Analysis: Funding arts funds state

By Jennfer Goulet

Michigan's resurgence depends on a commitment to invest in the unique assets that make it competitive. Strong partnerships, dedicated leadership and support from both public and private sectors, position the creative sector to drive spending in local economies and private investment, while attracting new businesses and talent throughout Michigan -- making it a contributing force in our state's reinvention.

Yet, despite its virtues, the sector is no stranger to slashed state budgets. It has had to overcome the systematic dwindling of state support for nearly a decade. Since 2002, state funding for arts, culture and arts education has been cut more than 91 percent to $2.56 million in fiscal 2012 -- 3.7 cents of every $10,000 spent of the discretionary budget.

The $5.4 million cut in 2009 affected the direct support to more than 14,600 jobs throughout Michigan. More than just employment, this cost is actualized in other areas as well, negatively affecting tax revenue, business attraction to the state and overall spending within our borders.

We know that arts and cultural organizations are hubs of activity, driving local economies, while offering enrichment, education and entertainment. Whether in a major city or rural town, creating the places people want to live often begins with the creative industry, including walkable communities, vibrant, cultural downtowns, green-conscious initiatives, competitive education, resource-rich landscapes and entrepreneurial innovation.

Young professionals seek places to live and work that offer a rich array of performing and visual arts amenities. Employers and their families look for locations in which local school districts have strong arts programs, which teach children the cooperation, collaboration, discipline and problem solving skills needed to become the next generation of innovators. We also know that where arts education is available, graduation rates increase significantly.

To state the argument plainly:

The arts put people to work.

Statewide, more than 24,000 arts and cultural businesses employ more than 77,000 people. Creative industries account for slightly more than 4 percent of the near 610,000 businesses located in Michigan and nearly 2 percent of the 4.4 million people employed.

The arts produce tax revenue.

Considering only income taxes paid to the state and none of the other taxes paid by arts and cultural organizations and their employees, the return on investment far outweighs the expenditure. The average nonprofit salary is estimated at around $30,000: state income tax at 4 percent. With these figures, the average nonprofit employee will pay approximately $1,200 in state taxes per year -- more than tripling the state’s investment.

The arts are a business magnet.

A strong arts sector is a vital economic asset that stimulates business activity, attracting companies that want to offer their employees and clients a creative climate and an attractive community with high amenity value. The arts have been shown to be a successful and sustainable strategy for revitalizing rural areas, inner cities and populations struggling with poverty.

The arts attract spending.

Arts audiences spend money -- more than $100 billion -- on admissions, transportation, food, lodging and souvenirs that boost local economies. Just in tourism, the business of the arts accounted for nearly 17 percent of the total dollars spent in Michigan, attracting $2.08 billion in tourist spending, more money than was spent on all of the state’s golf courses. Further, arts organizations purchase goods and services that help local merchants thrive.

The arts use state funding to energize private funding.

The Michigan Council for Arts and Cultural Affairs, which administers arts and cultural grants appropriations, requires a one-to-one match of state funds from all grant recipients. In fiscal 2011, grant recipients of the MCACA matched the state and federal investment of $2.56 million with more than $211 million from other state, local and private sources.

Knowing these facts, it only stands to reason that as Michigan focuses on growing, diversifying and thriving, the creative community should not be lost in its re-emergence.

If state government were to re-invest in the creative community, back to the 2008 levels of approximately $8 million, the state would see growth in jobs, private investment in the arts and audience participation all generating dollars to the state, which would contribute beyond the initial investment.

The arts sector is a necessary component of advancing the brainpower in Michigan. The country’s future leaders need to develop the creative solutions to continue driving our future. Vibrant arts and cultural centers are key ingredients to attracting and retaining the talent, businesses and families Michigan needs. The creative community has proven time and again that it can deliver on such a promise.

Facts matter. Trust matters. Journalism matters.

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