Individual contributions had already dropped because of the nation's economic crisis. And once-hefty grants from foundations and corporations had fallen off as well.
Adding to the storm of financial problems, New Jersey's arts, history, and tourism industries now face a state funding reduction of up to 25 percent in the budget proposed by Gov. Corzine this month.
Arts officials say the decrease - about $9 million, if approved by lawmakers - might close some organizations and cut operations at others.
The Rutgers-Camden Center for the Arts would lose about $78,000 in state aid, compared with fiscal 2009, likely causing it to scale back its program in city schools and consider layoffs.
In Moorestown, the Perkins Center for the Arts anticipates a potential loss of about $70,000 and would reduce services and programs.
And in Elmer, Salem County, Appel Farm Arts and Music Center would lose about $100,000. Resulting cuts may affect school programs and, possibly, salaries and staff.
"This is devastating because it's layered on top of the larger economic contraction," said Mark Packer, president of ArtPride, an arts advocacy group that represents more than 200 organizations. "The arts were already suffering with less private money available, and now we're losing 25 percent of the public support."
Packer, who is also executive director of Appel Farm, told the state Senate Budget and Appropriations Committee last week that the cut would go too deep.
It would reduce the budget of the New Jersey Council on the Arts - which provides funding across the state - to $14.4 million, down $4.8 million from fiscal 2009, budget figures show.
In addition, funding for the state Division of Travel and Tourism would drop to about $8.6 million, a decrease of $3.3 million from last year, and the New Jersey Historical Commission would receive $2.5 million, down from $3.3 million.
The state Treasury Department was unable to provide information on the proposed budget changes.
"We would have preferred not to cut funding for the arts and humanities, but we chose in this financial emergency not to close hospitals or eliminate senior prescription-drug assistance," Corzine said in his March 10 budget message.
"We didn't want to cut funding for tourism advertising and beach replenishment, but we chose to maintain safe neighborhoods, safe highways, and homeland security."
The proposed arts funding level is below the $16 million minimum mandated in a 2003 law that created a hotel-motel occupancy tax as a dedicated revenue stream for the state's theaters, music groups, dance troupes, and museums.
A "poison pill" provision in that law would eliminate the tax if arts funding fell below the minimum.
"We understand everybody has to share some of the pain," Packer said in an interview. "But we would like them to restore funding to the poison-pill level, if not higher.
"We're a $1.5 billion industry; 80,000 jobs are supported by the nonprofit arts industry. Many of them are in restaurants, hotels, shops, and galleries that spring up because of the arts and make for a vibrant community," Packer said. "State support for the arts is not a luxury."
Arts advocates are organizing teams from the state's 40 legislative districts "to tell lawmakers about the impact of the arts on businesses and communities," Packer said.
The legislators have several options. They could increase funding, reduce the $16 million minimum in the 2003 law to match the $14.4 million in proposed aid, or offer new legislation, Packer said.
Or they could take a less likely path: pass the measure as is and eliminate the occupancy tax that provides for the arts, history, and tourism as well as for municipalities.
"I've heard from people in the arts community who understand that it's a hard budget year," said Assemblyman Louis Greenwald (D., Camden), chairman of the Assembly Budget Committee. "They're concerned about how deep the cuts are, that they go below a minimum state funding they expect.
"This is a puzzle," he said. "It's a picture that we'll put together as we hear from different groups at the public hearing" this week.
The proposed cut "presents a really difficult situation," said Virginia Oberlin Steel, director of the Rutgers-Camden Center. "We're talking about losing arts organizations and seeing others, like mine, cutting back. It takes so long to build back up again."
The center already operates on a lean budget, said Steel, who plans to step up efforts to find funding from the National Endowment for the Arts and other sources. "Everybody is doing four jobs," she said. "We are really good at stretching dollars. It's laughable to me when I hear about the bonuses for AIG executives, because we're so underpaid."
If the cuts go through, "the negative effects will increase over time," said Ann Marie Miller, executive director of ArtPride. "The arts are part of the economic stimulus."
At the Perkins Center, the proposed funding leaves executive director Alan Willoughby with tough choices. "We'll have to reduce services and programs, and look at whether we can sustain staff at current levels," said Willoughby, a member of ArtPride's board of trustees.
"I'm hopeful with effective advocacy - and we are fairly organized - that the word will get out and bring the cut to the arts back up to where our fair reduction would be. This is going too far."
In Trenton, Preservation New Jersey, which provides technical assistance to groups rehabbing historic buildings, also is expecting a severe budget impact. The state provided $40,000 to the group in fiscal 2009.
"A 25 percent reduction would be a significant hit," said Ron Emrich, the nonprofit's executive director. "We would not be able to assist as many developers and homeowners."
Also affected by Corzine's budget is the Battleship New Jersey Museum and Memorial, which saw its state contribution fall to $1.5 million in fiscal 2009, down from $2.8 million in 2008. It hoped to maintain that level in fiscal 2010 but anticipates being slashed to $1.35 million. "We've been proactive in reengineering our organization, just in case such a cut might occur," said Jack Willard, spokesman for the Camden site. "But our reserves are depleted and long-term maintenance is not funded at this point."
If state aid to arts and history industries is slashed to the proposed level, "thousands of jobs will be lost," added Packer, of ArtPride. "And those workers will stop paying taxes and start applying for unemployment benefits."