A&E: A hand up for arts and culture-Next step in Cultural Blueprint: boost public funding for strapped organizations

Sep 1, 2006 at 7:34 pm

Words come from Tom Noland’s mouth in rapid-fire succession as he describes current plans being pieced together by area arts and business leaders. He emphasizes certain words and repeats them several times: “Special value.” “Laser focus.” And “sustainable/reliable stream of public funding.”

Over lunch, above the din of cutlery clinking on plates and a soundtrack of 1980s alternative music piped into Jarfi’s Bistro at the Kentucky Center, Noland lays out the strategies he’s overseeing as the new president of Partnership for Creative Economies. The strategies have been several years in the making.

The Partnership arose from initiatives, dating to the 1990s, to promote arts and culture and to secure funding for their non-profit brethren. Nearly 10 years ago, members of several arts and cultural organizations formed the Arts & Cultural Attractions Council. In 1999 it became affiliated with Greater Louisville Inc. The ACA commissioned a report to illustrate how arts and cultural organizations impact the region’s economy, and then began discussions that eventually led to what’s known as the Cultural Blueprint.

By 2003, the ACA — a network of 130 commercial and non-profit arts and cultural organizations — began working with the Louisville Fund for the Arts and gained benefactors (chiefly, the Humana Foundation, Owsley Frazier, the Louisville Community Foundation, National City Bank, Metro Louisville Government, the Louisville Convention and Visitors Bureau and the National Endowment for the Arts) who provided $185,000 for the project.

The Cultural Blueprint Partnership established a task force that included community leaders from the arts, business, education and government. They began examining arts and cultural organizations in Louisville Metro (including Southern Indiana) through community meetings, market studies and telephone surveys. Its conclusion: For its size, the region has a broad array of such groups, and they’re a source of public pride. The findings also indicated that these groups lack the financial resources they need to operate efficiently, which prevents them from growing and better serving the community. The final report also noted that similar organizations in Louisville’s peer cities tend to have more financial resources.

In May 2005, the Cultural Blueprint Partnership published its findings along with recommendations for making changes. The primary recommendation was the formation of the Partnership for Creative Economies, which then started working on several other Cultural Blueprint recommendations. That group includes representatives from arts groups as well as Jefferson County Public Schools, Ford Motor Co., the Portland Museum, The Kentucky Center and Frost Brown Todd LLC.

The Partnership’s mission: “To build a healthy economy for the arts and cultural assets in our Kentuckiana region, including seeking permanent public long-term funding for those assets and increasing cultural tourism.”

Once that was established, the Partnership gave itself three years to reach its goals. Now in its second year, it is moving toward realizing its mission, Noland explains, through the work of three committees.
The first is the case committee. “Their job is, if you will, to make the case for the fact that Louisville’s arts and cultural attractions are absolutely fundamental to the economic health and growth of the overall Louisville economy today and tomorrow,” Noland says.

He calls the second committee the funding committee, and he says it is working to identify reliable streams of public funding — taxes — that could help Louisville non-profit arts and cultural groups.
“The third and final committee, which I call the governance committee,” Noland says without seeming to take one breath, “is the committee that is going to set up the structure, assuming we’re successful, and I think we will be. The governance committee is charged with creating a mechanism whereby the public money is allocated.”

Noland, whose full-time job is senior vice president of corporate communications at Humana, has chaired three meetings of the Partnership’s executive committee since May, when he assumed the president’s role from Todd Lowe, president and CEO of Parthenon Capital Management and president of Actors Theatre of Louisville’s board.

“He’s a businessman, he’s in PR and he’s at Humana. That’s three things that we need,” says Sherry Jelsma, who is Mayor Jerry Abramson’s liaison for the arts and a member of the Partnership. As for arts connections, Noland is on the Louisville Orchestra’s board of directors, and he’s served on the boards of the Louisville Opera and the Kentucky Shakespeare Festival. His wife, Vivian Sawyer, is on the Louisville Ballet board of directors.

Arts and culture as economic anchor

LEO spoke to other members of the Partnership for Creative Economies, and they talked of a future where public funding overseen by an administrative body would cultivate cross-pollination between arts and cultural organizations and community groups. That could include groups from the Louisville Free Public Library to the Ballet to the public schools and even social service agencies.

Examples might be Shakespeare Behind Bars, a prison education program developed by Kentucky Shakespeare Festival artistic director Curt Tofteland, and Louisville Orchestra’s Yum! orKIDStra series, whose January installment will feature local and regional dance groups performing ballet, Irish step dancing and flamenco.

They see these collaborations furthering public access to culture across the region, by bringing people downtown and also encouraging them to participate in arts and culture in neighborhoods.
The crux of the issue is that Noland, Jelsma and the rest of the Partnership members believe a city’s arts and culture can have a huge impact on its economy, even to the point of helping attract new business and new jobs, encouraging educated Louisvillians to stay here instead of taking jobs in other cities and persuading skilled and sophisticated people to move here. Their vision also includes attracting tourists, whose money would filter into the local economy. The ultimate goal is for more money to find its way to the arts and cultural organizations themselves.

This sort of advocacy, increasingly supported by data, has picked up since the culture wars that arose nearly 20 years ago. In the aftermath, lawmakers and the public began calling for more accountability of public dollars allocated for the arts, and by the late 1990s Congress had cut the National Endowment for the Arts budget drastically. Between 1995 and 1996, NEA’s budget plummeted 39 percent, from $162.5 million to $99.5 million, which led to cuts for local and state arts programs and a 47-percent reduction in NEA staff. (In recent years, the NEA budget has increased, but with money strictly earmarked for specific programs.)

After 2001, state arts and cultural agencies began feeling the pinch from the NEA cuts along with a national economic downturn. In Kentucky, for example, between 1996 and 2004, the NEA portion of the Kentucky Arts Council’s budget fell from 18.6 percent to 13.5 percent. The depressed economy of five years ago affected all state programs and often pitted arts groups against social services as states struggled to balance budgets. State allocations to the Kentucky Arts Council declined by 12 percent between 2001 and 2005.
Louisville felt a double whammy, as federal and state money that once supported arts organizations dried up at the same time corporate arts contributions began to fall as local businesses, particularly banks, were bought out by out-of-town companies.

The precarious state of funding has become more evident in recent years with Louisville’s arts community on a rickety rollercoaster track, and the Louisville Orchestra riding in the front car. The orchestra’s funding problems were dramatically illustrated in January when Joe Pusateri, president of the orchestra board, announced it was on the verge of bankruptcy, which forced it to drastically scale down operations merely to stay in business. The related announcement caused unease among orchestra musicians who were mediating a new contract. By April they made concessions to free up money to keep the orchestra operating. Those concessions, coupled with the recently announced return of Maestro Jorge Mester as the orchestra’s new music director, have encouraged confidence among community leaders.

Even before January, however, the Partnership knew that Louisville’s largest arts organizations — Louisville Orchestra, Kentucky Opera, Louisville Ballet and Actors Theatre of Louisville — were struggling to balance their budgets. Six months before the Partnership established itself as a 501(c)3 organization, Cultural Blueprint participants set out to secure $5.4 million from FY 2006 to FY 2008 (or $1.8 million annually) for the organizations through contributions from local and state government and the private sector. By mid-2006 the Partnership had received pledges to achieve that. The money, allocated as “transition funding” (some call it “gap funding”), is designed to give the organizations time to reorganize themselves and find ways to reduce funding needs as they await a reliable stream of public funding.

(Partnership members stress that their vision is not another Fund for the Arts, which is a non-profit funding mechanism for 15 Louisville arts groups. The Fund also provides grants to other groups, but only 3 percent of its funds go to visual arts. Most of the private money it raises and distributes comes from corporations and employee campaigns. Partnership members distinguish the Fund from what they are advocating, which would be an organization that could ultimately distribute public funds among hundreds of non-profit arts and cultural groups and even individual artists across the metropolitan area.)

Pedal to the metal

Meanwhile, whether the Partnership can secure public funds for arts and cultural organizations depends on its ability over the next year to convince local and state lawmakers that these things are an economic driver in Louisville. Under the Kentucky constitution, local governments cannot institute new taxes or earmark portions of existing taxes without supporting legislation.

In the next four months, before the next Kentucky General Assembly, Partnership representatives will organize the information it has gathered about Louisville’s cultural landscape and the organizations that contribute to it, and also look at what other cities have done to develop such public funds. (This month the Partnership hopes to decide how much money is necessary to achieve stability.) It has begun examining what taxes have been implemented in other cities, and what obstacles arose in getting supporting legislation approved. They will then be prepared to begin speaking with Kentucky lawmakers and hearing their ideas.
(While current efforts are focused on Louisville, the Partnership’s ambitions extend across the Ohio River. Members have spoken with Southern Indiana arts, business and civic leaders to begin identifying ways to help with public funding there. Members note the recent merger of the chambers of commerce from Floyd and Clark counties as an encouraging development.)

Part of the Partnership’s research involves GLI’s upcoming annual trip (Greater Louisville Inc. Development Expedition, aka GLIDE) to Denver from Oct. 22-24. (Representatives from Louisville’s arts community will take an advance trip from Sept. 10-11 to coordinate speakers from that city’s arts community to meet with the GLIDE delegation, which includes Mayor Jerry Abramson.)

Denver established a sales tax to benefit arts and culture in 1988, six years after Colorado killed financial support for the city’s art museum, botanical gardens, natural history museum and zoo. Today, the tax, which covers seven metropolitan counties, provides more than $38 million annually to hundreds of scientific and cultural organizations (from the Denver Art Museum to small theaters) through a .1-percent retail sales tax (or 1 cent for every $10 purchase). A 10-member board of directors of the Scientific & Cultural Facilities District administers the distribution of the proceeds from the tax. The arrangement seems to have pleased voters, who reauthorized the tax in 1994 and 2004.

Currently, Noland says, the Partnership isn’t advocating for a definitive way of collecting public funds, nor does it have a proposal for an administrative body and how it would function. The public funding could be a combination of taxes that satisfy taxpayers, he and other Partnership members say, while meeting the needs of the intended recipients and bolstering the local economy. That could include sales taxes, bed taxes or admissions taxes or some combination.

They say they are dedicated to finding a public revenue stream for visual artists, who, by the nature of their vocation, work independently and don’t enjoy the benefits of non-profit status in the marketplace. One possible method of support would be a percent-for-art program, which would garner a guaranteed percentage of capital budgets from publicly financed projects, and earmark it for the acquisition of public art. (Percentages vary in cities with such programs. In San Jose, Calif., for example, 2 percent goes toward public art projects. In Atlanta the calculation is 1.5 percent. In most cities, including Charlotte, Los Angeles, Oklahoma City, Philadelphia, Phoenix and Tampa, it’s 1 percent.)

The Partnership’s goals and its timeline may seem ambitious, but it’s worth noting that such legislation has been authorized in a reasonable amount of time elsewhere. Graduate students at Carnegie Mellon University’s H. John Heinz III School of Public Policy and Management examined 15 local tax policies and found the average time from concept to implementation was 18 months.

Partnership members with whom LEO spoke are confident that they can persuade the public and its representatives at the state and local levels to buy into in their vision and allocate money to stabilize, and grow, arts and cultural amenities in Louisville. A few also acknowledged that the Partnership’s plans could be waylaid by politics.

Currently the level of political will needed to accomplish such goals is in question. Success will depend on myriad forms of support — from the General Assembly’s Jefferson County delegation to Gov. Ernie Fletcher to Louisville Metro Council members to, especially, the Metro Mayor.

Come November, that’ll either be Abramson or Kelly Downard. But at this point, no one expects the issue of arts and cultural organization solvency to be a prominent election issue, because it involves taxes, which rarely helps politicians when voters go to the polls.

Many from the arts and cultural community hope that Abramson, if reelected, will then support the Partnership and its efforts, but a few point out that support is not a given, as Abramson has been conspicuously absent from the Louisville arts scene. (His absence at two Louisville Orchestra press conferences since March has been noticeable.)

Coalition building
This summer, leaders in Milwaukee began discussing a seven-county sales tax to support art and culture. In April, San Diego County released a study saying that citizens are willing to pay additional taxes to support the same.

The types of taxes already working run the gamut. Nearly half of hotel taxes garnered in Austin go to the city’s Cultural Fund. In Seattle, 20 percent of proceeds from a 5-percent tax on admissions to entertainment and sports facilities goes to the city’s Art Fund. In St. Louis, a portion of property taxes is earmarked for the city’s zoo, art museum, history museum, science and natural history museum and botanical gardens. This November, voters in Cuyahoga County, Ohio (Cleveland) will vote on increasing the cigarette tax by 30 cents a pack, which would be in effect for 10 years and raise a projected $20 million each year for the artists and arts organizations.

The Denver and Pittsburgh metropolitan areas do it through sales taxes. In the early 1990s, Pittsburgh needed to create more fiscal resources as city-dwellers migrated to the suburbs, thus starving the city (and its arts and culture) of tax revenues. In 1994, the Pennsylvania legislature approved a law establishing the Allegheny Regional Asset District, which receives 1 percent of the county’s sales tax. Half of the earnings goes to county and city governments, with the rest distributed to civic, cultural and recreational organizations, including libraries, parks and sports facilities. In 2006, the tax earned a total of $74.6 million, with $6.7 million (9 percent) going to arts and cultural groups. The law requires that all organizations receiving funds operate without a deficit and reach a broad audience of taxpayers.

Marc Masterson, artistic director at Actors Theatre, was working in Pittsburgh when the Allegheny Regional Asset District came into being. (He was founder and chairman of the Greater Pittsburgh Arts Alliance, now the Greater Pittsburgh Arts Council, and was producing director of City Theatre in Pittsburgh.)
“A certain part was born out of a fiscal crisis,” he says, noting that Pittsburgh was on the verge of bankruptcy and was pushing nearly all of the costs of arts and culture off the city’s ledger. At the same time, there was a strong political will among city, county and state lawmakers to make a change to significantly help Pittsburgh. There was, Masterson says, a “great deal of coalition building” among civic and cultural leaders.

“When organizations started finding their common ground, that’s when everything started to happen,” he says, adding, “It didn’t hurt matters that the newly elected mayor had come from the state legislature.”

Common ground
Common ground — where arts and culture take on a more prominent and vibrant role in the economy and in everyday lives throughout the community — is not found only on balance sheets and amid policy discussions. There is common ground where our arts and cultural institutions and artists remind us of our humanity, our desires, our fears and our promise, as individuals and as a community. There they expand our capacity for empathy and build social bonds.

“They can make us grow as people, make us more humane and more human both at the same time,” says Noland.

But nurturing that common ground, Noland and other Partnership members say, won’t come from simply exposing arts and culture to the brute forces of the marketplace. In the end, arts and culture may spur economic opportunities, but they are not businesses. They are not something a truly thriving culture can do without. From the Renaissance through modern times, civilizations have survived and grown in large part because of charitable giving to arts and cultural initiatives. Even in the United States, most non-profit arts organizations require 40 percent to 50 percent of funding from benevolent sources.
The payoff, they say, could last long into the future.

“Our view is that if we can accomplish these,” Noland says, “we will have created a legacy for our children and our grandchildren and for Louisville in general that more than justifies the effort that we’ll expend to achieve it.”

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