{"id":1357,"date":"2014-06-18T06:30:49","date_gmt":"2014-06-18T13:30:49","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1357"},"modified":"2014-06-18T06:30:49","modified_gmt":"2014-06-18T13:30:49","slug":"earmarked-taxes-for-the-arts","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/06\/earmarked-taxes-for-the-arts\/","title":{"rendered":"Earmarked taxes for the arts"},"content":{"rendered":"<p><a href=\"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/charlotte-north-carolina.jpeg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-1363\" src=\"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/charlotte-north-carolina-300x200.jpeg\" alt=\"I admit only having been to the airport\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/charlotte-north-carolina-300x200.jpeg 300w, https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/charlotte-north-carolina.jpeg 630w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Last night Mecklenburg County (where Charlotte, NC is) commissioners <a href=\"http:\/\/www.charlotteobserver.com\/2014\/06\/17\/4985662\/commissioners-approves-sales.html#.U6GMhXddUTE\">voted to approve a referendum<\/a> on increasing the sales tax by a quarter of a cent, some of which would be dedicated to culture: 7.5% of the proceeds to the Arts &amp; Science Council and 5% of the proceeds to the public library.<\/p>\n<p>These earmarked funds for the arts are found across cities and metro areas across the US, sometimes funded by sales taxes (as in Denver or Salt Lake City) but also financed through taxes on motel\/hotel stays, property taxes, tobacco taxes (as in metro Cleveland) or license fees.<\/p>\n<p>Are they a good idea? Arts organizations like them because not only does it give a boost to direct arts funding, but also provides more stability to public arts funding than having to go through the city budgeting process on an annual basis. It is that very stability that sometimes worries public budgeting officials &#8211; if too much of the tax base is earmarked to one spending line or another, the local government begins to lose flexibility that might be highly valued when economic circumstances change. As they will.<\/p>\n<p>For any city or metro area thinking about adopting an earmarked tax for the arts, here are a few things to think about (before beginning the referendum campaign!):<\/p>\n<ul>\n<li>What is it for? Is the goal simply to give a financial boost to an extant arts council, or to fund something new? Is it to expand arts offerings at the community level? Or is it aimed at tourist-friendly cultural organizations? Or is it to fund artistic excellence and experimentation? It&#8217;s not good enough to just say &#8216;the arts should get more funding&#8217;, because ultimately it has to be decided, &#8216;what do we mean by &#8216;the arts&#8217;?&#8217;<\/li>\n<li>Who is it for? This is a tricky question &#8211; most big arts institutions are in cities, but attended by people in neighboring suburban counties as well. Is a tax increase at the city or single-county level best, or should it be multiple counties (<a href=\"http:\/\/scfd.org\/\">as in metro Denver<\/a>)? When metro Detroit had a (failed) referendum in 2002 on a property tax increase earmarked for the arts, Wayne and Oakland counties were included but neighboring Macomb county was not, causing some conflict.<\/li>\n<li>What tax base? Different tax options have different impacts across the income distribution. Given that arts participation skews towards higher income residents, care must be taken to think about whether the revenue source is regressive in its burden (which I why I remain so opposed to lottery revenues as a source of earmarked arts funding). Also note that tax incidence is not simple. Hotel taxes are not simply borne by visitors to the region &#8211; if tourism and the convention business are in competition with other places, then some of the hotel taxes are borne by local residents, who will be driven to cut the prices on rooms. It&#8217;s not that easy to just get all the funds you need from tourists (if that could work, everybody would do it, eh?).<\/li>\n<li>Should it just be for the arts? Science and history museums are typically included in the funding, along with zoos and botanical gardens. The narrower the list of recipient organizations, the smaller the constituency for voting for the tax increase. There is a reason zoos are always included in such funding schemes.<\/li>\n<li>Should organizations get guaranteed funds, or must they apply? Large organizations &#8211; the big local art museum, opera company, symphony and ballet &#8211; will typically want their funding to be automatic, especially if it is known that they would always get funding anyway. But beware of including too many organizations in the &#8216;automatic&#8217; category: if you want innovation in the arts scene that means encouraging entrepreneurs to set up new ventures, and having most of your arts funding locked up in guaranteed funding to extant firms is not a welcoming environment. A dynamic arts scene means the companies you have now should face the prospect of competition. But be ready for their directors not to agree.<\/li>\n<\/ul>\n<p>Academic footnote:<\/p>\n<p>I have written about some of this before, so if you really want to get into it&#8230;<\/p>\n<p>&#8220;Earmarked taxes for the arts: US experience and policy implications&#8221; <em>International Journal of Arts Management<\/em> 6(3) (Spring 2004).<\/p>\n<p>I also did an empirical study of how people voted in that Detroit referendum, not &#8216;big data&#8217; but some not bad &#8216;medium-large data&#8217;: &#8220;Support for earmarked public spending on culture: evidence from a referendum in Metropolitan Detroit&#8221; <em>Public Budgeting &amp; Finance<\/em> 25(4) (Winter 2005).<\/p>\n<p>Will an earmarked tax &#8216;crowd out&#8217; private donations to the arts? Lauren Schmitz has evidence it will not: &#8220;Do cultural tax districts buttress revenue growth for arts organizations?&#8221; in M. Rushton (editor) <em>Creative Communities: Art Works in Economic Development<\/em> (Brookings Institution Press, 2013).<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last night Mecklenburg County (where Charlotte, NC is) commissioners voted to approve a referendum on increasing the sales tax by a quarter of a cent, some of which would be dedicated to culture: 7.5% of the proceeds to the Arts &amp; Science Council and 5% of the proceeds to the public library. These earmarked funds [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":1363,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1357","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/charlotte-north-carolina.jpeg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-lT","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1380,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/06\/summer-books-bruce-katz-and-jennifer-bradleys-the-metropolitan-revolution\/","url_meta":{"origin":1357,"position":0},"title":"Summer books: Bruce Katz and Jennifer Bradley&#8217;s &#8216;The Metropolitan Revolution&#8217;","author":"Michael Rushton","date":"June 28, 2014","format":false,"excerpt":"A dozen years ago, mayors and their economic development staff made sure they had a copy of Richard Florida's The Rise of the Creative Class on their desks. It was the big new idea that would help them understand the dynamics of contemporary urban growth, and plan for the future\u2026","rel":"","context":"In &quot;issues&quot;","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"next big thing?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/metropolitan-revolution-196x300.jpeg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3039,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/07\/on-the-florida-arts-funding-cuts-beyond-the-fringe\/","url_meta":{"origin":1357,"position":1},"title":"On the Florida Arts Funding Cuts: Beyond the Fringe","author":"Michael Rushton","date":"July 3, 2024","format":false,"excerpt":"Last week Florida governor Ron DeSantis vetoed $32 million in arts funding, which in that state is managed and allocated by the Division of Arts and Culture. The\u00a0Miami Herald\u00a0reports: Gov. Ron DeSantis on Thursday cited \u201csexual\u201d festivals in Orlando and Tampa as the reason he vetoed more than $32 million\u2026","rel":"","context":"In &quot;issues&quot;","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1251,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/04\/public-support-for-the-arts-and-the-letter-of-the-law\/","url_meta":{"origin":1357,"position":2},"title":"Public support for the arts and the letter of the law","author":"Michael Rushton","date":"April 28, 2014","format":false,"excerpt":"I was recently interviewed by Nancy Fowler of St. Louis Public radio on the recent controversies surrounding the ethics policies of the Zoo-Museum District. I won't repeat the whole story here, which is best covered in Ms Fowler's piece. This is a more general observation: Public and nonprofit arts organizations\u2026","rel":"","context":"In &quot;issues&quot;","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"dedication","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/slam-300x105.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":377,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/","url_meta":{"origin":1357,"position":3},"title":"Targets, The Cost of Bread, and Nonprofit Arts Pricing","author":"Michael Rushton","date":"February 25, 2013","format":false,"excerpt":"My previous post drew lessons for museum pricing from what we observe in the prices set by cable television providers. But how can for-profit pricing be relevant to nonprofit museums, to orchestras and opera? Don\u2019t the nonprofit arts, unlike cable companies, have a mission to be accessible to all patrons,\u2026","rel":"","context":"With 5 comments","block_context":{"text":"With 5 comments","link":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/#comments"},"img":{"alt_text":"Focus on the target","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/archersDM1304_468x364-300x233.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2724,"url":"https:\/\/www.artsjournal.com\/worth\/2022\/04\/book-diary-april-22\/","url_meta":{"origin":1357,"position":4},"title":"Book Diary &#8211; April 22","author":"Michael Rushton","date":"April 22, 2022","format":false,"excerpt":"I am writing a book, on the \"moral foundations of public funding for the arts\". It will eventually appear in the series New Directions in Cultural Policy Research, hopefully some time in 2023. But first I have to write it. This diary will chart my progress through the year, and\u2026","rel":"","context":"In &quot;issues&quot;","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"my taxes paid for this?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/04\/CO.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/04\/CO.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/04\/CO.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1570,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/10\/tax-deductions-for-artists\/","url_meta":{"origin":1357,"position":5},"title":"Tax deductions for artists (updated)","author":"Michael Rushton","date":"October 7, 2014","format":false,"excerpt":"The New York Times reports on a court case involving whether an artist working for salary as teaching faculty can claim tax deductions of artist's expenses (for supplies, travel, meals, etc) in excess of profits earned on sales of art. My understanding of this (tax people please correct me if\u2026","rel":"","context":"In &quot;issues&quot;","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"operates at a loss","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/10\/Goat.jpg?resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=1357"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media\/1363"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=1357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=1357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=1357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}