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Arts & Culture in Pennsylvania's FY2010 Budget

(October 9, 2009) Pennsylvania’s FY2010 budget has some good news and some bad news for the Commonwealth’s cultural community. 

State governments, like all sectors of the economy, have been hit hard by the national recession, and Pennsylvania is no exception.  Declining revenues and a difficult economy forced the state to create a leaner FY2010 budget, down $500 million from FY2009’s total of $28.3 billion.  This has led to cuts in many areas, including arts and culture.  This article outlines the status of arts and cultural funding in the recently-adopted FY2010 budget. 

THE ARTS TAX

A plan first announced on Friday, September 18 to extend the state’s sales tax (8% in Philadelphia county, 7% in Allegheny county, and 6% elsewhere across the state) to include arts, culture, and entertainment was met with vigorous opposition by cultural advocates statewide.  This proposal, an effort by lawmakers to generate an additional $100-120 million in revenue, was defeated with the PA House’s passage of revenue bill 1531 on Wednesday, October 7, subsequently passed by the Senate and approved by the Governor.  House Bill 1531 does not contain the “arts tax,” a major victory for the state’s cultural community.    

EXECUTIVE OFFICES

The Pennsylvania Council on the Arts (PCA), will see its administrative funding fall from $1.3 million to $992,000 (-24%) and its Grants to the Arts funding drop from $15.2 million to $11 million (-28%).   PCA’s Grants to the Arts appropriation, which reached a height of $15.4 million in FY2002, will be at its lowest level in a decade.

A new line item, “Cultural Preservation Grants,” appears in the Executive Offices in FY2010.  It contains funding for nine museums previously supported via line items under the Pennsylvania Historical and Museum Commission (see “Pennsylvania Historical and Museum Commission” section below for further explanation).  The Cultural Preservation Grants appropriation of $3.1 million in FY2010 will support those museums, the Heinz History Center, and other cultural organizations to be determined.

Support for Public Television will also drop, from $8 million to $1 million (-88%).  This funding supports a network of eight public broadcasting companies across Pennsylvania, including WHYY and MiND Media (WYBE).

DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT (DCED)

There are at least six lines in DCED that impact arts and culture.  All have been cut in FY2010.  Cultural Expositions and Exhibitions, Marketing to Attract Film Business, Film Grant Program, and Cultural Activities have all been zeroed out.  These lines were previously funded at $6.3 million (FY2009), $576,000 (FY2009), $5 million (FY2008), and $3.8 million (FY2009), respectively.  

Support for Zoos, through a DCED line entitled “Tourism – Accredited Zoos,” drops from $2.2 million to $1.2 million (-45%).  Community Revitalization, a line previously funded at $40.2 million, some of which supported cultural organizations, has also been zeroed out in FY2010.     

EDUCATION

Professional Development for the Arts will be maintained at level funding of $346,000 for FY2010.  Public Library Subsidy funding has dropped from $75.9 million in FY2009 to $60 million in FY2010 (-21%).  Appropriations for the Governor’s Schools of Excellence, including an arts program, have been eliminated for FY2010, a loss of $3.2 million.  State support for the University of the Arts will also drop, from $1.2 million in FY2009 to $271,000 in FY2010 (-77%).

PENNSYLVANIA HISTORICAL AND MUSEUM COMMISSION (PHMC)

Museum Assistance Grants, a competitive grant program for museums across the state, will see its appropriations drop from $3.8 million in FY2009 to $1.8 million in FY2010 (-53%).  PHMC’s General Government Operations funding, which enables it to maintain a network of state-owned museums and historical sites, will see a reduction in funding from $25.8 million in FY2009 to $19.5 million in FY2010 (-24%).  

Funding for a group of nine individual museums, commonly known as “nonpreferreds” because of the nature of their line items’ structure, will be transferred to the Executive Offices under a new line entitled Cultural Preservation Assistance.  In FY2009, funding for the nonpreferreds totaled $2.7 million.  Cultural Preservation Assistance will receive an appropriation of $3.1 million in FY2010, which will support these museums as well as the Heinz History Center and other cultural organizations to be determined.  How much support for individual museums funded under this new line will drop in FY2010 is not yet known.

EDUCATIONAL IMPROVEMENT TAX CREDITS (EITC)

Cultural organizations often access EITC funds to support programs in Pennsylvania schools.  In FY2010, the total amount of funds available via EITC will drop to $60 million (-20%), and to $50 million in FY2011.  In FY2009, approximately $75 million in funds was available through the EITC program.

In 2008, More than 100 nonprofit organizations from Southeastern Pennsylvania participated in the EITC program.  Nearly one-third of them were cultural organizations.

FILM PRODUCTION TAX CREDITS   

The cap on tax credits available for film production will also drop this year, by an amount similar to the EITC program.  The film production program offered $75 million in tax credits in FY2009.  For FY2010 the cap will be set at $42 million (-44%), and it will increase to $60 million in FY2011. 

The film tax credit program provides a 25% transferrable tax credit to film productions for which 60% of the budget is spent within the state.  Enacted in 2007, it is estimated to have helped draw more than $300 million in film productions to the Commonwealth, and to have supported more than 4,000 jobs in Pennsylvania.