The Federal Impact of the NEA's 40% to State Arts Agencies

I’d like to share with you my response to a question asked by Barry Hessenius, former executive director of the California Arts Council, on his blog. It is important for NASAA members to know they can depend upon NASAA as their collective voice to represent and explain the value of the portion of the National Endowment for the Arts (NEA) budget that is allocated to states and regions.

BARRY: By law, the NEA allocates approximately 40% of its funding to the states and regions. Should this formula be maintained or changed?

JONATHAN: The NEA employs two basic methods of distributing its funds to fulfill its mission: directly via national panels and indirectly through state arts agencies. I’ll note four reasons that the 40% of the NEA budget distributed through the 56 states and jurisdictions, and their regional groups, contributes powerfully to congressional support of the agency. One is that the state formula guarantees that a predictable portion of the tax dollars invested annually in the arts by the federal government will go to each state. The NEA is not a foundation. Every senator and every member of the House of Representatives represents constituents who pay taxes, vote, perceive the arts as important, and want to see the federal investment in artistic excellence and access include their district. The distributive principle maintains the NEA’s viability as a government agency just as it does for the federal agencies with responsibility for education, transportation, housing and urban development, the humanities and other public benefits. The most revealing example of the value of the state portion in sustaining congressional support for the NEA was when, in the process of reducing the NEA budget from $176 million to $98 million in the 1990s, Congress doubled the state percentage to its present level. (At the same time, Congress limited allocation of the NEA program budget to no more than 15% to any one state and stipulated that the NEA’s National Council should be geographically representative. This is also about the perception of fairness.)

Second, beyond distribution, the state portion increases the reach and impact of federal arts support. When agency staff and panels at the state level make decisions and provide services to artists, arts organizations and the public with federal dollars, they do so with knowledge of each state’s unique cultural, social, economic and artistic environment. They cultivate means of reaching every corner of their state suitable to each state’s circumstances � including presenter networks, touring programs, arts education programs, state-local government partnerships, and cultural district incentives. Since the NEA requires and approves state plans that must be informed by a public process, must support arts education and must serve the underserved, the state portion of its budget supports a system through which statewide priorities are identified and addressed compatibly with national goals. I should point out that the unique value of the 40% portion continues to be revealed. When the NEA decided that it would directly award American Recovery and Reinvestment Act (ARRA) funds only to recent grant recipients, it meant that in some states only a small number of groups could even apply. The stipulation by Congress that 40% of ARRA funds be distributed through states and regions ensured that jobs in arts organizations would be supported even in areas of the country where arts groups are sparse.

Third, the state portion greatly leverages federal support for the arts, stimulating support for the arts at other levels of government and from private sources as well. At least half of the state arts agencies were started by governors in response to NEA incentive grants in the 1960s and 1970s. Early on, the state portion made up half of state arts agency budgets; now, state legislatures typically allocate about nine times the state portion annually and 2-1/2 to 3 times the total NEA budget � certainly one of the most successful of all NEA programs. It’s important to note that NEA support to state arts agencies is still a quarter, a third, or more of many of their budgets and, especially in tough economies such as we are now experiencing, the desire not to lose NEA state partnership agreement funding provides an extremely important incentive to state governments looking for agencies to eliminate. It’s useful to note as well that state arts agencies have, through the work of their community development coordinators and their grant making, fostered the local arts agency movement. Distribution of local arts agencies is uneven, with some states having a broad and strong network, and other states having few local agencies or limited local investment in the arts. To help strengthen this infrastructure and improve local access to the arts, state arts agencies invest about $39 million in local arts agencies, providing funds for projects, operating and regranting programs for 1,300 local arts agencies nationwide.

Fourth, the state portion supports and diversifies the NEA mandate to advance excellence in the arts. If you exclude California, which has so many arts organizations that both the NEA and the state arts agency support a relatively small number of them, state arts agencies support two-thirds of all NEA grantees � and, on average, with twice as much money. In numerous states � Arizona, Illinois, Rhode Island and Tennessee, for instance � the state arts agency supports between 80% and 90% of NEA grantees. The point is that NEA dollars are being put to work raising the quality of participation in the arts both when the NEA makes grants directly to as many as 700 communities in a given year and when the state arts agencies make grants annually in more than 5,000 communities.

The state portion at 40% of NEA program funds continues to demonstrate its value and to position the NEA for overall budget growth. The state arts agencies are strongly committed to neither decreasing it � which would reduce its value in advancing the mission of the NEA, contributing to congressional support of the agency, and leveraging state arts support � nor increasing it, because we value the national leadership roles of the NEA.

As always, your comments, questions and suggestions are welcome.