How the arts fared in Arizona’s budget crisis

[Source: Robert C. Booker, Executive Director, Arizona Commission on the Arts] —  After a legislative session that began and ended amidst much uncertainty, the bill containing the Arizona Commission on the Arts budget was signed into law by Governor Jan Brewer on July 1, 2009.

Some of the Arts Commission’s funding streams are interest-bearing (ArtShare Endowment) and fee-based (Arts Trust Fund); thus staff will need a few days to sort out precisely how the legislative reductions will affect the total fiscal year 2010 arts budget.  This much is certain: as a result of legislative reductions and the market downturn, the Arts Commission’s overall budget will be reduced by approximately 42% for fiscal year 2010.

Some of the key arts-related items from the enacted fiscal year 2010 budget follow:

  • The Arts Commission’s general fund appropriation was reduced by 54% from fiscal year 2009.
  • The enacted general fund appropriation – now $956,100 – is sufficient to match Arizona’s annual federal arts allotment as administered by the National Endowment for the Arts.
  • The ArtShare Endowment principal – $20 million at full funding and built over the course of 12 years – has been cut in half from fiscal year 2009.  The endowment corpus now stands at $10 million. Interest payments on the remaining endowment principal continue to underperform.
  • The Arts Trust Fund was not reduced, though decreased receipt of Arizona’s small business filing fees means the fund will pay out less in fiscal year 2010.
  • The Arts Commission has now sustained losses equivalent to twice the sum of its annual budget.  At the beginning of fiscal year 2009, the Arts Commission had an annual budget of $5.8 million.  Over the year, the agency sustained losses of nearly $12 million as the state attempted to close its growing budget gap.

As the legislative session wore on, it became clear that the best possible funding scenario would see the arts budget reduced by at least 39%.  Within the budget proposals debated and passed during the Arizona State Legislature’s session, the state arts budget would have sustained reductions ranging from 39% to 80%.  (This does not include the budget proposal offered by Legislative Democrats, which cut the arts appropriation by less than 5%. This budget was never brought to committee by legislative leadership.)

Given Arizona’s massive budget shortfall and volatile political climate, and though it is distressing to say, a 42% reduction is considered a legislative success.  Several elected officials from both parties, as well as Governor Brewer and members of her budget team, understood the importance of a general fund appropriation and the ArtShare Endowment, and fought mightily against indomitable odds to achieve the best possible outcome for the arts.  Thankfully those individuals were able to fend off deeper cuts to the Arts Commission.

As these officials were fighting for the arts, statewide arts advocates were passionately giving voice to the value of public funding for the arts in their communities.  Parents, youth, volunteers, patrons, arts leaders, educators and artists stepped forward to tell personal stories about the educational, economic and cultural impact of the arts in Arizona.  In all, hundreds of calls were placed and thousands of messages were sent to elected officials in support of the arts during the legislative session.

Because several parts of Arizona’s fiscal year 2010 budget were vetoed by Governor Brewer and the Legislature’s proposed package did not close the state’s budget gap, and because economists project increasing revenue shortfalls over the next several fiscal years, we remain concerned about midyear and ongoing budget reductions.  Together we must remain vigilant in support of the statewide arts industry.

In fiscal year 2009, though the Arts Commission’s actual operating cash budget was reduced by over 33% in legislative reductions and interest/fee losses within the year, the agency was able to fulfill all fiscal year 2009 grant commitments.  This was accomplished by careful fiscal planning and deep cuts to programs, operations and personnel – reducing agency staff by 23% over the past two fiscal years.

That said, an additional 42% reduction will no doubt have a significant impact on administration, operations, grants, programs and services.  We pledge to continue reducing internal costs so as to mitigate losses to agency grant-making, though with only 14% of the agency budget applied to personnel and with many fixed operational costs (such as rent and other state contracts), the agency will not accomplish a balanced budget without percentage cuts to grants and programs.

Arts Commission staff is diligently working with the now-final budget numbers to calculate fiscal year 2010 grant awards.  We apologize for the inconvenience, but because the state arts budget was not finalized until July 1, 2009, grant award announcements will not be available until July 15, or thereabouts.

Your tireless work is of great value to the Arizona Commission on the Arts staff and board.  Know that we never forget our charge, to provide statewide access to and support your work in the arts – and with your help, we continue to imagine an Arizona where everyone can participate in and experience the arts wherever they live.

Posted on July 6, 2009, in Arts and Culture, Finances, Governance and tagged , , , , . Bookmark the permalink. Leave a comment.

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