Governor Rendell Presents the FY 2010-2011 State Budget

Though it seems that the dust has barely settled from last year's budget impasse, Governor Rendell took to the podium at a joint session of the PA legislature to present his proposal for the FY2010-2011 state budget.

The budget, as Rendell proposed, tops out at $29 billion, and relies on $2.7 billion in continued federal stimulus money.  In particular, Rendell asked the General Assembly to to rewrite the state's sales tax structure, reducing it from 6 to 4 percent, but making it apply to a host of products and services that have been tax-free.  New taxes would be imposed on cigars, smokeless tobacco, and natural gas.   As it stands, non-profit cultural institutions would still be exempt from the sales tax under his proposal, but as always, we'll be watching this one closely.  For-profit cultural institutions will be subject to the state sales tax. (Other services of benefit to arts and culture will be subject to the sales tax, and we'll flesh those out below.) The revenue from these tax changes would be placed into a "Stimulus Transition Reserve Fund."  Other measures Rendell proposed were to cut the state's Corporate Net Income tax paid by some businesses from 9.99 to 8.99 percent, while also eliminating what is known as the "Delaware Loophole" - a provision that allows companies to shelter profits from Pennsylvania taxes.   The budget was not immune from cuts, and many arts and cultural related programs saw their funding decrease.  They are as follows:

• The Museum Assistance Grant program through the Pennsylvania Historical and Museum Commission is proposed at zero.
• Funding for "nonpreferreds" - a group of museums that include many Philadelphia area institutions - have been proposed at zero.
• Funding for public television is proposed at zero.
• Funding for zoos is proposed at zero. 
• Funding for non-state related universities is proposed at zero.
• Funding for arts professional development training in the Department of Education is proposed at zero.
• Funding for arts grants at the Pennsylvania Council on the Arts has been reduced to $10 million from $11 million, and administrative costs have been reduced to $982,000 from $992,000.
• The state public library subsidy has been reduced to $58.8 million from $60 million.
• While Rendell's proposal to lift many exemptions on the state sales tax does NOT include non-profit cultural institutions, it does include for-profit legal services; advertising & public relations; for-profit arts and cultural institutions; concessions; tourist promotion agencies; recreational parks, camps, & campgrounds; and many more.  (The full list of exemptions proposed to be lifted is here.)

  The full text of the budget can be found here.  The full text of the Governor's budget address can be found here.   The budget process does not end here.  It will now be dissected, debated, and likely adjusted by the General Assembly before its final passage.  The Cultural Alliance will continue to keep you up to date on the FY2011 budget process - and give you ways to take action on cuts to arts and culture in Pennsylvania.  While Governor Rendell placed much emphasis on finishing the budget by June 30, there's no doubt we're still preparing for a long few months ahead.