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A job-killing plan for arts and culture? [Updated]

January 24, 2011 | 11:13 am

Buro_of_labor_stats If you gave me a buck, and next year I returned $18.75 to you, would you think that was a good deal?

I would. With savings accounts, money markets and even stocks yielding just a few percentage points on investments these days, a return in excess of 1800% is pretty staggering.

Yet, that's what happens with federal support for arts and culture. It pays for itself 18 times over.

Federal support includes partial matches to state arts agencies, underwriting the National Gallery of Art and the Kennedy Center in Washington, the nationwide programs of the endowments for the arts and humanities and much more. My colleague Mike Boehm reports that, all together, federal arts and culture spending currently totals about $1.6 billion a year, not counting construction budgets.

Meanwhile, revenues to federal, state and local coffers related to that spending totals $30 billion annually -- more than 18 times the outlay. The income derives from taxes paid by the 5.7 million workers in the nation's culture industry, many of whose jobs are sustained by federal support.

Pretty good deal -- especially when stacked up against agribusiness subsidies, military expenditures and other corporate financing from Washington.

Nonetheless, congressional Republicans are once again proposing job-killing cuts to the federal arts budget. They aim to slash it, even zeroing out tiny agencies such as the NEA and NEH, as a report last week from the Republican Study Committee proposed. In these scary, economically strapped times, what passes for an argument is their claim that "we can't afford it." But the numbers show the argument is just fear-mongering bunk.

Does all that revenue come directly from federal arts spending? No. Would slashing that spending significantly damage the revenue? Yes. The impact is direct and indirect.

Not only can we afford it, we need it -- for the jobs and the return on the investment that federal arts and culture funding provide. Normally, economic indicators are the last reason to tout the benefits of a vigorous U.S. cultural sector. But with official unemployment figures stuck above 12% in California and over 9% nationally, plus deficits everywhere you look, these are anything but normal times.

If the Republican Study Committee's economic rationale is without merit, it must have another agenda for federal arts and culture cuts. So far, no one in the House GOP has articulated what that reason is.

Recovery in the battered American economy is slow and precarious. Why look an arts gift-horse in the mouth?

[For the record: An earlier version of this post incorrectly said the return was 18%. The correct figure is 1800%.]


Theater David Mamet -- and his bleeped obscenities -- on 'The Simpsons'

Americans for the Arts compiles a National Arts Index

Gay art: The Catholic League responds to commentary on anti-gay bullying

 --Christopher Knight


Photo: U.S. unemployment rate; Credit: Bureau of Labor Statistics


Comments () | Archives (37)

Presenting filtered data in support of preformed "concepts" is perhaps the great American art form. And reflective in our " contemptorary "arts".

Everyone is doing it they cclaim, so justifying their own lies. Right and left, figuring the American people just cant handle the truth. When it is the wingnuts who can't and won't.

Beauty lies in Truth, no matter where she leads. Truth is not lying toward ones own desires.

art collegia delenda est

Even the most Keynesian of economists would have to admit that this is fantasy economics. It would be best for the cause to make rational and objective arguments, although art is rather subjective by nature.

To supposed conservatives who think the above analysis is bunk:

I am a Republican in Georgia, and I always vote for arts funding. While I don't know about the 18x return on federal money, I DO know that the state money in Georgia does return at least 3x in taxes on arts-related subsidies.

Here's some stats for fiscal year 2009:

1) In FY 2009, as part of a statewide study of arts organizations in GA, 98 contractors with the GCA were respondents to the study.

2) While receiving awards totaling only $2,185,503, these contractors created $8,174,538 in tax revenues for the state.

3) This means GCA grants give a 374% return on investment in state taxes alone, as in, for every dollar the state invested in the GCA, it received $3.74.

4) These contractors total income was $190,661,360, spending 94% of it in Georgia.

5) Immediate, beginning-of-fiscal-year costs to the state were only 11% of the GCA's budget for that year, or around $400,000.

6) Georgia is only one of seven states that has a sales tax on ticket sales for non-profit arts and culture organizations.

7) The state's 10th largest employment base are arts and cultural workers.

Here are the Georgia Council for the Arts minutes and PricewaterhouseCoopers study I used to find these facts.



The facts stand: the proliferation of American culture through arts subsidies is not even a moral imperative: it's an economic one.

Joe Blow driving past a concert hall is gonna be a lot more likely to spend money on other things in the venue's area, and is more likely to want to live, thrive, and get a job in that area, and raise children in that area, who will be statistically more likely to do better in their education if exposed to the arts, than if he was driving past a Walmart or a factory.

Heck, he may even want to pick up an instrument himself.

That's not just common sense: it's economic sense.

For those who want to cut the funding take the word "Arts" out of the conversation. Then do the math. This is an industry that enmplyees many, brings back a positive return and also frankly helps the United States run. We use the skill sets learned in the arts in so many different industries it's staggering. Poeple like to frame the arts as if it's elite, frivolous, or extra. It's not true. This is an industry that is integral to our country. Do the math. Do the research. Think.

This makes my head hurt.

So yes, the cultural workers that are partially support by government investment in the arts pay taxes, but to say it is 18x on the return is inaccurate because the government isn't the sole investor. If that were true it would mean that the individual would be paying 1800% tax.... and I'm pretty sure the top tax bracket is 35%. So the direct return on the government’s investment, as the sole investor can only be 35% at the maximum.

What causes the other 1765% return is the investment by other donors and earned income.

So Let’s say an arts org has a 50/50 split between earned and contributed income (typical). So if the total budget for something is $100,000 then it’s $50,000 earned income (tickets, sales, etc) and $50,000 contributed income (grants, donations). Let’s say half is to pay people (this is not unusual) then the most the government is going to get as income tax is $17,500, which means that the government grant would have only been $1000, further that $49,000 was donated through foundations and individuals.

So the government, to make this type of return on investment, is investing 1% of the initial capital in the project and only seeing huge profits, because all of the other money is coming from sources that won’t expect a return. People either buy tickets, merch or are expecting a tax deduction equal to their donation.

But, you’d have to believe that A $100,000 project wouldn’t find a way to be made for $99,000 and that $1000 is crucial to it’s existence (which is not true) for this to be true.

And that kind of bad logic, is why the exuberance isn’t well placed.

Ian, it actually is true. Not for financial reasons, not always, but often for reasons of credibility and momentum.

Like elected officials, artists spend the majority of their time--time that could be better, more productively spent elsewhere and otherwise--raising money. What makes an artist or arts organization attractive to a donor? Having already received grants and raised money. (Same thing that makes a political campaign attractive to donors.) One NEA grant might not fund a show, installation, film, dance, or other project, but it shows that the work is serious, and that essentially goes onto the artist's resume and engenders further funding.

Arts money is direct stimulus. It doesn't sit around; it goes into making work, and those projects spend money. Artists don't just support themselves and other artists. If you're a theater company that gets a grant to put on a production, you buy costumes, buy props, build sets, cater, rent space, move set and props from place to place--you support carpenters, electricians, restauranteurs, real estate, retail, truck rental.

And there's a reason that the neighborhoods that artists move into are the ones that end up gentrified, with property values soaring. Art improves the world around it.

I'm not necessarily defending the 1800% figure here--like others, I'm a little suspicious of the logic and the math--but it's definitely more than dollar for dollar, both in cold economic terms and in cultural/life of the nation terms.

If objective, that most obviously is not true. but artistes are far from objective about anything. New art areas are ALWAYS right next to money neighborhood where their parents live. Originally it was La Cienaga here, right below the hills. Then La Brea, then Santa Monica and Bergamot station has hardly improved their neighborhood, though it is already SM and spoiled. Neither has the Brewery, they have no affect on all on their areas outside their comfy little sheltered domains. Downtown is next to their dads jobs so they can prove their hundreds of thousands of $ was worth something, not.

North Hollywood followed redevelopment money, not creating it. Try moving into the greatest work of art in the West's area, Watts, lets see the money go to real good rather than parents who are in real estate and looking to make a killing. Arts are tied to money, making money for developers and real estate tycoon types, not workers or the public. It takes their own tax exempt donations and feeds it right back, its a win win situation.

Art have done nothing to improve the lives of the we million LA area residents, outside of cultural entertainment for the few. REALLY spread it out, and we can talk. The DCA is an absolute failure, no one knows at the Watts Towers(Nuestro Pueblo) anymore, it was common knowledge when I grew up in teh 70s, and went there often. Those form the LBC do not hid in Neverlands, we live wherever we need and want to go. Though the LBMA does suck, MoLAA has been great.

The money goes to Downtown and the OC arts complex, where few see them but those who go on purpose, it has no affect on those who live there. None. Except more traffic. Start living up to your ridiculous claims and we can talk.

art collegia delenda est

Baloney. If arts and culture is profitable, it will survive without federal involvement. If it can't survive without federal involvement, it's not profitable. That's economics 101.

Using the same train of thought I'm sure the author is against ending oil and gas subsidies as well. After all, it employs approximately 2 million people and surely those workers are responsible for billions of taxes paid annually. Not to mention the costs of permits and severance taxes on the oil companies.

This was sarcasm, if it wasn't obvious enough. Obviously, both industries would be just fine without suckling on the government tit.

BTW, I'm for ending all subsidies to private organizations or individuals (crony capitalism).

Katherine states, "One NEA grant might not fund a show, installation, film, dance, or other project, but it shows that the work is serious, and that essentially goes onto the artist's resume and engenders further funding."

While I sincerely doubt this claim (people don't donate or invest in a cause they don't believe in, regardless who has already gave money to it), she implicitly is acknowledging that the government is picking winners and losers simply by investing in certain productions over others. It doesn't seem fair to me for someone to get government funding simply because of who they know. Which, I'm sure happens all the time. The value of the project should be the driving force if they get the necessary funds to go ahead with it. If you rely on private funding, demand dictates whether you get the funding to go forward. This is far fairer and in the end accurately reflects what the community believes is needed. Plus, if you get the needed funding through fund-raising, you're guaranteed to be successful, because you know the demand is there. What's the point of putting on an exhibition with government money if nobody shows up? Just to get paid?

I'm not going to argue numbers, but I will point out where the money goes... it goes to buy materials, pay personnel, and create the work. It all goes directly back into the local economy. It's presence then entices people to enter that locality and spend money at restaurants, parking garages, babysitters, and other services which help feed even more money into the local economy. Arts spending is stimulus spending. If Mike F.'s argument is applied, then there would be no small business loans, there would be no corporate tax breaks, there would be no breaks for capital gains. Presumably, businesses can't survive without these "incentives" or they wouldn't hurl epithets at people who try to close their precious loopholes. Government spending on the arts works in exactly the same fashion. and it IS returned. Study after study proves it. Google is a wonderful device... it allows you to actually look these things up.

Can someone please back up the claim that the alleged return compares favorably with subsidies for agribusiness, military spending and other corporate financing? And can someone explain how 18x more taxes at the state and local level is perceived as a benefit of taxing and spending at the federal level?

And who makes those "studies'? The art community. They are not valid. they ignore most of the true sources of income, they are far from self sufficent, My job doesnt get any government support, hell our street is so potholed I about lost an axle. We just dont pay taxes when we dont make profit. Far different, non profits should not receive even more support from government than all that tax income lost. If it cant pay for itself, it isnt worth having. The public doesnt support it. And no more than 5% go to these overhyped institutions. It is not for US, it is for the too thin and too rich crowd as amusement. And great for parties.

art collegia delenda est.
As most of the monies are students wasting hundreds of thousands of $ on degrees with no viable futures or skills taught. Its a scam. Its a self absorbed complex of msueo/acadmic/gallery creation, the only thing they have created in teh last 50 years.
Lets seperate the wheat form the chaf, as the nutritious kernels have been lost in all the nutritionless manure. Art is by the strong, not the weak. Manup.

Well, look at it this way: the right-wing ideal is that all effort in America must go for building the wealth of the already filthy rich. Art is food for the intellect and the soul, and since it's bad for the Slave class (i.e, the rest of us)to dwell on these qualities, it's better to withhold art from us -- and keep us focused on serving those whose brains can only count their money -- those for whom "soul" means nothing, just nothing at all.

It's too bad the fed government feels that they have to keep cutting on the art budget. People like me who are artists and craftspeople are also paying a very hefty price as well. I work full-time as an artist and art educator, and I'm debating whether I should just give up, stop being an artist and find a new job outside of art. People are still being very frugal, and not buying art, so it's a chain reaction. The more the arts and crafts are cut, the more damage it does to the art culture and even kids are being discouraged from thinking of careers in the arts. Art does so much more than just create pretty paintings and sculpture and it is capable of reviving dying communites that have a large artist pool. Other parts of the Fed governments needs cuts, not the arts.

They took it away from Americans long ago, by making art into their play thing, a joke, an investment for games and therapy. It is no longer for, by or about humanity, it is a decadent party prop. Its Soul was stripped decades ago in atheistic pseudo intellectual Ivory towers of dummies. The Pharisees of the Temple, who hate prophets who might overturn their money tables. And so artists are abhored, only the patrons who donate to the Temple are idolized in bacchanals of idiotic self worship. Just look at the front pages of Artinfo aand Artforum. Really, Really?

Save the spiritual Watts Towers, tear down the Bastilles of vanity.
Where is the "art"? Not among the people.

The logic in the article goes like this:

1. Government spends $1.6 billion on the arts.
2. People who work in the arts generate 18 times that amount in income,
property taxes, etc.
3. Therefore the return on government’s investment is 1800%.

The only thing remarkable about this piece is that it got past the editors at the LA Times. The logic assumes that every person who works in the arts would be unemployed if the arts didn’t exist. In reality, if the arts didn’t exist, these people would work elsewhere and, in so doing, generate the same income, property taxes etc.

In fact, since the arts tend to pay less than other industries, one could reasonably argue that people currently employed in the arts would earn *more* if the arts didn’t exist and would therefore pay more in income and property taxes. Consequently, the return on the government’s money is not only nowhere near 1800%, but is likely negative.

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