Summary
A state law in Missouri requires 60 percent of the non-resident artist and entertainer tax go to fund the Missouri Arts Council. But despite that, the MAC has never received the full amount pledged and still won’t in 2022. That money is siphoned off for other needs in the state.
Governor Mike Parson wants to give the arts in Missouri a significant financial boost with a suggested increase of $1.9 million to the annual budget.
That’s no small chunk of change. But, according to state law, it’s only a fraction of what should be allocated.
That $1.9 million comes from a pool of tax revenue money collected from athletes and entertainers who visit the state to perform or compete. The tax law — first passed in 1994 — was billed as a way to fund local arts, boost cultural organizations and attract creative industry, among other goals.
The law in question is under Title X, 143.83. It taxes non-resident entertainers 2 percent of their total compensation. That should be providing more than $20 million for the Missouri Arts Council’s trust fund and benefit other groups.
“We’ve been stuck at $4.8 million for about four years now,” Kyna Iman, a lobbyist for the Missouri Arts Council, said. “This $1.9 million recommendation from the governor is the first real bump that we’ve had for years. But still, it’s well shy of what the statute says.”
Why care?
Fully funding the Missouri Arts Council would give the organization more than $20 million to support arts across the state, including organizations and activities in Springfield.
That money helps local organizations like the Springfield Regional Arts Council and the Downtown Springfield Association provide art and art education funding. That includes things like operating costs for events, such as the Springfield Jazz Festival, or support for the Springfield Ballet and Springfield Symphony Orchestra.
According to the statute, the Arts and Entertainers Tax is also meant to fund the Missouri Humanities Council trust fund, Missouri Public Television Broadcasting Corporation special fund, Missouri Historic Preservation revolving fund and the Missouri state library networking fund.
This year Gov. Parson is recommending a 10 percent increase in funding from what is commonly called the A&E tax to go to those organizations. The Missouri Arts Council is set to receive 60 percent of that 10 percent increase, approximately $1.9 million.
Numbers to know
What the Missouri Arts Council should be receiving: More than $20 million
What the MAC received in the previous fiscal year: $4.8 million
Proposed increase 2022: $1.9 million
Total expected funding: $6.7 million
Funding shortfall: $13.3 million
While the governor makes that recommendation, the funding for the arts is contained in the lieutenant governor’s budget. Current Lt. Gov. Mike Kehoe could ask for the full funding but has chosen to go with Parson’s recommendation. Kehoe was questioned about this in a House hearing Feb. 7 by Rep. Peter Merideth, D-St. Louis.
“If you follow the statute, $32.5 million would go to all those entities,” Kehoe said. “As I tell you every year, our job is to take what the general assembly appropriates for us and then use it to the best of our ability.”
Merideth then asked Kehoe why he didn’t at least ask the legislature to fulfill the statute.
“I think many people from the arts community across the state asked the governor to consider an increase. This is what he thought was appropriate,” Kehoe replied. “So we’re following the governor’s recommendation. The good news is he’s recommended an increase, the bad news is it’s not as much as you’d like to see.”
That answer didn’t seem to satisfy Merideth.
“I’m very happy to see some really good increases here and there, but I’d probably like to see more in a lot of those cases,” Merideth said. “But this one is not just this year, right? It’s not just this year that this seems like a problem. It’s an ongoing problem where we have a statute, we have a tax for this specific purpose and then we raid that to send to the rest of our budget instead of what the tax is for. I would just really ask (you to) ask for it.
“At least put in front of us the request, even if the governor recommends a lower number. Put in the request for what we’re supposed to do if you’re advocating for that industry, especially this year when for the last three years, I think we can all agree, no industry has been hit harder by the pandemic than the arts. … Why not give a boost to an industry that is such a big part of our economy? Are you at least considering doing that with one-time funds this year at all?” Merideth asked.
“I’ve had individual conversations with House and Senate committee members about what the statute requires,” Kehoe replied. “And to be honest with you, I haven’t gotten the feeling that they would — as you would call — fill up the gap. I’m from the school that I appreciate what I can get, so I think we can put this to good use.”
Who’s affected?
- Arts and arts education organizations
- Chambers of commerce
- Public libraries
- Youth organizations
- Public and private schools
- Community arts organizations
- Social service organizations
- Colleges and universities
- Religious organizations
- Artists
History of the A&E tax
The A&E tax was passed back in the mid-1990s as the MAC looked for ways to sustain itself after a cable television tax failed to get support.
“We started looking around and talking to people over at (the Department of) Revenue,” Iman said. “They told us they had a really hard time collecting money from these entertainers that come into town and have these huge productions, make a ton of money and then leave. Clearly, they’re not going to drop by the Department of Revenue and say ‘I made $2 million last night, here’s my taxes.’”
John Britton, a longtime lobbyist who was working for the St. Louis Cardinals, told Iman the team had to pay an income tax in 26 other states, but Missouri wasn’t collecting anything from athletes that play games in Missouri but live elsewhere.
“That got us thinking and working with the Department of Revenue to put this non-resident professional athletes and entertainers tax together,” Iman said. “The whole goal was to create a trust fund for each one of us that would be over $100 million and we could live off the interest and get smaller appropriations when we needed them.”
But that hasn’t happened. The bill was passed and signed into law, but — according to Lt. Governor Kehoe’s website — it has never been fully funded. It’s been stuck at $4.8 million for several years now.
“(W)hen you’re doing a deal with Revenue and you have legislators coming in and out that don’t understand what deals previous legislators have cut and they see money sitting there in a fund, they quickly start siphoning off those trust funds,” Iman said. “Gov. (Mel) Carnahan really tried to give us the full amount, but things fell on hard times with Gov. (Bob) Holden and it just didn’t happen. Then Gov. (Matt) Blunt started ratcheting us back up to the full amount that we should’ve gotten. I think we were up to almost $12 million when he left office. And then in 2008 the floor fell out again and Gov. Nixon withheld those funds.”
Impact on the local arts
And those funds are important for many groups, like the Springfield Regional Arts Council.
“We use it to help us cover operating costs, so that has been helpful for us to be able to provide some of the things that organizations need that we can cost-share on and they can focus their funding on their programs and actual producing of art things,” Leslie Forrester, SRAC executive director, said. “Because we’re an Arts Council we’re able to utilize those funds to help cover printing materials and things like that to support the arts organizations.”
They also use it for much bigger things, like their annual Springfield Regional Arts Integration Conference. That event brings together educators in southwest Missouri to learn about arts integration strategies for their classrooms.
“We partner with Springfield Public Schools to host this two-day professional development conference and we bring speakers from all over the country, usually three or four speakers from the Kennedy Center for the Performing Arts, who come in and teach strategies for teaching various subjects through the arts,” Forrester said. “Things like using theater to teach history class. We’ve even used theater for classroom management, or the skill of observing details of art as a way to teach about reading comprehension, observational skills and things like that. That’s all funded through the Missouri Arts Council. There are quite a few organizations of all sizes that receive funding.”
That includes small organizations that rely fully on volunteers, Forrester said. While the money’s impact is big in the Springfield area, it’s even bigger in smaller communities.
What’s the path forward for the arts?
There is one way to guarantee full funding, Iman said, though it hasn’t been pursued yet — and won’t any time soon.
“We’ve asked for attorney general opinions on it and they have told us everything in the budget and statute is still subject to appropriation unless it’s passed by the voters of the state, like the conservation department, state parks and things like that. We’ve just never gone to a full vote of the people to ask them to approve that,” Iman said. “We really did look at that, maybe three years ago, and did some statewide polling. It looked like it polled well, because you’re taxing people that don’t live here in the state. They don’t vote on it.”
The fear, Iman said, was other organizations might condition their support on taking bigger chunks of money, leaving the arts underfunded again.
“It wasn’t so much the fear of the vote from the people as much as how it might be divvied up,” she said.
So what is the path forward for MAC and other groups who benefit from the A&E tax? More help from the legislature.
“We’ve been reaching out to legislators, and it’s always an ongoing education process because this was passed in the ‘90s,” Iman said. “Rep. (Peter) Merideth was great in the (budget) hearing the other day asking the Lt. Governor why aren’t you asking for the full amount? And the Secretary of State, Jay Ashcroft, did ask for the full 10 percent for the libraries in his budget. Even if we can’t get the full 60 percent overnight, ratcheting it up is taking us in the right direction, especially since we have more funding available to us in the budget than we’ve ever had.”
How the public can play a role
For people like Forrester, that means public help with that education and lobbying process is vital. It can be a phone call, an email or even a written letter.
“All of that is impactful because the more of us that are saying yes, we want this, the better,” Forrester said. “It’s fine for me to say it. It’s part of what I do every day and they see me all the time. But if there are other people also sharing that and they’re hearing from people, then they understand this is something that their constituents care about.”
On the flip side, silence from the public could mean a continued failure to fulfill the statute.
“I will say our local delegation has always been wonderful and certainly this year the group that we have in Jefferson City representing us has been an incredible team supporting arts and culture,” Forrester said. “Reaching out to them to continue that conversation would be really helpful in getting all this extra funding across the finish line.”
It’s a finish line advocates like Iman think is achievable, especially considering the funding doesn’t come out of the pockets of Missourians.
“I think the biggest thing is it’s a tax on our own industry. The entertainment industry is producing those dollars,” Iman said. “The onus is on the arts industry to collect those funds for the Department of Revenue. We feel like it’s only fair that we’re doing the collection, so that money should come back to help us with more programming and more arts entertainment programs.”
