Admission tax on the arts would take Tacoma
in the wrong direction
The
City of Tacoma, struggling to close a projected
$30 million shortfall in its general fund, is in the process of developing
a plan to address the gap. The resulting plan, a mixture of cuts and
revenue enhancements, includes a proposal to remove "the admissions
tax exemption for non-profits."
This proposal would
essentially impose a new tax on all tickets sold by nonprofit arts and
cultural organizations – of 5% per ticket.
Ticket sales to nonprofit
organizations are usually tax-exempt, reflecting the educational and
non-commercial nature of the non-profit’s mission. Tacoma’s
arts and cultural organizations keep their ticket prices as low as possible so
that they are accessible to people from diverse socio-economic
backgrounds. In virtually all cases,
ticket revenue only accounts for a percentage of expenses. The balance is covered by contributions,
grants and other revenue.
The tax-exemption is part of the
longstanding social contract between governments and nonprofit organizations,
which exist not to make a profit but to serve the public good. In most cases, nonprofit arts & culture
provide a service that is not or cannot be provided by either the government or
for-profit sectors.
Our arts and cultural organizations
are a key part of the continued revitalization of Tacoma.
We look back on a time when the city center was in an extremely
depressed condition. Thanks to
investments in the arts, including the Pantages Theater renovation and the
building of the museum campus, it has greatly improved. Yet even today, the amount of retail in
downtown Tacoma
– though growing steadily – is lower than in many comparably-sized cities. The museums and theaters collectively bring
thousands of people downtown, and generate critical business for restaurants,
bars, coffee houses and other shops throughout the city. We need to create an environment where more
business is generated, not less.
Ecology refers to the relationship between organisms and their
environment. The environmental ecology
can either be supportive of or detrimental to living organisms. Similarly, a city has a cultural ecology that determines whether its arts organizations
flourish or languish. As successful as Tacoma's arts appear, its
cultural ecology is still a work in progress. In the past decade, we
gained a museum and lost a professional theater company. Whether or not Tacoma will continue evolving in a direction
that promotes healthy, sustainable arts and cultural organizations remains to
be seen – and depends on the choices we make as a community along the way.
The city’s arts are already
struggling in this economy with reduced attendance and contributions. If
fewer people patronize these organizations, it will make that struggle worse,
and work against the city’s
financial interests. Businesses that cater to arts patrons – restaurants,
nightclubs, and parking garages – will feel the financial effects of reduced
patronage – and there will be less tax revenue to pass along to the city.
The admission tax on the
arts would take Tacoma
in the wrong direction. It would weaken the city's cultural ecology, and
increase the fragility of a sector that is critical to its future. It isn’t worth the price.
The issue of the City Arts Tax has been in the news recently. In case you missed it, follow the links below:
- KOMO News-4 visited the Grand Cinema and did a story here.
- The News Tribune wrote an excellent and informative editorial here.
If you would like to voice your concern, we encourage you to
contact the City of Tacoma Mayor’s
office, and/or members of the City Council.
Tacoma
residents are especially encouraged to contact the councilmember assigned to
your district. Visit the city’s website
for more information.