As you've probably heard, the G-20 Summit is taking place in Pittsburgh this week when leaders of the twenty major nations gather to discuss international economic issues.
While President Barack Obama will be meeting with various world leaders, First Lady Michelle Obama will be taking the spouses of those leaders “arts-hopping.” They will visit the Warhol Museum after they've taken in a performance at a local arts school, the Pittsburgh Creative & Performing Arts School for middle and senior high school students where students will perform with such ringers as Yo-Yo Ma, Trisha Yearwood and Marvin Hamlisch.
So far, that's all I've seen of their itinerary. While I'm sure there's more they could go see, I wonder how many of those organizations are struggling to keep their doors open these days but not just because the economy's in a slump (to put it mildly).
As most of you would also be aware of, Pennsylvania has been without a budget since July 1st. That means many organizations that depend on state financing are not receiving their funding to continue operations: this includes libraries and social services as well as state workers who were not receiving their paychecks until a special round-about way of sort of approving part of a budget proposal was implemented to “bail them out,” to use a term becoming increasingly popular during these economic hard times.
While legislators argue about millions of dollars for this or that – how much to cut, how much to increase revenues by – the arts in this state are waiting for word on a fairly insubstantial amount of that money intended to support all the arts organizations across the commonwealth. In July, it was about $14.5 million but, in this latest proposal, seems to have been reduced to $10 million – an improvement over those who wanted to “zero it out” completely. In this day of big corporations and huge spending plans, this is not a lot of money considering the amount of people it can impact.
We now have a budget proposal, one that was reached less than a week ago, but that doesn't mean “we have a budget.” There are still things to agree and disagree about and no matter what kind of consensus brought it about, the proposal is not facing smooth sailing.
To almost everyone's surprise, there's a new wrinkle for the arts.
It's a proposal to add the sales tax surcharge to the price of tickets for arts and entertainment events. In Philadelphia, that would be an 8% tax; in the rest of the state, 6%. Apparently it does not apply to movies or sports events which, frankly, if you're hoping to make some money, would be a fairly obvious solution.
Here are some recent articles and reactions to this new proposal.
In an editorial from Harrisburg's Patriot-News, it is mentioned that Rep. Jake Corman (R-Centre and Republican appropriations chairman) considers adding this sales tax only to “professional” arts organizations and that such a ticket represents “the ultimate discretionary buy,” adding that “people could avoid it if they liked.” (I would imagine they could also avoid seeing the latest block-buster movie at the local cineplex, gambling at the casino or buying smokeless tobacco products, but I digress...)
The proposal expects this to bring in a $120 million in tax revenues. Some argue that some of this money will go into a “rainy-day” fund for the arts, though so far there seems to be no such thing.
Sports events had initially been included in this possible sales tax proposal but in the end were not included in the proposal. Considering that would add another $64 million in tax revenues, it doesn't make a lot of sense to drop it.
As the editorial continues, “Instead of the Steelers and Phillies helping close the budget gap, nonprofit organizations, such as the Pittsburgh Zoo, the Academy of Natural Sciences in Philadelphia and Harrisburg’s Market Square Concerts, seem slated for that.”
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UP-DATE: Dr. William Murray, President of the Board of the Harrisburg Symphony, writes the "As I See It" column in Thursday's Patriot-News.
While he mentions that the expense of book-keeping to account for the tax will tax organizations' already over-worked small support staffs, he doesn't mention that, aside from the tax's adverse impact on potential ticket-sales, the only way these organizations might have to make up the short-fall would be to, what... increase the price of tickets? That's how corporations pass on government taxes, forcing the consumers to bear the burden.
Since Sen. Corman feels such events are "the ultimate discretionary buy," maybe people who find the arts important in their lives should continue to purchase their tickets but reduce their contributions to political candidates?
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This post is also intriguing, from a Philadelphia-base financial blog, “It's Our Money.”
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'Get mad that it was necessary in part because of a big tax break for corporations…one that will cost you and other taxpayers nearly $100 million, the same amount to be generated by the so-called “culture tax.”
'The “Single sales factor “ is essentially a technical change that will mean big bucks for corporations like Hershey Foods and U.S. Steel – companies based in Pennsylvania that do most of their business elsewhere.'
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Check “Save the Arts in PA” for information as well – like Rep. Corman's explanation that this is designed as a “user fee” - or this re-post of Karen Heller's article from the Philadelphia Inquirer, “Who in Harrisburg Needs the Arts?”
There's also this article that appeared in Monday's Philadelphia Inquirer.
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Another area of concern was what arts people viewed as an unfairness in the budget proposal - that it would extend the sales tax to cultural venues but not sports events and movies.
City and state officials said yesterday that applying the sales tax to pro sports teams would be difficult if not impossible, due in large part to past agreements under which the state helped finance new stadiums in Philadelphia and Pittsburgh for the Eagles, Phillies, Steelers, and Pirates.
Barry Ciccocioppo, a spokesman for Gov. Rendell, said no law prevents the state from extending its sales tax to pro sports events. But such a move, he said, would hit those two cities hard.
Here's how: When the state agreed to help finance the new stadiums, the teams agreed, in return, to guarantee millions in annual tax revenue to the state. In the Eagles' case, for example, that is $2.5 million annually.
If more taxes are collected from sports tickets via a sales tax, the financially strapped city would have to pick up the difference, Ciccocioppo said.
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It continues by urging “members of the cultural community to blitz legislators and inform patrons in an effort to stop the tax extension.”
While there seems to be no plan to collect the tax retroactively for tickets already purchased, you might want to consider getting that season subscription before the budget is officially signed and implemented.
(You can read my earlier posts about the Arts Issues with Pennsylvania's budget, here, here and here.)
- Dr. Dick
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