arts on the U.S. economy, focusing on the recent NGA Center report, Arts & the Economy: Using Arts and Culture to Stimulate State Economic Development, which was cosponsored by the NEA with research assistance from NASAA.

Thomasian explained that “governors are taking action to develop creative industries by supporting businesses and entrepreneurs; partnering with universities to train creative workers; encouraging collaborations between artists and traditional industries; improving local development by incorporating arts into community planning; and attracting tourists to their states by promoting cultural assets and products.”

He reported that conservative estimates of the number of workers employed nationwide by arts and culture-related industries—the “creative industries”—amount to more than 612,000 arts businesses employing nearly 3 million workers. However, when a broader definition is applied to encompass those whose economic function is to create new ideas or creative content, some 40 million Americans are identified as part of the “creative class,” or 30% of employed people.

Thomasian’s testimony identified strategies promoted by governors and their state arts agencies to foster arts and culture and tap into the resulting economic benefits, recognizing the impact creative industries have on state economic development. He cited, among others, the Massachusetts Cultural Facilities Fund, created as part of a major economic stimulus bill to increase investments in the planning and development of nonprofit cultural facilities; and New Mexico’s Fiber Arts Trails, which promote the state’s heritage while boosting tourist traffic and creating opportunities for New Mexican artists.

Other hearing witnesses underscored the dramatic impact of the current economic crisis on the nation’s arts organizations. Bruce Ridge, chairman of the International Conference of Symphony and Opera Musicians, identified several orchestras across the country, including Baltimore, Honolulu and Cincinnati, which are faced with serious financial challenges, forcing many to cancel seasons or close their doors. The Utah Shakespearean Festival’s education director, Michael Bahr, pointed to the $35 million in local revenue generated by the theatre’s productions as having a “positive economic impact far beyond the theatre.” However, sales in 2009 are already 20% behind last year’s sales, he said, three full-time and 55 seasonal positions were cut, and the summer and fall seasons were reduced by one week.

Michael Spring, director of Miami-Dade County’s Department of Cultural Affairs, testified that more than 1,000 arts businesses help to employ 23,000 workers, and that 12 million attendees spend more than half a billion dollars in ticket purchases to contribute to the economic vitality in the Florida county. Although the current economic crisis has hit the area particularly hard, the Department of Cultural Affairs was spared spending cuts while the county’s overall budget was reduced by more than $200 million. Spring testified that local elected officials, business leaders and the public understand the value of the community’s cultural activities to the local economy.

Tim Daly, actor and co-president of the Creative Coalition advocacy organization, talked about the extensive impact of the entertainment industry on a community, taking into consideration employment of the large number of support staff and behind-the-scenes labor and talent required for movie and television productions. He urged congressional legislators to continue with strong support for the not-for-profit arts sector; to promote arts education; and to recognize how the arts are “interwoven with engineering, with innovation, with technology, and these creators are part of our economic and cultural main course.”

Testifying on behalf of Americans for the Arts, Robert Lynch, the advocacy organization’s president, told the committee that his group’s research “estimates that 10,000 of the nation’s nonprofit arts and culture organizations are at risk of closing their doors in 2009, a loss of as many as 260,000 jobs.” He also warned that the arts are losing their market share of business support: “In an effort to achieve more measurable results from their philanthropy, more businesses are reducing their charitable focus to a single funding category, such as health or education. This single-focus giving rarely focuses on the arts.”

Joanne Florino, executive director of the Ithaca, New York-based Triad Foundation, focused her testimony on the importance of individual giving to the arts, and urged Congress to reject the proposal put forth by President Obama to limit the value of the itemized deduction individuals receive for making charitable gifts. She suggested that the change in tax law “could have a chilling effect on a significant portion of private giving—particularly as it relates to arts organizations.”

Also appearing before the committee were two members of Congress, Rep. Louise Slaughter (D-NY) and Rep. Rob Bishop (R-UT). Slaughter, co-chair of the Congressional Arts Caucus, explained how the arts “create a hub of economic activity that helps an area become an appealing place to live, visit and conduct business. . . . These industries also create jobs, attract investments, generate tax revenues and stimulate local economies through tourism and urban renewal.” Bishop focused his comments on his opposition to the Obama tax proposal, suggesting that Congress should take the opposite approach and look for more ways to encourage charitable giving.

Artists and Arts Organizations Are Included in National Service Bill

Legislation passed by the U.S. Senate and the House of Representatives at the end of March would create a voluntary service corps of artists and musicians to serve in schools in low-income communities and in health-care, therapeutic and other community settings. The new provisions were made part of the Edward M. Kennedy Serve America Act, which would expand national and community service programs, tripling the number of AmeriCorps service volunteers from 75,000 to 250,000.

The new authority to include provisions for support of artists in the national service program responds to a campaign pledge made by President Obama to create an “Artists Corps” of young artists trained to work in low-income schools and their communities. A similar program was proposed by NASAA and other arts advocacy organizations in our recommendations to the transition team for the incoming Obama administration. Passage of the national service legislation to support nonprofit organizations in working with community volunteers has been a high priority for the new president.

2010 Federal Budget Update

Before leaving for spring recess, the House and Senate passed their respective versions of a budget resolution to guide spending decisions in appropriations bills for fiscal year 2010. Even though the Obama administration has yet to produce a budget plan for the coming year—it is not expected to arrive on Capitol Hill until early May—the budget committees in both legislative chambers have moved ahead with their proposals.

Both House and Senate committees have voted out a budget resolution which endorses spending at $3.5 billion, compared with the president’s budget total of $3.6 billion outlined in February. Each chamber would cut back on non-defense discretionary spending, the very category from which federal arts funds are drawn. However, in a recent New York Times article, Rep. Norm Dicks (D-WA), who chairs the House Interior Appropriations Subcommittee with jurisdiction over funding for the NEA, revealed that the Obama administration is considering a proposed budget request of $161 million for the NEA in FY10, $6 million above the current year’s budget of $155 million. Dicks told the newspaper that he would like to approve an arts funding budget at $170 million. The process continues.