Another Reason To Resist The Arts Tax New Tax Is No Friend To Education, Or Kids

Posted: September 23, 2009

LEAVE IT to the geniuses of Pennsylvania Legislature to find yet a new way to rob Peter to pay Paul and pretend it's responsible lawmaking.

In this case, "Peter" is education and "Paul" is . . . education. And, the robbery is accompanied by an assault on the nonprofit model for supporting arts and culture.

To raise $100 million for the budget - and also to create a fund for the arts - the Legislature plans to impose a 6 percent sales tax on tickets to arts and cultural events (8 percent in the city.) If it does, nonprofit cultural institutions likely will have to cut back on the educational services - performances and classes - that they currently provide to children as part of their public-service mission. Out of one pocket, into another.

In Philadelphia, the city's performing-arts organizations serve almost 600,000 children with discounted tickets, says the Philadelphia Theater Alliance. Although funding from Harrisburg has supplied 73 new arts teachers for Philadelphia schools, this is not the time to start cutting from the other end.

Tickets to sporting events or movie theaters - that is, entertainment that makes a profit - would be exempt from this sales tax, which is not only unfair, but makes little sense.

The last-minute decision came as a shock to the arts-and-culture community, which heretofore thought it had to worry only about the commonwealth further slashing arts funding and, oh, yes, about the recession cutting into disposable income, reducing not only ticket sales but the charitable contributions. Those contributions make up the difference between income from the tickets and operating expenses, and are down 20 percent this year. A majority of local nonprofit cultural organizations were already operating with deficits.

Add the fact that the Legislature backed off a reasonable plan to join every other state to tax smokeless tobacco - dangerous crap that is marketed to kids - and the shortsightedness

approaches total blindness. More about that

tomorrow.

New York state decided against an 8 percent tax on tickets last spring, after performing-arts organizations pointed out that a reduction in ticket sales would cause a reduction in restaurant sales, parking, lodging - not to mention lost wages from thousands of people employed in the arts. Last year, Pittsburgh finally repealed its amusements tax on nonprofit organizations because it had seriously affected its arts-and-culture scene.

The Legislature's action represents a fundamental misunderstanding of how nonprofits are supposed to work. The reason that contributions to these organizations qualify for tax deductions is that they render a public service. Some in the arts community wonder: Can a sales tax legally be levied on a tax-exempt organization? If so, are other nonprofits also are at risk of being taxed?

Advocates for the arts could have explained this to lawmakers if they had been let in on the secret before the deal was sealed. The hundreds of thousands of Pennsylvanians who work for, or benefit from, nonprofit arts-and-cultural organizations could have at least had their voices heard, which is what we thought democracy is about.

It's late - the budget will be acted upon within the next week or so - but you still should scream.

We join with the Greater Philadelphia Cultural Alliance and urge Pennsylvanians to complain about this decision. The alliance even provides a Web site to find out who your representatives are: http://www.philaculture.org/action/legislator.

Call, fax, e-mail. This issue not only about arts, culture, and education. It's about fairness. And common sense.

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