Public Funding for the Arts: 2009 Update

Current Funding

The three primary sources of government support for the arts in the United States are federal appropriations to the National Endowment for the Arts (NEA), legislative appropriations to the nation’s state arts agencies, and direct expenditures on the arts through county and municipal governments. In 2009 the NEA received $155.0 million, state arts agencies received $329.7 million and local expenditures were $832.3 million. Compared to the prior year, state appropriations and local expenditures experienced declines (7.1 percent and 3.3 percent, respectively) while appropriations to the NEA grew by 7.1 percent. Combined, these three public funding streams account for $1.3 billion in arts support, or about $4.27 per capita. Public sector grantmakers use these funds to support a wide array of arts activities, artistic disciplines, public participation initiatives, and institutional grants to encourage community creativity and make the arts accessible to the public.

Dollars mentioned here and in the accompanying graph do not include $50 million in special, nonrecurring funds appropriated to the NEA as a part of the American Recovery and Reinvestment Act (ARRA), commonly referred to as stimulus funds. These funds will be distributed by the NEA, states, and some localities for the purposes of short-term job preservation in nonprofit arts organizations.

Trends over Time

State funding is historically the most volatile part of the government arts funding mix, growing relatively quickly in times of economic expansion and contracting sharply during recessions. During the last two recessions, major cuts have been concentrated among a small number of states, with the majority of states experiencing more moderate reductions. Due to the structure of public financing, state arts funding typically continues to decline even after a general economic recovery begins, eventually rebounding several years later. Local government arts spending is similarly affected by the economy, although increases and decreases have been less acute than state funding.

While most state and local governments are required to maintain balanced budgets each year, the federal government is not and has often increased spending during recessions. In the past, political influence has been a relatively more powerful driver than economics in funding for the arts. Appropriations have grown steadily over the last ten years and have remained relatively stable during the last two recessions. Current NEA funding, however, still falls short of its 1992 peak.

Although the long-term growth in total public funding is a notable achievement in a competitive fiscal environment, government arts funding at all three levels has been challenged to keep pace with the costs of living and doing business. When adjusted for inflation, funding at the state and local levels fall far short of the peaks reached in 2001, and federal funding is less than half the appropriation amount of twenty-five years ago.

Outlook

As the second major economic contraction in less than a decade, this recession is causing significant distress in government budgets. Many states and localities depleted their reserves to address the recession of the early 2000s. Public managers are currently coping with decreasing revenue from all major tax sources while demand for public assistance and unemployment benefits is on the rise. To address this crunch, state and local governments were forced to enact mid-year spending cuts in 2009, and most expect continued budget gaps for the next several years. Fiscal analysts also express long-term concerns about tax structures and the inexorable escalation of health care, retirement, and education costs. Combined, these trends suggest that all discretionary public spending—arts or otherwise—will remain squeezed in the years ahead.

In this environment, public sector grantmakers and cultural advocates are emphasizing how the arts contribute to economic and community resiliency and add value to other economic recovery policy strategies. Public arts leaders are also promoting the economic, educational, and civic return on the investment in the arts of taxpayers’ dollars, emphasizing how public funding, earned income, and philanthropic support all are required to sustain vibrant and prosperous communities.

Angela Han is director of research, National Assembly of State Arts Agencies (NASAA).