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.

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.

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.

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.

Culture czarina Peggy Amsterdam may as well have been rallying compatriots to battle on the ramparts in “Les Miserables.”

Last night, the feisty Amsterdam urged mavens of the region’s arts and culture community to oppose the state’s 6 percent sales tax on tickets to concerts, live theater, performing arts, zoos and museums.

“This is the fight for our lives,” said Amsterdam, president of the Greater Philadelphia Cultural Alliance, which recently unveiled a campaign seeking to double audiences to arts and cultural events by 2020.

“Why are the arts singled out, and movies and sports exempt?” she asked. Revenues from the proposed tax would amount to “only a paltry one-third of one percent of the budget.”

To Gov. Rendell, she asked one question: “What were you thinking?”

The crowd responded with thunderous applause at the alliance’s annual meeting at the Annenberg Center for the Performing Arts at the University of Pennsylvania.

“Hear this!” Amsterdam vowed to politicians in Harrisburg. “We will not sit quietly by, and accept this, will we?”

“No!” roared the audience, representing 390 arts and cultural organizations in the alliance.

“So, Gov. Rendell and legislative leaders: In the next few days, you will hear from us,” Amsterdam vowed. “We will clog your fax machines. We will call and visit you.”

And she told members of the alliance that they had only 10 days “to make a difference before this [arts tax] becomes law.”

“Call your legislators and oppose the expansion of the sales tax and get your board members to complain,” she added. She didn’t rule out hiring buses for advocates to lobby legislators.

Amsterdam accused Rendell and the arts-tax proponents – Senate Majority Leader Dominic Pileggi, R-Delaware, and Senate President Pro Tem Joe Scarnati, R-Jefferson – of trying to solve the budget crisis “on the backs of the most vulnerable while pushing cultural organizations to the brink.

“This is a repressive tax that will affect the poorest communities,” citing seniors, single parents, families and students, she said. “These are the people who will be forced to pay the new tax.

“This will tax people out of our cultural institutions,” she added.

Mayor Nutter, who arrived after the rally, said the “arts, culture and creative expression is the heart and soul of Philadelphia.”

The arts economy generates $1.2 billion in the five-county area and provides 20,000 jobs, but it has been hit hard by the recession with layoffs and shortened programs, he said.

So the alliance and the city have prepared a $250,000 proposal to the feds seeking to save jobs in 11 arts organizations, he added.

By Vicky Thomas
vthomas@delcotimes.com

Hundreds of determined arts leaders attending last night’s annual meeting of the Greater Philadelphia Cultural Alliance at the Annenberg Center for the Performing Arts vowed they would not go gently into that good night.

Just two days after waking to news that the proposed Pennsylvania budget agreement, announced late Friday in Harrisburg, would extend sales taxes to arts and cultural performances and venues – but not to movies or sports events – arts officials said they would blitz lawmakers in a last-ditch effort to stop the tax.

Peggy Amsterdam, head of the alliance, drew sustained applause when she framed this question for Gov. Rendell and legislative leaders: “What were you thinking?”

“Your proposal to extend the sales tax to arts and culture activities – a proposal snuck in at the last minute in a backroom deal – attempts to balance the commonwealth’s $28 billion budget on the back of one of its most valuable and vulnerable industries,” Amsterdam said.

“It will price everyday people out of arts experiences, and it will push key cultural institutions to the brink. Yet with as much potential for economic and social damage as this tax threatens, it yields only a paltry one-third of 1 percent impact on state revenues.”

Mayor Nutter, who addressed the meeting after struggling through the city’s own protracted dealings with budget makers for the past several weeks, said he was just as surprised by the proposed imposition of the arts tax as his audience was.

“I don’t have all the details, and it appears that all the details are not squared away,” Nutter said. “I am certainly concerned about it.”

Two areas of confusion and concern seemed to dominate conversation at the meeting. The first concerned whether the tax would extend to nonprofit museums’ so-called membership sales – deals that allow unlimited attendance for a one-time annual fee.

The fee, which is akin to a subscription sale by a performing-arts organization, is treated as a tax-deductible contribution to a nonprofit. Some arts officials said they had heard that these fees, too, would be taxed.

But one city official said that was unclear, since the funds are not for a specific event and are treated by the IRS as a contribution.

Another area of concern was what arts people viewed as an unfairness in the budget proposal – that it would extend the sales tax to cultural venues but not sports events and movies.

City and state officials said yesterday that applying the sales tax to pro sports teams would be difficult if not impossible, due in large part to past agreements under which the state helped finance new stadiums in Philadelphia and Pittsburgh for the Eagles, Phillies, Steelers, and Pirates.

Barry Ciccocioppo, a spokesman for Gov. Rendell, said no law prevents the state from extending its sales tax to pro sports events. But such a move, he said, would hit those two cities hard.

Here’s how: When the state agreed to help finance the new stadiums, the teams agreed, in return, to guarantee millions in annual tax revenue to the state. In the Eagles’ case, for example, that is $2.5 million annually.

If more taxes are collected from sports tickets via a sales tax, the financially strapped city would have to pick up the difference, Ciccocioppo said.

Meanwhile, Eagles spokeswoman Pamela Browner Crawley said yesterday that the team already charges the city’s 5 percent amusement tax on its home-game tickets, which cost $85 on average, and remits the proceeds to the city. She said the team had played no part in the state’s budget negotiations.

Complicating matters was the lack of publicly available information on the nuts and bolts of the budget agreement announced Friday. Aides to Rendell and legislative leaders said yesterday that many of those details still needed to be worked out.

One detail of interest to the arts world is a proposed cultural-activities fund, drawn from proceeds of the expanded ticket-tax revenue. Budget negotiators say this fund would help the museums, theaters, and zoos whose state subsidies have been slashed – but no particulars have been spelled out.

Amsterdam urged members of the cultural community to blitz legislators and inform patrons in an effort to stop the tax extension.

“So, Gov. Rendell and legislative leaders,” she said, “in the next few days you will hear from us. We will clog your fax machines, e-mail, and phones.”