Arts leaders rage against new state sales tax
The budget plan would hit cultural events but not movies and sports.
Hundreds of determined arts leaders attending last night's annual meeting of the Greater Philadelphia Cultural Alliance at the Annenberg Center for the Performing Arts vowed they would not go gently into that good night.
Just two days after waking to news that the proposed Pennsylvania budget agreement, announced late Friday in Harrisburg, would extend sales taxes to arts and cultural performances and venues - but not to movies or sports events - arts officials said they would blitz lawmakers in a last-ditch effort to stop the tax.
Peggy Amsterdam, head of the alliance, drew sustained applause when she framed this question for Gov. Rendell and legislative leaders: "What were you thinking?"
"Your proposal to extend the sales tax to arts and culture activities - a proposal snuck in at the last minute in a backroom deal - attempts to balance the commonwealth's $28 billion budget on the back of one of its most valuable and vulnerable industries," Amsterdam said.
"It will price everyday people out of arts experiences, and it will push key cultural institutions to the brink. Yet with as much potential for economic and social damage as this tax threatens, it yields only a paltry one-third of 1 percent impact on state revenues."
Mayor Nutter, who addressed the meeting after struggling through the city's own protracted dealings with budget makers for the past several weeks, said he was just as surprised by the proposed imposition of the arts tax as his audience was.
"I don't have all the details, and it appears that all the details are not squared away," Nutter said. "I am certainly concerned about it."
Two areas of confusion and concern seemed to dominate conversation at the meeting. The first concerned whether the tax would extend to nonprofit museums' so-called membership sales - deals that allow unlimited attendance for a one-time annual fee.
The fee, which is akin to a subscription sale by a performing-arts organization, is treated as a tax-deductible contribution to a nonprofit. Some arts officials said they had heard that these fees, too, would be taxed.
But one city official said that was unclear, since the funds are not for a specific event and are treated by the IRS as a contribution.
Another area of concern was what arts people viewed as an unfairness in the budget proposal - that it would extend the sales tax to cultural venues but not sports events and movies.
City and state officials said yesterday that applying the sales tax to pro sports teams would be difficult if not impossible, due in large part to past agreements under which the state helped finance new stadiums in Philadelphia and Pittsburgh for the Eagles, Phillies, Steelers, and Pirates.
Barry Ciccocioppo, a spokesman for Gov. Rendell, said no law prevents the state from extending its sales tax to pro sports events. But such a move, he said, would hit those two cities hard.
Here's how: When the state agreed to help finance the new stadiums, the teams agreed, in return, to guarantee millions in annual tax revenue to the state. In the Eagles' case, for example, that is $2.5 million annually.
If more taxes are collected from sports tickets via a sales tax, the financially strapped city would have to pick up the difference, Ciccocioppo said.
Meanwhile, Eagles spokeswoman Pamela Browner Crawley said yesterday that the team already charges the city's 5 percent amusement tax on its home-game tickets, which cost $85 on average, and remits the proceeds to the city. She said the team had played no part in the state's budget negotiations.
Complicating matters was the lack of publicly available information on the nuts and bolts of the budget agreement announced Friday. Aides to Rendell and legislative leaders said yesterday that many of those details still needed to be worked out.
One detail of interest to the arts world is a proposed cultural-activities fund, drawn from proceeds of the expanded ticket-tax revenue. Budget negotiators say this fund would help the museums, theaters, and zoos whose state subsidies have been slashed - but no particulars have been spelled out.
Amsterdam urged members of the cultural community to blitz legislators and inform patrons in an effort to stop the tax extension.
"So, Gov. Rendell and legislative leaders," she said, "in the next few days you will hear from us. We will clog your fax machines, e-mail, and phones."