The Arts Mean Business

How investing in culture revs up our economic engines

Volume CIX, No. 1January, 2009

Paul Molloy


“The deficit worriers have it all wrong. Under  current 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. The bottom line, then, is that people who think that fiscal expansion today is bad for future generations have got it exactly wrong. The best course of action, both for today’s workers and for their children, is to do whatever it takes to get this economy on the road to recovery.” — Paul Krugman, writing in  the New York Times on Dec. 1.

Imagine the following scenario. To save money, the governor and the legislature decide to eliminate 20 percent of the personnel at the State Liquor Authority.

Shortly thereafter, a large number of New York’s hotels, restaurants, bars, clubs, supermarkets, sports arenas and entertainment complexes experience excessively long delays renewing their liquor licenses.

During the lengthy interim, all affected entities are prohibited from selling or serving alcoholic beverages.

Patronage drops, businesses suffer terribly and many go under, resulting in thousands of lost jobs.

Needless to say, the negative economic ripple effect occurring under this imagined situation would be devastating.

Could this ever happen in the real world? Not likely. 

Why? Because the economic benefits of those industries to our communities and to local and state coffers are blatantly obvious and easily understood by lawmakers.

Hotels, restaurants, entertainment complexes and the like generate billions of dollars in wages and tax revenues and provide millions of jobs statewide. 

And therein lies the crux of our dilemma within the arts community:

The positive economic impact of the arts industry at local and state levels is neither obvious to nor easily understood by far too many of our elected officials.

As a result, arts industry budgets too often go the way of the budget axe under the guise of fiscal responsibility.

Put another way, in order to save money, lawmakers slash funding for programs that actually benefit local and state economies, create jobs and generate the very revenue for the budget gaps they seek to close in the first place.

Case in point: As part of his plan to address the state’s budget deficit, Gov. David Paterson has proposed $5.2 billion in cuts to help close the gap.

His proposal includes a $7 million cut from the New York State Council on the Arts’ budget.

This comes on the heels of a $2.6 million cut the agency suffered a few months ago.

If the governor’s cuts are enacted, it would represent a nearly 20 percent reduction in the State Arts Council budget — to $39 million from $49 million — mid-year.

The economic damage to the arts industry would be palpable.

In an average year, the New York State Council on the Arts issues grant money to about 2,600 recipients.

If these cuts were to occur, approximately 800 organizations would receive almost nothing.

Local economies statewide would suffer, further exacerbating bad economic circumstances.

In response, Local 802 participated in the Arts Action for New York’s grassroots e-mail campaign to lobby our State lawmakers to remove the Arts Council budget from the cut list.

Additionally, Local 802 officers, staff and members of the Executive Board called dozens of lawmakers, including Assembly Speaker Sheldon Silver and Senate majority leader Dean Skelos.

Peter Fand, Local 802 member and director of arts education for CREATE!, enlisted the help of many of his friends and colleagues in this endeavor.

CREATE! is a nonprofit organization that provides arts education in New York City’s public schools. It is a NYSCA grant recipient and Fand is worried about the impact these proposed cuts will have on the beneficiaries of CREATE!’s programs.

“We’re very aware of the work of the New York State Council on the Arts and the effect its grant money has,” Fand told Allegro. “I’ve watched as the money disappears, and it stands to erase all progress made by CREATE! over the years.”

Unfortunately, despite all of our efforts, we were not successful. On Dec. 16, Gov. Patterson announced an austerity budget with the $7 million Arts Council budget cuts intact.

The arts are a luxury? Above, (clockwise, from top left) Republicans John McCain, John Ashcroft, Newt Gingrich and Jesse Helms all supported efforts to cut the arts. Helms was particular outraged when photographer Robert Mapplethrope won an NEA grant. Below, Mapplethorpe’s photo of Ken Moody and Robert Sherman (1984). Who owns the arts? We all do!


It wasn’t always like this.

The current system in the U.S. to fund arts programs began just over four decades ago with the creation of state arts agencies.

Their purpose was to make it possible for citizens to participate in the arts and to give greater local control over arts funding decisions.

State arts agencies were specifically structured to award grants based on artistic value, avoiding the political, personal and ideological whims of politicians. Funding decisions were made based on the input of the local arts communities. The money came from the federal government.

They operated largely outside the influence of elected officials and thrived this way for about 20 years.

According to a Wallace Foundation study, state officials seemed content to let the budgets of state arts agencies grow, to allow them to manage their own affairs, and, in general, to treat them with “benign indifference.”


The benign indifference of the 80’s came to a crashing halt in 1989 and worsened throughout the 90’s.

Certain federal legislators revealed their animus toward public arts funding, declaring a “culture war” by deeming the work of some publicly funded artists to be offensive.

In 1989, outraged by the art of NEA grant recipients Andres Serrano and Robert Mapplethorpe, Republican Senator Jesse Helms of North Carolina attached an amendment to the NEA appropriations bill, which sought to deny public funding to art he considered “obscene.” (By the way, Senator John McCain supported the amendment at the time.)

Although the Helms Amendment was eventually defeated, some of its language was written into the appropriations bill that Congress passed in October 1989.

Known as Public Law 101-121, its restrictive language exposed a fundamental hostility by certain members of Congress to that which differs from their personal tastes, effectively politicizing public arts funding in America.

In late 1994, Newt Gingrich further ratcheted up the anti-arts rhetoric by announcing his desire to defund the Corporation for Public Broadcasting, the National Endowment for the Arts and the National Endowment for the Humanities, declaring them “elitist,” fiscally wasteful and unnecessary.

In 1999, Senators Robert Smith and John Ashcroft, Republicans from New Hampshire and Missouri respectively, unsuccessfully sponsored an amendment which would have eliminated all funding for the National Endowment for the Arts. (This too, received John McCain’s support.)

The war on culture was a success among social conservatives nationwide, who were sold on the notion that taxpayers shouldn’t have to fund anything they find offensive. (It should be noted that bomb production, the death penalty industry and other taxpayer-funded expenditures that may be offensive to many other Americans were not part of that debate.)

This movement, coupled with the Democrats’ collective failure to effectively and irrefutably frame the myriad benefits of a publicly funded arts industry, emboldened Republican lawmakers to slash the NEA’s budget.

From the time Republicans took control of congress in 1995, the NEA’s annual budget went from $162.3 million down to $97.9 million: a 40 percent reduction in four years.

It has rebounded in recent years, with a 2004 budget of $121 million. And for fiscal year 2008, the budget was $144.7 million.

While it was Republicans in Congress that led the ideological war on public arts funding, it is important to note that in New York State, Democratic Governor Mario Cuomo, in the all-too-familiar name of saving money, cut the budget of the New York State Council on the Arts from $54.3 million in 1990, to $22.9 million in 1993.

It’s up to all of us to convince (clockwise, from top left) Gov. David Paterson, Senate majority leader Dean Skelos and Assembly Speaker Sheldon Silver that the arts are worth saving in New York State. Local 802 member Peter Fand (bottom right) is doing his part: he enlisted the help of his friends and colleagues to make calls to Albany to lobby for arts support.


The fallout from the ideological and budget battles have left in their wake a number of misconceptions among lawmakers about the necessity of a publicly-funded arts industry.

Some who supported the culture wars of the 90’s continue to embrace its false arguments and manufactured controversies.

Others are simply unaware of the positive economic ripple effects the arts industry has beyond the arts community.

Moreover, some hold the view that a thriving arts industry and economic prosperity cannot exist simultaneously or that one has nothing to do with the other.

However, existing data clearly proves otherwise.

  • According to a report by the Alliance for the Arts, the arts industry in 2005 contributed $25.7 billion to the New York State economy.
  • It created 194,000 jobs, generating $9.8 billion in wages and $1.2 billion in taxes to the state.
  • Nationwide, the nonprofit arts industry contributed $173.9 billion in economic revenue, 5.75 million full time jobs and over $29.6 billion in government revenue.

Equally significant — and this is what we need to emphasize to our legislators — is the multiplier effect on non-arts industry businesses when patrons attend a local arts event (i.e. parking garages, restaurants, etc.).

In 2005, this additional spending (excluding New York City and Los Angeles) was estimated at $103 billion.

In New York State, the multiplier is 1.98, which means that for every dollar directly spent on an arts event, an additional 98 cents is generated in the state economy.

In other words, the arts industry is good for all business.

Sam Samuelson, talent agent and co-owner of the Wilmette Theatre in Wilmette, Illinois affirms the positive impact the arts industry on local business.

In 2006 he and his business partner, Carole Dibo purchased the theatre, which had been closed for many years, saving it from being refashioned into a furniture store.

They now offer a wide range of entertainment that includes movies, concerts, cabaret, comedy acts, lecture series and children’s shows.

“The local community credited us with revitalizing downtown Wilmette,” Samuelson told Allegro. “The children’s clothing store across the street added Saturday hours to accommodate families attending our children’s shows and the local breakfast places saw a real jump in business too.”

“The bars extended their hours for our late-night concert-goers,” Samuelson added. “And the ice cream place next door does a booming business after our movies let out.” 

In addition to the economic and quality-of-life benefits of local support for the arts industry, communities that invest in the arts benefit from what the Alliance for the Arts calls “arts-motivated visitors.”

These are tourists who travel to a particular city specifically to attend arts events or visitors who extend their stays that were originally for another reason to attend an arts event.

In New York City, this group contributed $5.4 billion in economic activity in 2005, which includes expenditures on food, travel, tickets and admission fees and shopping.


The governor’s proposal to cut the budget of New York State Council on the Arts again mid-year is economically unsound and contradictory to his intended purpose.

Just as you don’t distribute half-off cigarette coupons in high schools to reduce teen smoking, you don’t further compromise an economic engine that creates jobs and puts budget gap-closing revenue into local and state coffers in order to save money.

We must take our case to Albany as citizen lobbyists, demonstrating the wrong-headedness of further cuts to the state arts council budget.

Our lawmakers, like us, are not walking encyclopedias. They rely on us to keep them informed on the issues that affect our communities, our lives and livelihoods.

If they aren’t conversant on this subject, it is incumbent upon us to change that.

If the budget of the New York State Council on the Arts is cut again, it will be because we failed to inform, educate and persuade.

Citizen lobbying is easy. You don’t need to be schooled in the intricacies of government, legislation or politics to lobby for a particular cause.

Think about it: If the landlord of your 20-story apartment building decides to eliminate the elevators to save money, do you really need a background in elevator technology to make the case that such a choice is not only illegal but will cause tremendous harm to the tenants? All you need to lobby your legislators is a pulse, a phone and a position.

We must confront the myth that people and their governments must choose between art and economic prosperity.

As the data clearly shows, they are interwoven, with one benefiting the other.

In the words of Robert L. Lynch, president and CEO of Americans for the Arts, “Leaders who care about community and economic development can feel good about choosing to invest in the arts. Nationally and locally, the arts mean business.” 

For lobbying opportunities, see Mary Landolfi’s president’s report or contact me at (212) 245-4802, ext. 176 or