Pennsylvania budget would include tax on the arts
From the Chambersburg Public Opinion
By Rob Luff
FRANKLIN COUNTY — A tentative solution to the 85-day state budget impasse could make a number of organizations, school districts and municipalities happy, but arts and entertainment venues are not among those rejoicing.
The new budget deal, which is yet to be officially passed and approved, extends the statewide 6 percent sales tax to arts and entertainment venues and performances.
Tickets for concerts, plays, ballets and other performances were previously exempt from the sales tax but will soon lose that exemption if the budget is approved. Museums and zoos are also included in the tax, but tickets to movie theaters and professional sporting events remain exempt.
Local theaters react
Several local arts organizations say they are concerned and confused at the news of the new tax as they continue to watch their revenue from the state decline.
They expect it to harm their already-wilting budgets and deter patrons from attending as many shows as before.
“That’s an awful amount of tax when ticket sales are already down,” said Linda Boeckman, manager of the Capitol Theatre in Chambersburg.
She said the tax comes at a difficult time for theaters and play houses as they suffer with the recession.
Ticket sales took an “absolute nosedive” for the theater last year as the economy worsened, Boeckman said. Sales picked up this year, but they are still down by about 10 percent compared to average years.
Now, the theater’s $30 ticket price would jump by about $1.80.
That’s not a significant amount, Boeckman said, but it would cost a family of five almost $10 more to attend a play. Those families would probably cut back on buying concessions items, she said, which affects the theater’s bottom line.
The Capitol Theatre’s budget is approximately $430,000. In an average year, ticket sales accumulate $80,000 to $100,000, including sales from Chambersburg Community Theatre and Chambersburg Ballet.
When all is said and done, the theater breaks roughly even.
Sally Herritt, executive director of CCT, said she fears that the new tax could ultimately lead to the death of some arts organizations.
She expects the ticket price hike that would come as a result of the tax to impact the accessibility of arts to the public.
“It could very possibly cause someone to go out (of business),” she said. “If we disappear, then that’s one less opportunity for people to be schooled in the arts.”
Holly DeKarske, executive director of Chambersburg Area Council for the Arts, said arts companies can only tighten their belts so far as state funding decreases.
“At some point you’ve cut it so tight that you cut of circulation,” she said.
Although big cities with large theater communities might fair just fine with the ticket tax, she said, sooner or later the smaller grassroots organizations could go under.
Such a downfall would hurt local economies, Herritt said.
Fewer theatergoers means fewer people in the downtown, she said. They won’t be eating in the nearby restaurants and they won’t be browsing the stores.
As director of an organization that distributes state funds for local performances, DeKarske wants to see the funds recovered by the tax come back to arts funding.
“I think in the end it’s just going to end up costing everyone more money,” she said. “This is just going to the state budget somewhere, to fill that magical black hole we’ve all heard about.”
Budget negotiators say the funds will be reserved for arts and cultural institutions.
The lawmakers’ take
Legislative leaders came to a budget agreement last week without removing any sales tax exemptions.
That agreement, however, did not meet Rendell’s two goals.
A spokesperson in the governor’s press office said Tuesday that he wanted the budget to include enough recurring revenue to sustain the budget for this year and next, while avoiding cuts to health care and education.
Erik Arneson, spokesperson for Senate Majority Leader Dominic Pileggi, R-Glen Mills, said Rendell told legislators to remove the sales tax exemption from one or more specific items in order to get enough recurring revenue into the budget.
He said the governor gave them a list of acceptable taxes, telling them to choose.
Theater, dance, music and performing arts were included on the list, as were museums, historical sites, zoos and parks.
“Very reluctantly, legislative leaders agreed to impose those taxes with two conditions,” Arneson said. “First, that the bulk of the revenue generated be used to create a special fund to support the arts and cultural institutions; and second, that this would close the budget negotiations.”
He added, “By refusing to include any growth in his revenue estimates for 2009-10, Governor Rendell forced the legislature to choose from a menu of bad options.”
When asked why the tax did not extend to sporting events or movie theaters, Arneson said Rendell had “serious reservations” about extending it to those venues.
Barry Ciccocioppo, a spokesperson for the governor, told the Philadelphia Inquirer Monday that taxing professional sports teams’ ticket sales would contradict agreements the respective cities hold with them. It would end up forcing the cities of Philadelphia and Pittsburgh to foot the bill.
The governor’s spokesperson contacted by Public Opinion Tuesday said he would not have enough information to address questions about movie theaters or sporting events until the bill is introduced to the conference committee.
Local backlash
“It’s disappointing that the government feels the arts and entertainment fields need to be taxed, but they don’t seem to feel all the arts should be taxed,” Boeckman said.
DeKarske, a sports fan, agrees with Boeckman.
“If they’re going to tax our arts tickets they should be taxing our sports as well,” she said. “It should be across the board.”
Meanwhile, a lack of information about the bill, and contradiction between the governor and the legislators, has arts institutions scratching their heads.
“This just raises a big cobweb of questions,” Herritt said. She is unsure whether she will be forced to levy the tax on her patrons, since Chambersburg Community Theatre is made up of amateur actors, rather than professionals.
Although budget negotiators are clear that the taxes will not affect school performances, they seem unsure whether amateur community theaters will be taxed the same as theaters that employ professionals.
No one had an answer Tuesday.
