TAX REFORM SEEN AS A ‘CATASTROPHE’ FOR ARTS

Beverly Sills, the diva who gave up her singing career to assume leadership of the New York City Opera, denounced federal income tax reform Thursday, saying its enactment “will be the greatest single catastrophe of our times” for the arts.

Sills and actor-director John Houseman told 500 grant makers from foundations and corporations that it is time to throw in the towel in the fight for more federal aid to the performing arts.

Instead, Sills and Houseman said, arts organizations should focus their efforts on state and municipal governments and the private philanthropies of foundations, corporations and individuals.

“Cuts, cuts, cuts--if we are in such good (economic) shape, why are we talking about nothing but cuts?” Sills asked at a breakfast meeting of the Council on Foundations, which is holding its 36th annual conference here.

“I would like to see more support” from the federal government, Sills said. But she added pessimistically, “I don’t think we are going to see it. I think we should be very realistic about this.

“I think that if tax reform ever comes into being, it will be the destruction of educational institutions . . . arts institutions . . . it will be the single greatest catastrophe of our times” for the arts and other charities. This remark was met with only mild applause by the audience, which included many of the most influential grant makers who shape arts-giving in the country.

Sills went on to say, “The key is really not in fighting for increased government support,” but in seeking more money from the foundations and corporations represented by her audience, and from individuals. She also suggested that state governments should supply more money for the arts. Her own opera company depends on charitable donations for about half its $15- million annual budget, she said.

Houseman, however, suggested that performing arts organizations skip the statehouses and instead go to City Hall to get more government funding.

“As a general rule, our whole notion of subsidy is way behind the rest of the civilized world,” Houseman intoned.

Houseman said he believes that “eventually, municipalities have got to invest in what, in fact, affects them very directly. New York is an extreme example, but every city benefits--even financially--from a strong artistic settlement.”

(Arts organizations nationwide have produced a variety of studies indicating that their organizations spawn economic activity that benefits the community. These groups also contend that the presence of a strong arts network makes it easier for corporations to attract high-quality personnel.

Sills and Houseman spoke for about 90 minutes on the theme “The Arts Are Everybody’s Business.”

Independent Sector, an umbrella organization for 300 major charities and the foundations and corporations that fund them, has studied the likely impact of tax reform.

It estimated that arts organizations would suffer a 24% loss in donations if the Treasury Department’s proposal were adopted in full. The study said that this would occur because reform would reduce the tax benefits of charitable gifts. Private foundations gave about $277 million to arts and cultural activities in 1983, the most recent year for which data is available, according to the American Assn. of Fund Raising Counsel . The association estimated that corporations in 1983 gave more than $300 million to arts and cultural activities.

Foundations and corporations, together, gave more than three times as much to support artistic and cultural activities as the federal government did through the National Endowment for the Arts.

The NEA’s budget is $162 million this fiscal year, its 20th. The Reagan Administration, which has tried unsuccessfully each year to cut the NEA’s budget, proposed an 11.7% cut in the 1985-86 budget.

Sills said that government at all levels is moving to cut arts funding because “the arts are still considered to be a frill.”

Sills and Houseman both assailed this notion, saying they believe that integrating the arts into the daily lives of most Americans is crucial to perpetuating civilized society.

Because of the “frill” attitude, Sills said, money exists to bus children, especially from poor neighborhoods, to “the great temples” to see opera, ballet and theater. But, she added, little money is available during regular school hours to develop children’s creative interests and instill in them an interest in the arts.

“We’ll cut 10% here and 10% there because 10% of nothing is still nothing,” is the attitude of many government officials, Sills said.

Referring to the NEA’s budget, she said that $162 million “divided among all of this country is just . . . just hardly worth worrying about.”

Sills noted that she served on a presidential task force to find innovative ways to increase private support for the arts to compensate for government cuts.

“The only thing we came up with--and it wasn’t very innovative--was tax incentives” to encourage more donations. “And so a report was written and the next thing we hear, there is a proposal for tax reform,” she said. “Unfortunately, not the reforms we were talking about, but exactly in the reverse direction.”