Mayor Reed proposes a sales tax increase to fund the arts

Illustration by Devin Phillips | The Signal

At his final State of the City Address on Feb. 2, Atlanta Mayor Kasim Reed announced that with the support of the Georgia General Assembly, his administration will pursue a one-tenth of a penny sales tax to create funding for the arts in Atlanta.

“Organizations like the Woodruff Arts Center are thriving, but our small and medium-sized groups, our young and emerging artists, need additional support,” Reed said. “We need to give back to the creative community that gives so much to our City.”

If voters approve the one-tenth of a penny sales tax, Atlanta’s sales tax would increase to 9 percent making it among the highest in the nation behind cities like Seattle with a 9.6 percent sales tax and Chicago at 9.25 percent.

In an article with the Atlanta Business Chronicle,  Reed said the legislation is modeled after a similar arts tax that is bringing more than $50 million a year into arts organizations in Denver, Colorado.

There are three basic types of financial support for the arts, a direct public funding that come from the National Endowments for the Arts (NEA), other indirect and direct public funding, and private sector contributions that come from individuals, foundations, or corporations.

According to the NEA fact sheet, the arts generate $22.3 billion in federal, state and local revenue tax receipts.

“Simple fact, every dollar that the government spends on the arts generates $7 in tax revenue. So funding the arts is actually good business,” Georgia State performing arts lecturer Dr. Frank Miller said.

But on Feb. 21, Reed also announced a $1 million investment to the Woodruff Arts Center Transformation Campaign, home to The Alliance Theatre, the Atlanta Symphony Orchestra and the High Museum of Art. The campaign raised $110 million Nov. 2, 2016 since their announcement on April 2015 with the help from almost 700 donors.

The campaign will go towards endowment funding, capital improvements and funding for expanded family-oriented programming and greater activation of the Arts Center’s campus, which will modernize the physical spaces, ensure the programs are sustainable, and allow children and families to participate in artistic experience at no cost to them.

“We’re fortunate to have the Woodruff Arts Center which has been bringing world-class art and arts education to Atlanta for nearly 50 years as a centerpiece of our thriving arts community. Providing this support to the Arts Center is both a privilege and a responsibility, and we are pleased to have been able to contribute to this vital campaign,” Reed said in the press release.

The proposed tax, dubbed the Arts Special Purpose Location Option Sales Tax (SPLOST), will appear on the November 2017 ballot, and if approved, will take effect early 2018.

The City is still in the early stages of designing the programs to be funded through the SPLOST. In its April newsletter, The Mayor’s Office of Cultural Affairs will circulate a survey to get more feedback and ideas from the public, Reed’s spokesperson said.

“The survey asks the public to share their thoughts on what types of organizations and projects should receive priority funding, and how these funds could most effectively be deployed within the city,” a spokeswoman of the Mayor said. “Following this initial round of public feedback, we expect to develop a handful of different program designs and circulate these for additional feedback before finalizing the proposal ahead of the November election.”

During his campaign, President Donald Trump announced expanding spending on military, roads, bridges and airports, but eliminating domestic spending like the National Endowments for the Arts and the Humanities.

Professor Miller said the mayor’s move might be in response to the federal government cutting back on arts funding.

“My guess is that this SPLOTS is coming from the talks since Trump’s election that he is going to severely cut or eliminate the NEA, which if you think about it is really bad business,” Miller said.

Georgia State political science professor Dr. Robert Howard also agreed.

“The federal budget would have nothing to do with the City using a sales tax increase to fund the arts. My guess is that this is in some ways a reaction to Trump’s proposed budget- Reed is a Democrat and probably trying to demonstrate that he, and Democrats care about the arts,” Howard said.

“If they cut the NEA, the biggest thing that it is going to effect is school arts programs and school arts programs are incredibly important. School arts programs cut teen pregnancies, cut drop out rates, cut gang violence, they lead to more kids graduating from high school and going into college, because it’s stuff they can get involved in and it’s stuff they can get passionate about,” Miller said.

Most of the programs President Trump is looking to cut cost under $500 million, and a total amount of annual savings for the U.S. would be roughly $2.5 billion, a relatively small amount compared to the amount the $4 trillion the government is projected to spend this year, according to The New York Times.

Budget cuts to arts organizations that give Americans the opportunity to participate in the arts are at risk. In 1965, when Congress established the Arts Endowments, the NEA was required to appropriate funds to any state that established an arts agency. In 2016, Atlanta received $175,000 from the National Endowments for the Arts.

Reed’s spokeswoman said federal budget cuts from the arts would not affect the SPLOST.

“The Arts SPLOST is a special purpose local-option sales tax; the funds are generated entirely through the one-tenth of a penny sales tax within city limits. Mayor Reed strongly supports the NEA and is hopeful that the program will remain intact, not only for programs here in Atlanta but across the nation,” the spokesperson said.