STUDY SHOWS ARTS’ PAYOFF FOR ECONOMY

Performances, exhibitions and educational programs of California’s nonprofit arts organizations pump $5.4 billion annually into the state’s economy, making the arts more than twice as powerful an economic engine as they were a decade ago, according to a study unveiled Thursday by the California Arts Council, the state’s beleaguered arts-funding agency.

The findings of the $125,000 survey “substantiate the significant role of the nonprofit arts to California’s well-being,” Arts Council chairwoman Barbara George and outgoing director Barry Hessenius wrote in a preamble to the 100-plus page report. Titled “The Arts: A Competitive Advantage for California II,” the study is based on data from 2002 and 2003; it follows up on a similarly titled survey the Arts Council published in 1994.

The group commissioned the study late in 2002, after the second of three consecutive budget cuts that slashed its funding from a peak of more than $30 million in 2000-01 to the current $3.1 million -- which places the state a distant last nationally in per capita funding of the arts. Gov. Arnold Schwarzenegger has proposed keeping it at that level for the coming year.

Arts advocates hope the study will give the state Legislature a fresh argument for reversing the decimation of the Arts Council, which has seen its granting power virtually obliterated. But state Sen. Jack Scott (D-Altadena), who chairs the Joint Legislative Committee on the Arts, is not optimistic, given the state’s severe budget crisis. “There’s a possibility [of increases], but I’m trying to be realistic,” he said Wednesday.

The state’s nonprofit arts groups -- about 10,000 in all -- spend $2.2 billion a year, the study found; about $1 billion of that amount comes from donations. Then come the economic ripple effects, including arts organizations’ employees spending their paychecks and arts attendees springing for restaurant meals, parking, souvenirs and the like when they take in a performance or museum exhibition. With those add-ons, the survey calculated, the arts’ overall contribution to the state economy rises to an estimated $5.4 billion, up from $2.15 billion 10 years ago. Adjusted for inflation, the increase still represents more than a doubling in real economic value derived from the arts.

The study estimated that attendance at nonprofit arts events is 71.2 million a year -- a figure that includes free educational programs and festivals as well as paid admissions. Of those, 6 million are tourists.

Similar studies across the nation have proliferated over the last decade. Arts advocates want to build a case that arts donors, including state and local governments, are boosting the economy in addition to promoting more traditional benefits associated with the arts, such as creating community pride and a legacy of cultural achievement.

The economic argument for the arts has its doubters.

“These studies don’t mean anything. It’s a kind of propaganda,” says Tyler Cowen, an economist from George Mason University in Virginia, who has written extensively on the interrelationship between commerce and culture. For such a study to prove an economic case for the arts, he says, it would need to show not only that the arts generate a lot of spending but also that the effect exceeds other possible uses of the same money.

Jack Kyser, chief economist of the nonprofit Los Angeles Economic Development Corp., agrees that such a comparison is a missing element in studies on the economic effect of the arts. At the same time, he said, he knows of no economists who have disproved the arts’ effectiveness as an economic engine. Studies such as the new one by the Arts Council can be useful economic development tools, Kyser said, because “when firms are making decisions about moving to a location, quality of life, culture and the arts always come up.”

The study was conducted by Diane L. Mataraza, a Cocoa, Fla.-based arts consultant and former department head at the National Endowment for the Arts. She said her team gathered spending and attendance data from 538 arts groups, including the 200 largest. Information on spending by people who attend arts events came from a written survey of 7,200 people. The authors, including the study’s economist, Eric Thompson of the University of Kentucky, used statistical methods, such as economic multipliers, to extrapolate statewide estimates from the more limited survey samples.

State Rep. Mark Leno (D-San Francisco) says it’s “wishful thinking” that the new study will shake loose more money for the arts in the coming year’s budget. He says he is trying to lay the groundwork for a long-term solution: a 1% fee on all entertainment admissions, including pop concerts, sporting events and movies, that he says would guarantee about $35 million a year in state arts funding.

To provide a more immediate boost, Scott is proposing an increase in the fees charged for special arts license plates. It could raise an additional $650,000 a year for the Arts Council, Scott says.

At a news conference in Beverly Hills on Thursday, 11 arts leaders detailed points of the new study and said it justifies expanded arts funding in the state.

Robert Rosen, dean of the UCLA School of Theater, Film and Television, said that to underfund the arts is “to kill the goose that lays the golden egg.”

“This is a message to the governor and anybody else,” he said. “It’s really counterproductive to cut the arts.”