Arts Policy News

As March begins, there are several significant arts policy related developments to report.

NEA Chair

First and foremost, President Obama announced his intention to nominate Jane Chu to lead the National Endowment for the Arts (NEA). Chu currently serves as president and chief executive officer of the Kauffman Center for the Performing Arts in Kansas City, Missouri. Chu’s nomination to head the agency comes at a critical time, as the NEA has operated without a chair since Rocco Landesman stepped down in December 2012. The process for Chu’s nomination is still a bit unclear. Over the next few weeks, she is expected to meet privately with members of the Senate Health, Education, Labor, and Pensions Committee, which has jurisdiction over her nomination. Depending on the result of those conversations, Senate leadership will determine whether to expedite the process for her approval.

Tax Code

Also of interest to NASAA and its membership, the long-awaited House Republican proposal reforming the tax code was released last week. The sweeping proposal would make significant changes to the way the federal government generates revenue. Under the plan, overall income tax rates would drop to 10% and 25%. To offset the revenue lost through these lower rates, many existing deductions, including the deduction for charitable contributions, would be altered. Under the proposal, Americans would be allowed to deduct only the amount above 2% of income they give to charity.

This proposal does not come as welcome news to charitable organizations, and the likelihood of it winning support in both the House and Senate is very small. Immediate reaction to the legislation among members of Congress from both parties was quite negative. This is because, in addition to changes to the charitable deduction outlined above, other popular tax provisions like the mortgage deduction would be reduced. The uniform opposition to the plan, along with the fact that 2014 is an election year, means that the charitable deduction as we now know it should be safe for the time being. Nonetheless, preservation of the current statute is among the issues that will be raised during Arts Advocacy Day by NASAA and other arts organizations later this month.

2015 Budget

Also, this week, the president outlined his budget proposal for fiscal year 2015. The plan proposes increasing federal spending by more than $600 billion to fund key administration priorities, including universal preschool programs, the National Institutes of Health, transportation and infrastructure projects, and climate change mitigation and research. While not completely paid for, some of the costs would be offset by imposing a new tax on wealthy Americans and reducing the level of payment for health care providers under Medicaid and Medicare.

In the budget proposal, the Obama administration recommends funding the National Endowment for the Arts at $146.021 million, the agency’s current funding level. Although this number is below the $155 million NASAA and other arts organizations will ask Congress for later this month during Arts Advocacy Day, we are pleased that the administration did not propose a cut in funding, given that sequestration (which statutorily lowers federal spending) remains in effect until fiscal year 2021.

Beyond funding for the NEA, the budget sets funding levels for other programs and agencies of interest to our membership, including the National Endowment for the Humanities at $146 million and the Corporation for Public Broadcasting at $445 million; both figures represent a continuation of current funding levels. The Office of Museum Services would receive a $1-million increase to $31 million. The Obama administration also proposes eliminating the Arts in Education program, and instead proposes that that office be absorbed within the Department of Education. The president has made this proposal in each of his previous budgets, and NASAA will continue to oppose this suggestion when meeting with members of Congress.

It is important to remember that the president’s proposal is not binding, but rather is a policy communication in which the administration identifies its priorities for the upcoming fiscal year. With the proposal released, Congress will now get to work on writing the FY2015 budget.

As this work begins, I encourage you contact members of your House and Senate delegations and urge them to support funding the NEA at $155 million for FY2015:

A NASAA web seminar taking place March 18, Federal Budget Briefing, will inform members about details of the president’s FY2015 proposal and will outline other federal issues relevant to the arts.