The IRS and Treasury Department are finally starting to bring some clarity to program related investments, releasing a rule that represents the first update in 40 years to the language describing how these financial instruments can be used. Unfortunately, the one arts example in the mix describes a 501(c)(4) “social welfare” organization, rather than the more standard 501(c)(3) nonprofit. This is a little worrisome given that the arts aren’t actually mentioned as one of the categories in the tax code that qualify for tax-exempt status, and 501(c)(4)s are not able to provide a tax deduction to donors.

Elizabeth Quaglieri describes the Obama administration’s Turnaround Arts Initiative, a pilot program spearheaded by the President’s Committee on the Arts and Humanities, the Turnaround Arts Initiative provides arts curriculum resources and the attention of celebrity artists to eight struggling “turnaround schools” across the country. The arts materials are designed to be thoroughly integrated into the schools’ turnaround effort, and the whole shebang will be evaluated by Booz Allen Hamilton after a two-year trial.

STATE

Obviously, the big news of the month was Kansas getting its arts council back, reported here on Friday. Elsewhere, the news is mostly decent. New Hampshire arts advocates were successful in turning back a threat to the state’s Department of Cultural Resources and public art fund by mobilizing more than 100 business leaders, artists, teachers, economic development officials, and others to attend a public hearing, impressive for a small state. A somewhat controversial plan in Connecticut to replace line item funding for arts organizations with a competitive pool also ended up going nowhere. I have mixed feelings about this one – I get that you don’t want to expose institutions to major financial risk on short notice, but as a general practice I think line items for specific arts organizations are pretty undemocratic (because the organizations with the resources to procure them tend to be on the richer side anyway) and bad policy (because the line items are not subject to any kind of centralized performance review by industry professionals who know what they’re doing).

This is slightly old news, but the New York State Council on the Arts reversed the trend of the past four years and came out of the latest budget process with a $4 million increase, to $35.6 million. NYSCA remains the best-funded state arts council in the nation.

LOCAL

The Washington, DC city council has given preliminary approval to an increase in the budget of the DC Commission on the Arts and Humanities from $3.9 million to $11.9 million. That sounds a lot better than it actually is; the increase just partially makes up for a combined loss of over $16 million from the DCCAH and the National Capital Arts and Cultural Affairs program over the past couple of years.

INTERNATIONAL

England cut funding to arts groups two years ago, and the Brits apparently aren’t missing it too much. A survey reports that support for public funding for the arts has dropped from 52% to 44% since 2009. Meanwhile, Scotland’s arts council is moving many of its arts groups to short-term, project funding in an effort to get more mileage out of its shrinking budget.

The Australia Council for the Arts has just completed a five-month review process, its first in two decades, and the results are making some waves. The review advocates that the Council reform its “rigid” structure that silos arts grantmaking by discipline, and also put up much more of its funds for competition as opposed to guaranteeing money to specific institutions. Interestingly, it puts this move under the rubric of emphasizing “excellence,” whereas in the United States that word is typically code for the larger, established organizations.

Turkey has become the latest battleground for the arts and government censorship, with conservative Prime Minister Recep Tayyip Erdogan taking a hostile stance to Turkey’s theatrical community after performances of a Chilean play sparked controversy in Istanbul. The events led to Istanbul’s Islamist mayor taking over decision-making for the city-funded theater troupe that staged the play. Supporting that move, Erdogan also threatened to cut off state funding to Turkey’s theater companies in response to protests and resignations by artists pushing for freedom of speech. The bad vibes apparently date back at least to a performance of a different play when Erdogan’s daughter found herself the involuntary recipient of an onstage actor’s attention during an improvised scene and subsequently walked out of the show. That incident led to the actor, who claimed he didn’t know that the young woman in the front row wearing a headscarf was Erdogan’s daughter, being suspended and brought before the country’s minister of culture to explain himself.

FEDERAL

The President’s FY13 budget request is out, and (as has been widely reported) it includes a modest increase for the National Endowment for the Arts to about $154 million. This is a welcome turnaround from last year, when he kicked arts advocates in the nether regions by proposing (and thus setting up as the best-case scenario) a 13% cut to the agency’s budget, but color me unimpressed nevertheless. The arts community had big hopes upon President Obama’s inauguration that he was finally going to make cultural funding a priority, but at the end of his first term things are pretty much the same as when he came in. We had the best opportunity in decades for a game-changer at the beginning of 2009, and BHO passed it up.

But that’s yesterday’s news, and our cultural policy is what it is. AFTA’s Narric Rome points out some of the easily-overlooked details in the NEA budget request, including the fact that (if funded) the Our Town creative placemaking program’s budget will nearly double to $10 million; the travel budget is being cut by 25%; and Donald Trump (of all people!) is buying out the NEA’s current office building to convert it into a hotel, necessitating a search for new digs.

As we all know, the NEA isn’t the only recipient of federal arts funds. Mike Boehm of the LA Times rounds up the other figures: the Smithsonian gets a 5.6% increase including both its operating and capital budget; the National Gallery of Art gets an 11.2% increase; the Kennedy Center is cut by 2.4%, the Institute for Museum and Library Services essentially gets level funding. The National Endowment for the Humanities’ budget is once again tied to that of the NEA, and the Corporation for Public Broadcasting stays flat.

STATE

Finally, some good news from the state arts council front! After three years of financial carnage, from which Michigan did not escape, ArtServe Michigan scored a threefold increase in the governor’s budget request for the Michigan Council for Arts and Cultural Affairs, and from a Republican no less! Granted, a threefold increase is a lot easier to achieve after your budget has been cut by 81% as Michigan’s was three years ago, but every little bit helps. This also is a success story for the power of data visualization and storytelling, as I’d be willing to bet that the very effective infographic on the promise of the creative economy that ArtServe put out in December had something to do with the victory. Florida is also looking at a welcome potential boost after several tough years in a row.

Unfortunately, some states still can’t seem to catch a break. South Carolina’s governor Nikki Haley has once again called for the South Carolina Arts Council to be eliminated, despite failing to kill it last year; there is now a proposal in the legislature to direct a portion of the state admissions tax to the arts council. And New Hampshire conservatives continue to apply pressure to the state’s Department of Cultural Resources, whose budget is practically nonexistent at this point.

Finally, we have an interesting situation in Kansas, which as you may remember was the first state to have funding for its arts council completely eliminated last year. Governor Sam Brownback is now proposing the restoration of a $200,000 pittance in state subsidy, with the caveat that it will go to a Creative Industries Commission under the Department of Commerce.

Barry Hessenius (former director of the California Arts Council) has an extensive interview with Craig Watson, current director of the California Arts Council. Because of the dire state of California’s finances, Watson reports that more general funds for the agency are unlikely this year, even though governor Jerry Brown is a huge supporter of the arts. For that reason, the CAC is pressing ahead with its campaign to sell one million arts license plates, a strategy that (if successful) would increase the Arts Council’s budget to over $40 million.

Americans for the Arts’s Justin Knabb has a helpful roundup of what’s going on with other states over at ARTSBlog. And if you’re curious about where everybody ended up last year, the National Assembly of State Arts Agencies just put out its annual summary (membership or purchase required).

INTERNATIONAL

We close with a few cautionary tales about the public arts funding. As I wrote earlier this year, it’s entirely possible for governments to have a pernicious influence on an arts ecosystem. Western Europe has managed to sustain cultural norms by which governments generously fund the arts while maintaining a largely hands-off orientation towards content (case in point: Arts Council England’s new £37 million “Creative Places and People” fund), but that doesn’t mean we can count on that always being so. Hungary’s recently elected national conservative government, for example, is making waves for “systematically replacing key figures in cultural institutions, staging pro-government exhibitions, rethinking permanent museum displays and replacing historic statues to fit its political agenda.” On the other side of the political spectrum, Venezuelan demagogue Hugo Chávez has received criticism for trying to appropriate the legendary El Sistema youth symphony program that preceded his presidency by 24 years. (Doug Borwick rightly points out the amazing fact that an arts program would be popular enough to be seen as propping up the political fortunes of a sitting president.)

Don’t get me wrong. I do think there is a role for government arts funding in the United States, especially at the state and local level, and I think that role could and should be expanded substantially in this country. (Hence my frustration that the opportunities to do just that three years ago were not taken by the current administration.) In a way, though, I think the fact that we’ve had to get by without much help from the government has been good for the long-term development of the field. It’s forced us to be much more creative and resourceful about finding allies, building partnerships, and cultivating earned revenue than we might otherwise have been. And in a political environment in which the “culture wars” are expanding beyond cultural organizations, perhaps it’s to our advantage that arts groups simply don’t have that much left to lose from government. That said, with diversified revenue streams in place, increased government support can only make us even stronger – and, more importantly, help to even out the inequities in arts production and access that market-driven alternatives tend to exacerbate.

As you might have heard, public funding for the arts has been under pressure at the local and especially state levels ever since the recession hit a few years ago. This year, those pressures have spread to the federal government as well, and during the recent negotiations between Democrats and Republicans in Congress to agree on a budget for the remainder of the current fiscal year and avert a government shutdown, there was worry that the National Endowment for the Arts, the Arts in Education program at the US Department of Education, and the Corporation for Public Broadcasting would face some of the heaviest burden in the drive to cut $39 billion from the current year’s budget.

As it turned out, the arts did suffer as a result of the cuts – but all things considered, it could have been worse. According to Mike Boehm’s excellent roundup at the Los Angeles Times’s Culture Monster blog, the National Endowment for the Arts‘s budget was given a haircut of 7.5% from this year’s approved level of $167.5 million to $155 million. That’s the same amount as was funneled to the Endowment two years ago, excluding one-time stimulus funding, but still below the level from 1981. The National Endowment for the Humanities, whose budget has been informally tied to the NEA’s for a few years now, saw the same cut. A reduction at the Institute for Museum and Library Services was more serious, from $282.2 million to $237.9 million – or 15.7%. Meanwhile, the US DOE’s Arts in Education program, which had been zeroed out in the temporary continuing resolution passed earlier this year due to a misconception among lawmakers that it represented an earmark, was partially reinstated at a level of $25.5 million – 36% below the original appropriation of $40 million for this year.

Other arts-and-culture-related line items were affected as follows:

• The Corporation for Public Broadcasting, which provides partial funding to both NPR and PBS, saw its budget essentially unchanged at $445 million as a result of negotiations. This was a huge loss for conservatives, who had pushed a bill defunding CPB entirely through the House of Representatives earlier this year, only to see it go nowhere in the Senate. NPR had come under attack from the right wing last year after conservative commentator and Fox News contributor Juan Williams was fired for making remarks perceived as anti-Muslim.
• The Smithsonian, another cultural institution that had drawn negative attention from Republicans as a result of a controversial exhibit at the National Portrait Gallery, also did just fine, retaining level funding at $761 million.
• On the other hand, Washington arts groups are scrambling because of a steep, seemingly mean-spirited midyear cut to the National Capital Arts and Cultural Affairs grant program. The agency’s appropriation dropped from $9.5 million to $2.5 million, a 74% drop. The NCACA money had distributed large grants to a limited number of organizations, representing nearly a fifth of some grantees’ budgets, but only two-one-hundredths of one percent of the total savings achieved by the spending bill.
• Two more federal expenditures on the arts, State Department funding for cultural exchange programs and funding for the National Gallery of Art, took modest hits of 5.5% and 7.2% respectively. The John F. Kennedy Center for the Performing Arts saw its funding remain steady.

Meanwhile, at the state level, the last couple of months have been a mixed bag. Three state arts agencies that had been at risk of elimination or drastic cuts look to be in good shape after significant local advocacy efforts on their behalf. First up, the Kansas Senate voted to override Governor Sam Brownback’s executive order to eliminate the Kansas Arts Commission last month and reinstated funding for the agency at the current year’s levels. The House’s version of the budget still zeroes out funding, however, so arts advocates still have their work cut out for them in the Sunflower State. Second, both the Washington State House and Senate have passed budgets preserving $1.1 million in funding for the Washington State Arts Commission, which Governor Christine Gregoire had proposed to cut to $250,000 and eliminate as an independent agency. Finally, both legislative houses in the Palmetto State have proposed budgets calling for essentially level funding for the South Carolina Arts Commission, in defiance of Governor Nikki Haley’s attempt to eliminate the agency.

On the other hand, pressures continue elsewhere in the country. The news is not good for the Texas Commission on the Arts, which has been taking quite a bit of heat this year. After Governor Rick Perry suggested eliminating the arts council in his State of the State address (but not in his budget), the Texas House passed a budget that zeroes out funding for the TCA. It seems the best case scenario for the TCA now is the 38% cut that was proposed in the Senate. And now two new states are on the chopping block for significant arts cuts. Governor Scott Walker, in his spare time between presiding over the most explosive labor relations battle in the country, has proposed the elimination of the Wisconsin Arts Board as a separate agency and a 68% cut for arts funding by the state. And the New Hampshire House has eliminated support for the New Hampshire State Council on the Arts entirely in the budget it has sent to the Senate in that state. The NHSCA’s state appropriation had already been cut almost in half over the past two years.

You can keep up to date with the legislative appropriations process on a state-by-state basis via the Americans for the Arts State Arts Action Network website, which also has links to the arts advocacy organizations in each state.