NEA to Cut Grants in Response to New Legislative Requirements : Arts funds: Nearly 600 grants to artists, arts groups will be eliminated while more money will go to state arts councils.

The National Endowment for the Arts will drastically cut the number of grants it makes, lopping off nearly $13 million in funding to artists and arts groups this fiscal year and drastically reducing--even wiping out--whole grant categories.

The wide-ranging budget reduction, described in detail in two NEA letters to key arts supporters in Congress, is to affect hundreds of grants.

The so-called “reprogramming” of NEA money is to take effect late this week or early next week, when the arts endowment plans to disperse the first 1,200 grants for fiscal 1991, ending a monthlong suspension of all new grant-making.

The delay in beginning the fiscal 1991 grant-distribution cycle was imposed so NEA officials could assess damage from major changes in the arts endowment’s enabling legislation, passed by Congress in October. The alterations nearly double the percentage of the NEA budget earmarked for direct grants to state arts councils.

NEA documents show that the agency plans to make 576 fewer grants this year than the 4,328 it had originally planned for individual artists and arts organizations. The reductions will, among other things, lock out of NEA funding 15 of 180 symphony orchestras scheduled for endowment support and cut off money to 18 of 120 professional dance companies.

National Council on the Arts member James Wood, director of the Art Institute of Chicago, called the reductions “very substantial cuts to all of our areas” that could fairly be described as “huge.”

And in a letter reluctantly approving the proposed NEA budget revisions, two congressmen described the new grant-making plan as “a significant departure” from previous years. The letter, from Reps. Sidney Yates (D-Ill.) and Ralph Regula (R-Ohio), urged the NEA to try to minimize gross cuts in the number of grants in a variety of the arts endowment’s best-known programs.

Randy McAusland, the NEA’s deputy chairman for programs, said that the urgings of Yates and Regula would be heeded as much as possible. However, Yates and Regula approved the reprogramming plan; their plea to try to avoid cutting out hundreds of entire grants came at the end of their letter, more as an exhortation than as an instruction.

The new law extends the arts endowment’s life through 1993 but increases, from 20% to 35%, the amount of money earmarked for support of state arts councils. The shift of money, which was made after the NEA’s proposed 1991 budget had been put in final form, necessitated massive reassignment of funds and gutting some funding categories, including drastic cuts in some of the NEA’s best-known programs.

Congress gave the NEA $175 million this year, up nearly $4 million from last year, but still nearly 50% less in terms of real spending power than the arts agency enjoyed 10 years ago. Direct support to the states will increase from $26.1 million to $37.7 million. Grant-funding will also be reduced by increased administrative costs and other factors.

A detailed description of grant cuts that the NEA plans to impose was presented here Friday and Saturday to a special meeting of the NEA’s advisory National Council on the Arts. The plan, in which some NEA programs will find their grant funds reduced by more than 17%--though others by as little as only 7% to 8%--brought immediate reactions of concern, both from Yates and Regula and members of the arts council itself.

Arts council members protested that the shift in funding to state arts councils is occurring at a particularly difficult time in view of the damage that the shifts will do to NEA grant programs. Many state legislatures are currently searching for ways to slash state spending schedules, and state support to arts councils is endangered across the country. This makes it increasingly likely, they argued, that additional NEA money given to the states cannot produce any effective, real increase in arts spending.

New York state Sen. Roy Goodman, a National Council on the Arts member, arrived at the weekend arts endowment meeting from an all-night session of the New York legislature in Albany where, he said, the New York State Arts Council appeared headed for major cuts in its state funding. Florida state Sen. Bob Johnson, another arts council member, said that his state plans to impose across-the-board reductions totaling 7 1/2% that will affect the Florida Arts Council.

Arts observers have predicted that nearly every state will face difficult choices in terms of devastating--even eliminating--its arts council in the next 12 to 24 months as the nationwide recession evolves. The state funding crisis will occur, predicted national council member Harvey Lichtenstein, director of the Brooklyn Academy of Music, just as arts organizations find corporate and other private support increasingly difficult to get.

Johnson and other council members said that they were concerned that, just as the NEA is forced to hack off major parts of its national grant program to transfer money to the states, financially hard-pressed legislatures would substitute the new federal money for previous state funds. The net result, said Johnson and other council members, may be that state budgets still face reduction--even with the increased money earmarked from the NEA--at the same time that national grant programs are gutted.

NEA chairman John E. Frohnmayer confirmed that precisely such a scenario may develop. “Unfortunately, we are faced with that possibility,” Frohnmayer said. “It’s almost impossible at this time,” he said, to predict how the nationwide state and federal arts funding situation will shake out.

But while the planned grant reduction program will eliminate or slash some grant categories that normally benefit individual artists, details of the cuts released publicly by the NEA or obtained by The Times from Capitol Hill sources appeared to show that the NEA had struggled to assuage the worst fears among arts observers that politically vulnerable individual artists and small, cutting-edge arts organizations would bear the brunt of the reductions.

National visual artist fellowships and grants to small visual arts organizations--an area that artists had feared might be most at risk--will be protected “essentially” at levels originally budgeted. However, regional visual arts fellowships--awarded to prominent developing artists who are not yet of national stature--would be heavily cut on the assumption that such support would be picked up by state arts councils. In all, responsibility for nearly $2 million in existing endowment programs would be lumped in a category for which states will be presumed responsible.

Concern for the welfare of grant categories that have played a role in creation of some of the most politically charged work in the NEA’s 18-month-old political crisis had emerged almost immediately after Congress passed the new NEA bill.

The NEA’s entire program of support for museum acquisitions of new art objects will be eliminated. Other cuts will reduce the number of jazz fellowships from 75 to 55 and end a special program of grants to small multimedia arts service organizations from which 25 agencies now receive NEA money.

NEA money to the Arts Programming on Television project on public TV would be reduced by half and support will be cut even to the famed Los Angeles- and Washington-based American Film Institute.

Among projected grant reductions in major endowment program divisions are these:

* Dance--A total of 34 grants of 315 originally scheduled, worth $905,000, will be cut. In addition to the cut in support for dance companies, grants to organizations that present dance programs in local communities will be reduced from 65 to 58.

* Literature--Twenty-three of 280 grants cut, worth $300,000. Awards to small literary publishing houses reduced from 104 to 90.

* Museums--Ninety-one of 536 grants deleted, accounting for nearly $1.7 million. Grants for art object acquisition and special projects to be eliminated entirely.

* Music--A total of 111 of 778 grants cut, worth more than $1.7 million. In addition to orchestra and jazz fellowship cuts, the number of chamber music ensembles supported would drop from 95 to 82 and special music presentation and festival grants would decline from 228 to 200.

* Theater--Forty-six of 319 grants, worth $1.2 million, cut. Professional theater companies funded decline from 210 to 205. Special projects and theater presentation grants that specialize in touring productions to be cut in half.