Support for the Arts: The Tax You Can Get

The effort to get additional public money to support the arts in Cuyahoga County is a lesson in taking what you can get. That’s been true from the beginning, but the current push to extend the cigarette tax beyond just cigarettes makes the point all over again. Counties seeking authority to tax for a specific purpose have to get permission from the State Legislature. That means working the political system in a state that leans red and rural. On top of that, taxation is a territorial business, with competing interests vying for their slice of the pie.

Arts leaders in Cuyahoga County are seeking to bolster public revenue because the stream that voters first approved in 2006 has fallen by nearly half. The cigarette tax brought in $20 million when it was new, but just $12 million last year. So while arts activity in Cuyahoga County has surged in the last 14 years, and while the the number of organizations seeking support has grown, the amount of money available has steadily declined.

Because we have been taxing cigarettes, this is considered successful. People in Cuyahoga County are buying fewer cigarettes.

In November, Fred Bidwell spoke about a strategy to rebuild the revenue stream. Bidwell leads the Arts and Culture Action Committee, a political action committee focused specifically on public funding for the arts in Cuyahoga County. His hope then was that permission for counties to levy a revised tobacco and tobacco products tax could be part of a “Christmas tree” omnibus bill before the end of the year.

Apparently the Ohio legislature was preoccupied with other things. It didn’t get done.

The idea being proposed is an 8 percent tax on all forms of tobacco: not only cigarettes, but also cigars, pipe tobacco, chewing tobacco, snuff, and “vape” products. The tax would be applied as a percent of sales, not a per-unit tax, which would help to shelter the resulting revenue stream from changes in the market.

Additionally, the new legislation would not only permit Cuyahoga County to ask the voters for such a tax, but would allow any Ohio county with a population above 200,000 people to do so. As of 2020, there were 14 meeting that criteria. Update: four of the 14 counties –Cuyahoga, Lake, Summit, and Lorain–are in Northeast Ohio, which underscores both the concentration of the state’s population here, and also the strength of the region’s art sector. Apparently about 5 counties (including Summit and Cuhahoga) are interested in the prospect and would have the infrastructure to pursue it.

Bidwell currently hopes the “permissive legislation” will be part of the standard budget bill, which by law has to be done by June 30. He hopes that can happen faster, because that would allow more time for a public campaign before a vote in November.

If it is not part of the budget bill, there are other options: permission for counties to ask voters to approve the tax could be introduced as stand-alone legislation, or it could be attached to a different bill.

However it happens, there’s plenty of time: The existing cigarette tax does not expire until 2027.

Further, if the revised tax did go to the voters and fail, the existing tax would not go away until that sunset date.

Bidwell says polling looks good: Most voters in Cuyahoga County would see a revised tobacco tax as a renewal, rather than a new tax. And last time a tax for the arts came up here, it passed with 75 percent in favor.

The PAC, led by Bidwell, is working with Michael Caputo, a lobbyist with Capitol Partners, on the legislation, with Arts Cleveland and Cuyahoga County Arts and Culture as part of the alliance. Ohio Citizens for the Arts, led by Angela Meleca, is working with regional arts councils to mobilize arts leaders in other parts of the state, who could also lobby their elected officials. Because they are dealing with the Ohio Legislature, winning support in other parts of the state is critical.

Arts leaders from the region will meet virtually with Bidwell and other partners in the alliance to discuss moving forward and organizing lobbying efforts.

Tobacco Again?

During a prior video meeting with regional arts leaders, one participant asked if leaders in the push to boost revenue for the arts had given any consideration to a marijuana tax. Bidwell’s answer was fairly simple: Ohio has not yet legalized recreational use of marijuana: only medical use. And medical products can’t be taxed.

He added that when marijuana does become legal for recreational use, multiple sectors–from health to tourism, from parks to the arts–will want a piece of it.

That points to another question, though: Why tobacco, again?

There are two problems with taxing tobacco: first, it is a regressive tax, which – when it “works,” causes revenue to decline. That is what led to the need to revise the tax.

More consequentially, though, a tax on tobacco more significantly impacts poor people and people of color, because statistically those people are more likely to smoke and use tobacco products.

On the bright side, that very disparity—that poor people and People of Color are more likely to use tobacco—was a potent argument (as if any should be necessary) to drive greater equity in the administration of public funding for the arts in Cuyahoga County, especially the revenue allocated to individual artists.

Still, it puts the burden of supporting the arts substantially on people who can least afford it.

“It is certainly true that cigarette consumption skews toward people of color,” Bidwell said. “By expanding to other forms of tobacco, it takes a step toward making it less regressive. A broader swath of society uses tobacco in forms other than cigarettes.”

So in that sense, the revised tax will be an improvement.

The Arts and Culture Action Committee did consider other prospective taxes and in 2019 did some polling to see what might work.

What about beer and wine, for example? The association between art receptions and wine might make this an obvious connection. As Bidwell notes, there is a “sin tax” that supports repair and renovation on the stadiums, which are likely to seek renewal or expansion soon. “That is a real political lightening rod that we really have been counseled strongly to avoid,” he said.

Additionally, the lobby has begun to work with independent music venues, and of course their business depends on alcohol sales.

Bidwell says the idea of a dine-in meal tax is one of the possibilities considered. “Think of it: you go out to a show and have a nice dinner. Dining out and cultural activities are very symbiotic. And that is very progressive. If you go to the Marble Room, if you can afford to go there, you are going to pay more. That is really good to me. But in the current environment that would be the definition of a stupid idea, because the dine in industry is really on the ropes.”

He continued: “In an ideal world you’d say a real estate tax is the way to go, because you go to where the capital is. You get people with the most capital paying the most tax. But politically, the voters gave us a resounding ‘NO’ when we polled them on this. It was the least popular approach. … What I believe is most fair would not get us through an election. To some extent you have to go with the tax you can get.”

The opinions expressed on CAN Blog are those of the individual writers. Art is somewhat subjective. Well, somewhat. But yes, everybody's a critic.

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