Odds of new ticket tax are doubtful

December 14, 2009
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LANSING — As state funding for arts and culture dwindles, a proposal to tax admission to cultural and entertainment events could generate much-needed revenue.

Rep. George Cushingberry, D-Detroit, has introduced a bill to establish a 2 percent tax on admission to entertainment events. The proceeds would go into a fund dedicated to arts, culture and history.

The legislation would apply to zoos, museums, live theaters, collegiate and professional sporting events and concerts. It would exempt elementary and secondary school events and programs, events organized by nonprofits and charities, college events and state, county and local fairs.

Kirk Profit of Governmental Consultant Services, a Lansing lobbying firm, said the goal is to have the arts fund themselves through tax revenue, something the state has done with other entities in the past.

“Years ago, the state decided to tax natural resources and with the money created the Natural Resources Trust Fund in order to preserve them,” he said. “This is similar because you would be taxing the arts to help preserve them.”

Jan Fedewa, executive director of the Michigan Humanities Council, said it’s important to create funding mechanisms for cultural arts in the state.

“Arts and culture create jobs and economic development and need to be supported,” she said. “Right now, none of the funding for the arts comes from a dedicated fund. It would be good to have a dedicated revenue stream.”

The council, the state’s affiliate of the National Endowment for the Humanities, promotes cultural arts through advocacy, fundraising and community engagement.

Fedewa said she hasn’t fully reviewed Cushingberry’s bill but is encouraged by the Legislature’s interest.

“It’s good that they are looking at ways to fund arts and culture in the state,” she said.

John Bracey, executive director of the Michigan Council for Arts and Cultural Affairs, said his organization, which provides grants to cultural institutions, is facing devastating cuts.

“We had $6.9 million for grants in 2009,” he said. “For this coming fiscal year, we’ll have about $2.2 million.”

While Bracey said he isn’t sure whether his council would receive any revenue the bill would generate, he added that arts and cultural groups need all the help they can get — although for some entertainment venues, the tax could be painful.

“It’s a double-edged sword,” he said. “You want to see these cultural institutions receive as much aid as possible, but for smaller businesses or museums, 2 percent could hurt the amount of people who would be willing to pay for admission.”

Tom Shields, president of Marketing Resource Group, said large businesses could also be hurt by the tax.

“People think that only adding a few cents to a ticket isn’t a big deal, but when you have tens of thousands of customers, it can add up to millions of dollars being taken from a company and going to the government,” he said.

Shields’ firm heads Fans Against the Ticket Tax, a coalition of Michigan sports and entertainment fans, as well as entertainment providers such as Fox Theatre in Detroit, DTE Energy Music Theatre in Clarkston and Van Andel Arena in Grand Rapids.

The bill is pending in the House Tax Policy Committee.

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