Arts Budget Proposal Tied to Private Aid : Nearly All of Governor’s Increase of $1.1 Million Must Be Matched

As part of his overall state budget proposal for fiscal 1988-’89, Gov. George Deukmejian has sent the Legislature a request for an increase of $1.1 million for the California Arts Council. But nearly all of that money, earmarked for a new “California Challenge Program,” must be matched with funds from new, private-sector sources only.

Deukmejian, who has advocated increased reliance on private funding of the arts, has been prompting the council to establish such a program at least since 1984, says Council Chairman Harvey Stearn. Currently, 18 other states have similar “challenge” programs.

In California, the proposed program would award grants to arts organizations with annual budgets of $200,000 or more. Only county and city arts agencies would be allowed to match their grants with some public money; other grant recipients would have to match the council funds with non-governmental donations.

The governor proposed raising the council’s budget for the 1988-’89 fiscal year, which begins July 1, to $15.7 million (including about $923,000 in federal funds). That represents about a 7.5% increase over the council’s current budget.

The council had requested about $850,000 more for the new challenge program, and also hoped to add to its current $14.5 million-budget, about $1.2 million for other ongoing grant programs, all of which allow all recipients to match awards with private and public funds. Except for about $70,000 for a folklorist to head a new folk arts program, the governor asked for no other increases to grant programs.

Reaction to the budget request was mixed.

The proposal will probably cause arts organizations “to really make a sharp cry for more money,” said Susan Hoffman, director of the California Confederation of the Arts, the state’s arts advocacy organization. “It’s only about a fifth of the way there. . . . 3,000 grant applications came into the council last year; less than 1,000 were funded.”

California currently spends about 50 cents per capita on the arts--ranking 26th among the states in arts funding. Confederation members would like to see per-capita spending doubled by 1990.

However, Stearn, a Deukmejian appointee, said in a phone interview that even though the governor didn’t request everything the council had hoped for, “it was important to get the (challenge program) going, even if we had to take a flat budget on existing programming. . . . The $1 million was really our bottom line; that was what we felt was necessary to make the program work.”

The challenge program is a top priority of the council, Stearn explained, because, besides being a pet project of the governor’s, it could generate more money for the arts than other council programs. Existing grant programs require only a one-to-one match, but the new program requires either a two- or a three-to-one match. Thus, the $1 million requested by Deukmejian could generate $3.3 million, according to Council Director Robert H. Reid.

Indeed, if the program is successful, funds generated by the new program in the future may be rolled over and applied to all council programs, Reid said. This could potentially increase the council’s overall budget each year more than a typical legislative increase, which has not totaled more than about $1 million annually since 1980.

Reid, one of the challenge program’s strongest allies, also noted that the governor’s proposed increase exceeds the Gann limit, which caps state spending on any program at 6.5%. “Which means (Deukmejian) took a couple of million dollars from (another program),” he said.

However, former council member Consuelo Santos-Killins, who, Reid said, is expected to be reappointed by the Legislature this month, was not as satisfied with Deukmejian’s action.

“I understand we have budgetary restraints,” Santos-Killins said, “but the arts in California, which are tremendously forward-looking and progressive, not only have a profound impact on our own people, but on the nation. . . . We can’t continue to underfund the very fountainhead of creativity.

“Hopefully, the governor’s newly funded challenge program will be the catalyst which will leverage new private money to meet the current needs.”