California Arts Council Waits for Verdict on Budget Crisis

The California Arts Council is struggling to swim against a tide of red ink washing across state arts agencies in the East, South and Midwest, but the Sacramento council may face a new loss of more than $1 million in funding this year.

And while arts council officials and state arts leaders ended last week with more optimism than they began it, the state arts agency could still be driven into an even more drastic budget crisis. The result will become known as the Legislature struggles, between now and sometime in June, to cope with the largest deficit in the state’s history.

The possible $1 million budget reduction, which is to be deliberated at an Assembly subcommittee hearing in Sacramento on Wednesday, would come principally from the arts council’s administrative budget and could force major changes in the way the agency evaluates grant applications. But the amount of money available for the grants themselves would be unchanged.

The arts council’s pending budget request is for $16.4 million--$962,000 of which would come from the federal government.

To confine its losses to the vicinity of just $1 million would represent something of a fiscal miracle in the context of state arts funding elsewhere in the country. In what is increasingly a regionalized pattern of fiscal emergency, state governments in the East, Midwest and Florida are either implementing or considering breathtaking arts council budget reductions.

The cuts are on top of the loss of more than $18 million nationwide in state arts funding last year--a trend that prompted National Endowment for the Arts Chairman John E. Frohnmayer to warn in February of “severe disconnects” in the national web of public support of the arts. The Frohnmayer warning predated the new round of pending major state arts funding reductions.

Michigan’s governor last week signed an executive order cutting $11 million of the state arts council’s $11.5 million budget and transferring the agency to the state commerce department, where it would not be allowed to make any grants at all. The legislature there has until May 18 to override the order, but council officials said they do not expect lawmakers to act in time.

The Florida legislature is considering budget cuts there totaling 57% of the arts council’s $23.4 million budget.

New York lawmakers may cut their arts council’s $51.3 million appropriation by 56%. Ohio is considering a 50% cut from $12.1 million this year and Pennsylvania 25% from $11.7 million. New Jersey may cut 8%--but only because that state’s arts council took a 41% hit last year. Arts councils in Massachusetts, Virginia and Illinois are also in trouble.

The degree to which the California Arts Council may be at risk in the deteriorating fiscal situation in Sacramento has begun to concern the National Assembly of State Arts Agencies, the Washington-based association of state arts councils. Jeffrey Love, NASAA’s research director, said last week that, despite the efforts of Gov. Pete Wilson and the Legislature to spare the arts council, the California fiscal situation may eventually force the Legislature to follow the lead of the Eastern states and order major cutbacks in the state’s arts budget.

Elsewhere in the West, said Love, legislatures are largely managing to find new money for the arts, despite the nationwide recession.

But Ed Dickey, director of state programs for the NEA, emphasized that California is not yet on the emergency list of states with major arts funding problems. “We are looking at a fairly tough year in the economy, especially in the Northeast, Mid-Atlantic and Upper Midwest,” Dickey said. “While we are watching some situations (elsewhere) with concern, I think that most states will come through the immediate future in relatively good shape.”

In a sense, said Susan Hoffman, executive director of the California Confederation of the Arts, the California Arts Council may appear comparatively solid now because of damage it has already sustained. The agency received flat funding throughout the administration of former Gov. George Deukmejian and fell well out of its previously accustomed ranking near the top of the country in terms of money spent per capita on the arts. In effective terms, its spending power declined under Deukmejian.

Nationwide, last year California ranked 39th in per capita state government arts spending--well below the Marianna Islands, Puerto Rico, Utah, the Virgin Islands, New Mexico and North Carolina. Despite the fiscal drubbing they have taken, New York, New Jersey, Ohio and Florida all rank above California in per capita arts spending.

In terms of preserving the status quo for arts in the state, said Hoffman: “I think the signs at this point are more optimistic (than they were at the beginning of last week). With the governor’s press conference, he remains constant on the budget.”

The arts council is expected to produce at least some details of how it would implement the reduction at the Wednesday hearing. The potential loss of about $975,000 looms as a result of a request by Assemblyman John Vasconcellos (D-San Jose) that every agency in state government prepare to absorb a 30% reduction in its administrative budget.

Earlier this year, Wilson implemented a 4% across-the-board reduction in all agencies’ 1992 funds under a deficit-reduction formula adopted by the Legislature last year. Last week, before Wilson’s Thursday press conference announcing a package of new taxes and spending cuts to try to deal with a projected $12.6 billion deficit in the next fiscal year, arts council officials feared the agency might be targeted for enormous cuts on top of the original Wilson proposal.

Administrative cost cuts proposed by Vasconcellos would be in addition to the 4% Wilson reduction--an action that struck $586,000 from the arts council budget in early January..

Earlier, the office of Legislative Analyst Elizabeth Hill proposed a series of options to control the deficit that included complete elimination of the arts council--on the theory that private sector money could be substituted for state arts grants. The concept has attracted limited support from Assembly conservatives, including Assemblyman Tom McClintock (R-Camarillo), who made a similar proposal.

But in the end, the governor failed to include the arts council among agencies for which large cuts are under consideration. And on Friday, a spokesman said Wilson has apparently concluded that the state’s deficit emergency is so extreme and the amount of money in the budget for the arts so small that the arts council might escape drastic cuts because it is too small to make any difference.

“You have to look at where all of the large money is going, otherwise you’ll never close the gap,” said Bill Livingstone, Wilson’s press secretary. “By shutting down the arts council, you will not solve the budget crisis.”

“I’m cautiously optimistic that we can hold our own,” said Kathi Stockdale, co-acting director of the arts council. “I wouldn’t presume to second guess what the Legislature is going to do. This is a very, very hard year for both the Legislature and the governor. I’m just hopeful that we can stay where we are.”