Waving signs urging “Save Our Arts” and “Don’t Tax Behind Our Backs,” about 150 people gathered outside the Bellevue in Center City yesterday to protest a proposal to tax tickets for museums and performing-arts venues to balance the state budget.

State Sen. Larry Farnese, (D., Phila.) one of three state senators who participated in the noontime rally, said he would “join my colleagues in the Philadelphia Senate delegation, and we will fight to oppose this tax.”

Though Farnese openly opposed the tax at the rally, he did not say he would oppose the state budget when it comes up for a vote in the legislature. Farnese said that many of the arts institutions affected by the tax were in his district and that he and the Philadelphia Senate delegation, under Chairwoman Sen. Shirley Kitchen, would meet to “see what we can do.”

Farnese also said he had “not seen any language on how this money [from the tax] will be spent.”

“A community’s health is judged by the health of its arts,” said Sen. Daylin Leach (D., Montgomery). He also encouraged the crowd to spread the word that the tax should not go through.

The proposed tax would add 8 percent to the cost of tickets to plays, museums, concerts, and zoos in the city and 6 percent elsewhere. Movie tickets and sporting events are exempt. “It’s ironic that [the arts will have] a higher tax than major-league sports,” said Todd Holtsberry, a member of the Secret Room Theatre and the Philadelphia Dramatists Center. “Their players seem to get paid a lot more money.”

Currently, fans at pro sporting events pay the city’s 5 percent amusement tax on tickets.

During recent budget talks, Gov. Rendell insisted that legislative leaders come up with additional sources of revenue to close a budget hole and recommended lifting some exemptions to the state sales tax. He said he didn’t care where the money came from as long lawmakers didn’t tax clothing or food. Senate GOP leaders chose what critics are now calling the “arts tax.”

The deal, tentatively approved by Rendell and Senate and House Democratic leaders, also calls for the bulk of the money raised from the tax to go into a separate fund that would be funneled back to cultural attractions statewide in the form of grants. Plans for the somewhat impromptu demonstration yesterday began Tuesday night when Thom Weaver, a theater lighting designer, sent out an e-mail to members of the arts community that went “viral.” He said excitement and fear over the proposed tax drew an immediate response.

At the rally, Weaver told the crowd that the legislators supporting the tax think they are “attacking the elite artists wearing their scarves and drinking lattes. . . . But take a look around you. I don’t see any of those here. I see hardworking men and women who need to provide for their families, provide for their children, pay mortgages.”

The protesters, mostly college students and members of the theatrical union Actors Equity, marched south down Broad Street to the University of the Arts after the protest, chanting “Save our arts!”

“I think it’s ridiculous that they’re taxing our arts,” said Tess Kunik, a freshman at the University of the Arts.

“There are better things that could be taxed,” said Graham Hooper, also a freshman at the school.

Residents living in the last state in the union to approve a comprehensive budget must be scratching their heads on the final pact agreed on by the state House, state Senate and Gov. Edward Rendell.

Now, the agreement is only a framework for the 2009-2010 state budget. Our elected leaders are still working to draft a line-item budget and a number of bills that must be passed before the budget can be enacted. Pennsylvania Senate President Joe Scarnati said he does not expect legislative action to be completed this week.

The long budget struggle between state Democrats and Republicans focused on holding the line versus raising taxes. So they comprised.

Here comes the head-scratching part.

The folks in Harrisburg decided to maintain a long-standing tax exemption on the sale of cigars and smokeless tobacco. The group that raised taxes on cigarettes 25 cents a pack and imposed a sales tax on “little cigars” at the same rate as cigarettes because of the strain on health care costs due to smoking have apparently decided cigar smokers and tobacco chewers don’t have a cancer risk. Maybe they should report their findings to the AMA.

But, the people Pennsylvanians pay to make decisions found other things to tax. Harrisburg wants to tax the arts. The new budget plans to extend Pennsylvania’s sales tax to the performing arts, museums, historical sites, zoos and parks.

Of course, they did not extend the new tax to sporting events. Taxpayers have already subsidized rich sports owners and their rich players by paying a share of the costs for their showcase stadiums. Now Harrisburg doesn’t want those to encumber that group by adding the same tax to their tickets that the Media Theatre must pay.

An added slap to cultural institutions in the state is that only a portion of the revenue collected from the new tax would be funneled into a special fund reserved for supporting the arts and cultural institutions. The rest would help pay for other items in the nearly $28 billion state budget deal struck by the governor and leaders of three of the four legislative caucuses. The percentage that would be earmarked for the special fund was still being firmed up — like many details of the budget deal.

The tax-deciding Legislature and governor found another way to save cigar smokers, tobacco chewers and sports franchise owners — a 20 percent tax on any club licensed by the state’s Liquor Control Board on its earnings from games of chance, such as punch boards, pull-tabs, raffles (including lotteries), daily drawings and weekly drawings.

Just whom does this tax hurt? While a few metropolitan fire departments receive some state funding, most of the departments that serve the residents of Delaware County rely on the above-named revenue sources to raise operating funds. Volunteer fireman and emergency service organizations trying to keep their financial heads above water are saddled with a 20 percent loss — money now earmarked for state tax coffers.

Residents of Pennsylvania are still waiting for a budget. If anyone had any doubts about who influences the elected men and women in Harrisburg, the decision on whom to levy taxes should provide an answer.

Waving signs saying “Save our Arts” and “Don’t Tax Behind Our Backs,” nearly 150 people massed at the Bellevue in Center City to protest a proposal to tax tickets for museums and performing-arts venues to balance Pennsylvania’s state budget.

State Sen. Larry Farnese, one of three state senators to join in the noontime protest, said he “will join my colleagues in the Phildelphia Senate Delegation, and we will fight to oppose this tax.”

State Sen. Daylin Leach denounced the proposed tax as a “backroom deal” and said he would oppose the tax, but not necessarily the state budget.

Leach encouraged the crowd to spread word that the tax should not go through.

The tax will add 8 percent to the cost of an arts ticket in the city and 6 percent elsewhere.

Organizer Thom Weaver, a theater lighting designer, said he sent out an e-mail about the protest on Tuesday that went “viral,” resulting in a larger than expected turnout.

The protesters, mostly college students and members of the theatrical union Actors Equity, marched down the Avenue of the Arts following the protest, chanting “Save our arts!”

The march ended at City Hall at about 1 p.m. with a crowd of nearly 30 University of Arts students singing and shouting.

On Monday, hundreds of determined arts leaders attending the annual meeting of the Greater Philadelphia Cultural Alliance at the Annenberg Center for the Performing Arts vowed to fight the tax, saying it would hurt museums and performance arts groups.

Lawmakers’ decision to tax cultural forums is an easy, but wrong out after budget negotiations

Working over deadline usually prompts hasty compromises and quick decisions, but Gov. Rendell and the Pennsylvania legislature took their sweet time agreeing on a state budget, which was announced last Friday. As the last state to do so, their “deal-making” is hardly something to applaud. And given the tentative budget’s state sales tax on performing arts, there may soon be even less to applaud in Pennsylvania.

In addition to taxing performing arts – plays, ballets, concerts, museum admissions, zoos, historical sites and parks – the new budget taxes cigarellos for the first time, raises cigarette taxes by 25 cents a pack, takes an additional 2 percent of slot-machine gambling revenue and legalizes table games, like blackjack, poker, craps and roulette.

It makes sense to tax tobacco products and gambling since they are generally seen as “bad.” The idea of a sin tax is certainly not new, and lawmakers obviously relied heavily on that idea.

But here’s the thing: Far from being a societal ill, it’s actually good for people to enjoy the arts. Performing arts and intellectual attractions don’t just promote cultural appreciation – on a more practical level, these activities get people out in the community and allow time with family and friends in some good wholesome fun. And without any tax, it already costs a family of four $66 to see the Philadelphia Zoo. Toss in an 8-percent sales tax, and it would cost the same family $71.28.

Additionally, part of the notion of a sin tax is that people will grumble, but they will still buck up for their nicotine fix or gambling habit. But that’s not necessarily true of an occasional cultural excursion, especially in this economy. According to the National Assembly of State Arts Agencies, states reduced their arts funding this fiscal year by 7 percent on average (The amount of arts funding for Pennsylvania is still undetermined.).

“As a student living on a budget, it’s a wonderful treat to get to see a theatrical or orchestral performance in Philadelphia once in a while,” wrote College senior Esther Burke in an e-mail. “Unfortunately, a tax on those tickets could be the factor that puts them out of my price range.”

To add insult to injury, sporting events and movies are not included under the umbrella of the new tax. Not only do these draw larger audiences, but they are also typically for-profit, making them doubly more resilient than largely nonprofit arts organizations.

Perhaps the most frustrating part of this tax is that there are other, more reasonable products to tax.

Every other state imposes excise taxes on smokeless tobacco, and all but Florida taxes cigars. Furthermore, polls show 7 out of 10 Pennsylvanians support these taxes. Yet cigars and smokeless tobacco are still exempt, as are tobacco and accessories for rolling your own cigarettes.

Another tax that would definitely be more controversial than a tobacco tax, but also more lucrative, is a soda tax. The rationale behind taxing soda is similar to why cigarettes are taxed so unmercilessly. Smoking collectively has a negative impact on public health in just the same way that soda does. Taxpayers end up paying medical costs for obesity and excessive weight through Medicaid and Medicare, so it seems only fair that a tax on sugary beverages could go toward covering state health care costs.

The idea got kicked around briefly at the beginning of the health-reform debate, and some cities are already moving forward with the concept. San Francisco recently implemented a tax on retailers that sell sugary beverages, and New York, while not quite bold enough to implement a tax, rolled out an ad campaign featuring drinks being poured in a glass with fat oozing over the sides. The slogan? “Don’t drink yourself fat.”

These are just a few ideas of other ways Pennsylvania could have raised its tax revenue in a productive way. With so much time and initial gridlock, I’m disappointed our lawmakers weren’t a little more creative.

Unprecedented lack of a state budget is hurting local nonprofit cultural and arts organizations. On top of less money, they now hear that the state six percent sales tax may be applied to their admission prices. The news was not welcomed by affected organizations in Wayne County.

As was reported by The Associated Press, the plan would extend Pennsylvania’s six percent sales tax to tickets for the performing arts, museums, historical sites, zoos and parks. Senate Appropriations Committee Chairman Jake Corman stated it is partly designed to shift the taxpayers’ share of financing those activities onto their patrons. Much of the money, however, would flow into the state’s coffers to be used to be spent on other programs.
The proposed new tax is included in the current budget version on the table in Harrisburg.

Wayne County Historical Society
For the Wayne County Historical Society, a more immediate concern is the anticipated loss of state grant funding. Executive Director Sally Talaga said that the Society has an operating budget of approximately $85,000 a year, and $10,000 of that has been coming from the state.

In the spring, however, Governor Rendell proposed to save money by slashing all grants distributed through the Pennsylvania Historic and Museum Commission (PHMC). For the last 16 years, the Society has received general operating support money from the PHMC, which matches the allocation given by the county commissioners. In recent years that amount has been $10,000.

General operating funds help cover heat, lighting and other utilities for the museum in Honesdale. The Society hasn’t begun to work on the 2010 budget yet, but the trustees may have to consider dramatically cutting hours and possibly staff time, to make up for the loss. Talaga said that even if the new state budget restored the funding, the time it takes to apply and receive the funds means they wouldn’t expect the funding until late 2010.

Grants for special projects have also been cut, which promises to slow progress on the Society’s Towpath to Trail Project in Palmyra Township, she said.

As for the six percent sales tax, she said she expected they would have to add it to the admission price but could not comment further,

Dorflinger Suydam Sanctuary
At Dorflinger Suydam Sanctuary, alarm has been raised over the proposed tax. Executive Director Joan Gillner said that they would either have to add the tax to the ticket price for their Wildflower concerts and glass museum admission, or absorb the cost. Although the summer concert series did all right, museum visits were down this year, she noted.

Already “operating on a shoe string,” Gillner remarked, they hope they wouldn’t have to raise the concert ticket price, currently $20. Dorflinger also makes use of a state grant from the Pa. Performing Arts on Tour (Pa. PAT), which helps pay expenses for bringing some of their performers to White Mills. Gillner heard that this funding source may be cut.

As many as 3,000 to 4,000 people attend the Wildflower concert series each year, she stated.
Ritz Company Playhouse

Sandy Gabrielson, board member at Ritz Company Playhouse in Hawley, said he has written to State Representative Mike Peifer with his suggestion that not-for-profit organizations should be exempt from the tax or set a revenue limit of $50,000 a year before tax applies. Smaller groups, such as Ritz, will be hurt the most, he stated.

Approximately 5,000 people are expected to attend their plays this year, he said. He reasoned that if the tax is supposed to fund the grant money given out, then with $900 to $1,800 Ritz receives annually from Pa. PAT, Ritz would be better off keeping the six percent than paying the tax. Ritz brings in about $35,000 in box office receipts each year.

Most of their theater attendants are senior citizens, who pay $10/ticket; adding a sales tax and rounding it off, they’d be charged $11. If this means less people will be able to afford to go to the play, he added, how would that help the state budget?

In these tough times, even a small increase in a ticket price can be the deciding factor for a family of four looking to spend an afternoon at the Philadelphia Zoo or the Museum of Art. A tax will decrease the affordability of Philadelphia’s myriad cultural attractions – and hurt organizations who are already seeing a decline in admissions and revenue. If Harrisburg is serious about looking for long-term solutions to fund arts and culture – then we should be invited to the table. Let’s band together to let our legislators know we think a sales tax on nonprofit cultural institutions is shortsighted – and that we want an invitation to the converstion. Once the budget agreement is drafted into legislation, we’ll only have a ten day window – so the time to act is not tomorrow, but NOW.

After the jump, find out what you can do to help this cause. ~D
Step 1: Find the Harrisburg office phone number (look for the 717 area code) for both your state senator and representative using our handy Legislator Lookup.

Step 2: Need some help with your message? Use the following call script: Hello, my name is ________, and as a resident of _______, I’m calling in opposition to an expansion of the state sales tax on the backs of nonprofit arts and cultural organizations in order to balance the FY10 state budget. In these tough economic times, increases on ticket prices only taxes out working families out of theaters, museums, and zoos. Interestingly, sports and movies – which are huge revenue generators for Pennsylvania – remain exempt from the tax. This doesn’t seem right. I think that those of us who work in, or support these nonprofit institutions in our region should be a part of the conversation on long-term solutions for cultural funding. I ask that Senator/Representative _________ brings this message to caucus leadership before the budget is signed into law.

Step 3: Once you’ve delivered the above message, ask if you can meet with your legislator in person to deliver the same message. Need some help in preparing for a meeting? Email sarac@philaculture.org with any questions – and please report your call and if you’ve scheduled a visit to the same address.

by KYW’s Tony Romeo

Despite pleas from the arts community, a spokesman says Governor Rendell is standing by a proposed sales tax on admission to cultural sites and events as part of the state budget deal announced last Friday.

Spokesman Barry Ciccocioppo says Governor Rendell met with leaders of the arts community for about a half an hour on Wednesday. Ciccocioppo says the governor listened to their concerns, and reminded them that the sales tax on tickets was a Senate Republican proposal:

“But that he accepted it because it met his criteria that a budget provide recurring revenue to balance this year and next, and provide funding for education and health care.”

Ciccocioppo says the governor expressed frustration that lawmakers wouldn’t defy “special interests” and consider a tax on smokeless tobacco products, but also said he is hopeful that the sales tax on tickets will create a special fund to insure that the arts community is protected in future budgets.

In Harrisburg and across Pennsylvania, we are fortunate to have excellent nonprofit performing arts organizations. These groups are already struggling with the challenges of the continuing economic recession, and now the governor and some members of the Legislature want to force these community-based, nonprofit organizations to shoulder the burden of the failures of the state budget through a nonprofit tax.

It is both sad and astonishing to me that our state leaders would choose nonprofits to realize funds to solve the state’s budget problems. The proposal to tax nonprofits by charging sales tax on subscriptions, ticket sales, art exhibitions and museum admissions will only further damage the health of our state and its communities. The amount of revenue this plan would generate for the state is trivial, but the consequences for the nonprofit arts community would be severe.

Subscription renewals and ticket sales are already down for these nonprofits, while the costs of operating are up, largely due to the current economic situation. Financial support from local funding sources has also been greatly reduced.

Nonprofit performing arts organizations strive to make their presentations available for the communities they serve by pricing tickets to be affordable to all. If the Legislature and the governor approve this tax on nonprofits, the cost of tickets will be increased. A consequence will be reduced attendance at these community cultural events. Lower attendance will hurt many nonprofit organizations.

Some community-based groups will likely not survive under this burdensome tax. The cost of collecting sales tax and complying with bookkeeping and auditing requirements would add to the already increased administrative and operation costs that nonprofits are struggling to bear.

Furthermore, state leaders are considering slashing or eliminating the funding to the Pennsylvania Council on the Arts. Created by Gov. Scranton in 1966, the council has been a powerful advocate in Pennsylvania for fostering and supporting cultural projects and organizations that benefit our local communities and our state.

If the Council on the Arts were to be shuttered due to poor budgetary planning by our state leaders, our communities will suffer to an incalculable extent. Pennsylvania has already experienced a “brain drain” as our young adults move to other states that offer more opportunities. Imagine if the shortlist of creative outlets currently available in Pennsylvania for our young adults is further reduced.

Our leaders in Harrisburg may see the nonprofit tax as a quick fix, but the tax will be profoundly destructive to the cultural community. Ultimately, this long-term damage will further diminish Pennsylvania’s potential for growth and prosperity.

Instead of burdening these organizations with a nonprofit tax, they should be supported and nourished by our state leaders. It is unthinkable to further starve and threaten nonprofits for the sake of increasing tax revenues to fill funding gaps in the budget.

I challenge our state’s leaders to reduce costs in a responsible way while finding innovative ways to balance the budget without harming community arts organizations.

This proposal to tax nonprofits for ticket sales to cultural and education events is a self-defeating plan. Inevitably, the meager revenue generated by these new sales taxes will wither as nonprofits fade out of existence due to poor tax policy decisions.

The capital region’s nonprofit arts organizations are good community partners and a cultural resource for Pennsylvania residents young and old, from every walk of life. We can’t allow state leaders to take that away.

Dr. William M. Murray is chairman of the board of the Harrisburg Symphony Association.

Many performing arts programs, zoos and museums are run on a shoestring budget.

They usually use much of their ticket sales to pay staff and keep operations functioning.

That’s why we are surprised to see budget negotiators apparently asking these groups to take on the added financial burden of helping to fill the gaping budget hole.

Lawmakers and Gov. Ed Rendell are counting on these entities to bring in up to $120 million in state revenues for the spending plan they are moving forward for a vote in the General Assembly.

Tremors are traveling through the arts community for organizations such as the Harrisburg Symphony Orchestra, Open Stage of Harrisburg and Hershey Entertainment, which books concerts at Hersheypark Stadium and Giant Center.

With no warning, they are all trying to understand exactly whether the 6 percent sales tax would apply to them.

Sen. Jake Corman, Republican appropriations chairman, said that only “professional” performances would be taxed. What does that mean?

Most small nonprofit groups, from museums to choral groups to community theaters, operate with only a few paid staff, the rest are volunteers.

Certainly an argument could be made for taxing bigger entities that bring in acts such as Taylor Swift and Bruce Springsteen, but taxing smaller organizations just doesn’t make sense.

Supporters argue some of the money will go to a special state fund for the arts and cultural institutions.

This, they say, would provide constant funding even during unsure budgetary times. So far no one has made public any research that shows exactly how much money will be channeled into this fund and, if so, whether arts programs would be better off than under the current system.

Sen. Corman says this tax works because arts and entertainment events are the ultimate discretionary buy.

Really? We wonder whether there also might be another reason for them being chosen.

Professional spectator sports also were on the list of new tax possibilities. A tax would have brought in a projected $65.3 million, according to projections. That ended up not being included.

It is difficult to overlook the lobbying power of professional sports teams.

During football season, our governor even appears on Comcast’s Philadelphia Eagles pregame and postgame shows as a regular commentator.

In Pittsburgh and Philadelphia, pro franchises managed to get taxpayer funding for new stadiums when financial times were better yet they are not being asked to help with the commonwealth’s deficit now that times are tougher.

Instead of the Steelers and Phillies helping close the budget gap, nonprofit organizations, such as the Pittsburgh Zoo, the Academy of Natural Sciences in Philadelphia and Harrisburg’s Market Square Concerts, seem slated for that.

And if lawmakers and the governor argue these are tough times that call for tough decisions, how about looking for recurring revenue from a tax on cigars and smokeless tobacco that could bring in $70 million?

Add to that a severance tax on Marcellus shale drilling, estimated by the Pennsylvania Budget and Policy Center at $47 million (and expected to increase in coming years) along with a sales tax on spectator sports and you have a grand total of $182.3 million.

Of course, unlike the sports and natural gas industries, not many nonprofit arts and entertainment organizations nor their audiences have powerful lobbyists.

Legislative leaders are discussing the budget details with their rank-and-file members this week before a vote on the spending plan.

There is still time for members to say no to a sales tax on the arts, museums and zoos.

This is an idea on which lawmakers should close the curtain.

“The idea was to try to make it a user fee as much as possible,” said Sen. Jake Corman, R-Centre, chairman of the Senate Appropriations Committee.

The plan, a late addition in the negotiations that yielded a deal that would end Pennsylvania’s status as the only state without a complete budget, has provoked strong opposition but advocates for the arts likely face an uphill climb in their effort to derail it.

The proposed elimination of the current exemptions for artistic and cultural events is expected to generate roughly $120 million a year _ about twice as much as those activities currently receive through various state appropriations, Corman said.

A portion of the revenue would be funneled into a special fund reserved for supporting the arts and cultural institutions. The rest would help pay for other items in the nearly $28 billion state budget deal struck by Gov. Ed Rendell and leaders of three of the four legislative caucuses.

The percentage that would be earmarked for the special fund was still being firmed up _ like many details of the budget deal _ and could generate more or less than previous appropriations for artistic and cultural events, Corman said.

“It’s up in the air because it hasn’t been written,” Corman said in a telephone interview from his district office in Bellefonte.

The idea surfaced for the first time Friday night, shortly before the governor, Corman and other top lawmakers announced the budget deal may end an impasse nearly three months into the new fiscal year.

The partisan deadlock forced tens of thousands of state employees to temporarily work without pay until Rendell signed a partial budget in August providing limited funds to keep state government operating. But some daycare centers have closed, some preschools have not yet opened and mentally ill people have to wait longer for counseling because hundreds of nonprofit agencies have not received state reimbursements they rely on.

The money to be generated from extending the 6-percent tax to artistic and cultural events was a final component to seal an agreement between Senate Republicans and Rendell, who had demanded more reliable sources of revenue before he would sign on.

Advocates for arts groups said they were stunned by news of the proposal and said it would discourage people from attending performances or visiting cultural institutions.

“What were you thinking?” asked Peggy Amsterdam, head of the Philadelphia Cultural Alliance at a Monday night meeting where hundreds of arts leaders criticized the budget negotiators and vowed to try to block the proposal.

“It will price everyday people out of arts experiences and it will push key cultural institutions to the brink,” Amsterdam told the gathering at the Annenberg Center for the Performing Arts.

On the other side of the state, the executive director of the Pittsburgh Ballet Theatre expressed a similar sentiment.

“It’s a bad idea to tax the nonprofit arts sector,” said Harris Ferris. “Many of us have adjusted our ticket prices and packaged them to be accessible to the greater community. We want people to be able to come to the performing arts, which is a $2 billion annual sector of the economy.”

A spokesman for Hershey Entertainment and Resorts Co., which books major concerts at Hersheypark Stadium and the Giant Center near Harrisburg, said the state should be promoting cultural activities for families, not making them more expensive to attend.

“We are most disappointed that there weren’t any advanced discussions regarding the impact that this new tax would have on individuals and families who want to attend these cultural or live entertainment events,” said the spokesman, Garrett Gallia.

Philip Horn, executive director of the Pennsylvania Council on the Arts, which dispensed $14.5 million in state grants to nonprofit arts and cultural organizations last year, said he did not learn about the proposal until Saturday.