There are two industries that are critical to the economic well-being of New York State: the arts and tourism.
According to a recent study, 42.6 million tourists visited New York City, spending $22.8 billion and generating $5.44 billion in tax revenue.
Of that number, 7.5 million came to New York City specifically to attend cultural events.
Put another way, 17.6 percent of the tourists who came to New York City played a critical role in the life of the arts economy.
What if that number were to increase, to 25 or 30 percent?
What implications would that have for the arts industry?
To put a finer point on this: what would that mean for our members and others in this business in terms of jobs and economic stability?
Let’s take this one step further.
In order to attract a greater number of the tourists who visit New York to attend cultural events, at least two things must occur.
There must be sustained and increased funding for the arts sector, coupled with a comprehensive strategy to attract the people willing to invest their hard-earned dollars in this industry.
In short, more events and more cultural tourists equals more work.
Sounds nice, but that would require government funding.
Is it possible to invest in the arts industry and promote tourism in a lousy economy?
If so, what would you be willing to do to make this case to the people who can make it happen?
Gov. Paterson recently announced that the state has a $2.1 billion budget deficit due to a drop in sales and income tax revenue.
He went on to say that steps must be taken to “control costs,” which is a thinly-veiled euphemism for mid-year budget cuts – again.
(Do you sense a Yogi Berra quote coming on?)
And so it goes: the debate rages on over the best methods for the state to attract urgently-needed, gap-closing revenue to plug this $2.1 billion hole in the budget
Last December, when faced with a $12.5 billion budget shortfall, the governor proposed a series of budget cuts, including 137 onerous nuisance taxes, among them the “ticket tax.”
Additionally, the New York State Council on the Arts was facing a $7 million mid-year cut, just months after a $2.6 million cut it sustained in August 2008 (nearly 20 percent of its total budget for that fiscal year).
At that time, I wrote that the state legislature would never make similar cuts to the personnel at the New York State Liquor Authority who process applications and issue liquor licenses.
Imagine what would happen if 20 percent of New York’s hotels, restaurants, bars, clubs, supermarkets, sports arenas and entertainment complexes experienced long delays renewing their liquor licenses.
All affected entities would be prohibited from selling or serving alcoholic beverages.
Patronage would drop, businesses would suffer terribly and many could shutter, resulting in thousands of lost jobs.
The economic domino effect would be devastating.
The economic benefits of those industries are obvious to lawmakers: hotels, restaurants, entertainment complexes and the like generate billions of dollars in wages and tax revenues and provide millions of jobs statewide.
And yet the arts industry is a significant economic engine in New York State as well.
According to a recent study, the arts industry (both commercial and nonprofit) generated $5.7 billion in economic activity, provided 194,000 jobs, created $9.8 billion in wages and sent $1.2 billion in tax revenue to Albany.
With results like that, one might naturally conclude that the government would want to make greater investments in the arts industry.
And therein lies the problem: unlike the hospitality sector, the positive impact of the arts industry on local and state economies is not obvious to many of our elected officials.
Local 802 embraces a progressive economic view, advanced by Nobel laureate Paul Krugman, who wrote that in these economic conditions, “There’s no trade-off between what’s good in the short run and what’s good for the long run; strong fiscal expansion would actually enhance the economy’s long-run prospects.”
In other words, you can’t cut yourself out of a recession.
Cuts in a major economic engine like the arts industry eliminate jobs and arts events, reduce ancillary spending and create fewer tax dollars for local and state coffers.
Further, it tells local arts patrons and cultural tourists to stay home.
An important component to economic recovery is to invest in industries that create jobs, stimulate spending in other sectors and generate significant tax revenues.
This ideology informed our strategy when lobbying in early 2009 to save NYSCA and to expand the Empire Film Production Tax Credit program.
Consider the far-reaching economic effect NYSCA has on the nonprofit arts sector: a total of 2,628 nonprofit cultural organizations were identified in New York State in 2005.
In an average year, NYSCA issues grants to 2,600 of them.
In the last fiscal year, the NYSCA budget was reduced mid-year by $6.1 million.
This cut, combined with a poor economy, has had a devastating effect on the nonprofit arts sector.
Another recent report stated that nearly three quarters of performing arts organizations, the majority of which are located in Manhattan, indicate that they have reduced their budgets or plan to do so.
Among the 50 organizations, some of which have staffs of over 300, 38 percent intend to lay off employees and 34 percent are canceling or postponing programming.
Action on the state level
As our lawmakers in Albany begin the debate on how best to close the state’s $2.1 billion budget hole, it is incumbent upon us to contact our assembly members and state senators and tell them not to cut the NYSCA budget.
If you earn income from a nonprofit arts organization, let your legislators know how that work keeps you and your family solvent.
Remind them that nonprofit culture alone generated $7.7 billion in economic activity, created 55,100 jobs, provided $2.8 billion in wages and send over a quarter billion dollars in tax revenue to the state.
Quite simply, arts equals jobs.
The tourists I referred to earlier are known as “arts-motivated visitors.”
They’re the people who travel specifically for cultural reasons or who extend a trip intended for another purpose to attend an arts event.
Statistically, they spend more and stay longer than other tourists.
The report I mentioned at the top of this article indicates that in 2005, arts-motivated tourists spent $3.7 billion in ancillary expenditures (restaurants, hotels, shopping, etc.), generating a total economic impact of $5.4 billion for New York City.
Attracting their patronage and giving them good reason to continue spending in such large amounts is crucial to our industry’s economic survival.
Recognizing the significant impact of tourism on the American economy, the U.S. Senate recently began consideration of, the Travel Promotion Act of 2009 (S. 1023).
The House will take up this legislation later in the year.
This bill has considerable bipartisan support (53 cosponsors) and according to Americans for the Arts, it would create a public-private partnership to promote travel to the United States and help the United States compete with other countries.
There’s just one problem: the bill in its current form doesn’t specifically mention cultural tourism.
Nor is there any mention of the nonprofit arts and culture sector in any of its policy proposals.
While this bill calls for a global advertising strategy to generate travel to the United States, it overlooks an important statistic from the U.S. Travel Association: cultural tourism is the most popular marketing strategy used by national tourism organizations.
Any national tourism strategy must include cultural tourism.
Action on the federal level
This is a great opportunity for our government to promote the U.S. as a major cultural travel destination to international visitors.
If successful, we all stand to benefit.
However, without specific language addressing our industry and our audiences, the growth needed to create more jobs and to sustain existing ones will be hobbled.
I’m asking you to contact our senators (and later, our representatives in the House) and urge them to include cultural tourism and the nonprofit arts and culture sector in the Travel Promotion Act of 2009.
Continued funding for the nonprofit arts industry at the state level, combined with an aggressive international marketing strategy targeting cultural tourists, could very well provide an essential piece of the economic recovery puzzle in New York State.
We’ve made it very easy for you to contact your elected officials.
To get a list of your State and Federal lawmakers, please visit our legislative action page at http://capwiz.com/local802afm/dbq/officials/
For the sources of any data mentioned in this article, e-mail me.