Wednesday, February 16, 2011

Cutting off Our Noses to Kill the Golden-Egg-Laying Goose

The President’s 2012 budget axe fell earlier this week and the results weren’t pretty. He recommended a nearly 13% cut to both the National Endowments for the Arts (NEA) and Humanities (NEH) and one would be hard-pressed to find a better way to describe this recommendation than the title of this post.

First, even here in Vermont, it is generally acknowledged that Vermont's investment in the Arts is so small that were it to be reduced to zero, there would be a negligible reduction in expense side of the State’s ledger. But, oh my, what such a step would mean on the income side!

At the Federal level, this impact is even more negligible.  Of the US's current $3.8 Trillion(!) budget, the NEA’s appropriation of $167.5 million represents just under 44/10,000ths of one percent.  That’s right: .0000438 of the total $3,819,000,000,000. The cut proposed by the President would reduce that figure to 39/10,000ths of a percent. As a manager, I consider a figure that much less than one percent to not even rise to the level of a rounding error.

To help people visualize what this means by comparison, I offer the following:

If the Federal Budget represented the total mileage between, say, Montpelier and Bennington (a distance of 121 miles), the distance one could travel on just the NEA’s portion of that “budget” would be slightly less than 25 feet.

If the Federal  Budget represented the 542 miles from my office at 136 State Street in Montpelier to the US Capitol Building on the National Mall (542 miles, according to Mapquest), the distance I could travel on the NEA’s portion of that “budget” would be 111.5 feet—or about halfway from our front door to the corner of State Street and Bailey Avenue.

For those of you who like temporal comparisons here are two that will make you sit up and take note:

If the Federal Budget represented the 18 hours, 20 minutes you might spend watching all the films directed by James Cameron in one sitting, including “Piranha II”, (and who among us wouldn't want that?), the amount of time you would have to suffer due to the “NEA’s Portion” of that experience would be 2.6 seconds.  That’s barely enough time to take a swig of your medium Sierra Mist, no ice!

If the Federal Budget represented an eight-hour school day, and the NEA’s portion was devoted to Art Class?  Hang on to your seats, people, you only have 1.1 seconds to paint, act, dance, or tickle (the ivories).

Saving 12.8% of nothing will result in saving...umm...nothing!

Doug Hoffer’s report (discussed at length in an earlier post), on the other hand reveals that, with very little marketing and promotional support from State agencies, the nonprofit arts sector (arts organizations and individual artists) provide nearly $19.5 million to State and local government coffers.  State and local investment in the arts here in Vermont is generously estimated to be $2.5 million.  That’s an “ROI” each year of 775%.

So, for the sake of argument, I asked: what if the expected ROI for the US was the equal to the ROI for Vermont? Or, phrased more clearly, what is 775% of $167.5 million? 

(Drum roll please) 

$1.298 billion...or about 6/10ths of one percent of total US receipts for 2011.  By my figuring, if the President reduces the NEA’s budget to $146.3 million, it will lower receipts to $1.133 billion (146.3 x 775%).  That’s a difference of $165 million dollars $1.298-$1.133).  So cutting about $23 million from the NEA’s budget will reduce US revenues by an amount equivalent to the total current cost of funding the NEA!

The concept that the President has not yet figured out is that the NEA and its sister agencies more than pay for themselves every year in tax receipts paid by people whose jobs depend on a healthy arts and humanities infrastructure.  No, I’m not just talking about artists, administrators, lecturers, teachers, and the like…I’m also talking about the restaurateurs, the owners of B&Bs and hotels, wedding industry professionals, and anyone else whose jobs depend on quality of life, integrity/authenticity of experience, quality of education and workforce preparation. 

It seems to me the President should increase these budgets, not decrease them.  More importantly, if the Republicans in the House who are insisting on even more draconian cuts are really serious about job growth and income generation, they might want to rethink their absurd strategy of cutting the NEA even more than the President.

You hear it here often…the arts exist on the income side of the public ledger, not the expense side.  A thriving arts sector will always generate a lot more money for governments than it will spend.  From our largest cities to our smallest villages this has proven true again and again and again.  So I would suggest that if your representative is only paying attention to the expense side of the Federal budget, (s)he's doing only half his/er job. And if he or she is one of the ones who wants to eliminate the NEA, an agency that has proven, year in and year out to lay golden egg after golden egg...well!..

...there's gotta be a face-spiting, bathwater-throwing, mixed metaphor in there somewhere.

Please, will someone tell the President and the House of Representatives?


Anonymous said...

Well said as always Alex. The other ones that get me on the budget hyperbole are the decreases for the NSF (you know where much of our future young brainpower comes from). Anyone read "The World Is Flat." by Freeman?!? While the other countries racing to the top around the planet are actually increasing their education, science and arts funding for more jobs and cash flow, we continue to dump huge amounts into Defense (the Pentagon actually sponsors several Nascar teams to advertise military recruiting to the tune of tens of millions) and the usual Republican hyperbole drones on to try Reaganesque failures once again. I don't understand how the man we all elected because of "Hope" can't see the forest for the trees. Maybe he should come to VT and look, unlike his predecessor who got us into this mess.

Becky said...

Very persuasive arguments based on real data. However, these cuts aren't about data or reality, they are about politics and it's just good politics for conservatives to cut programs that they perceive as being supported by progressives. They will always argue the "market" will step in to keep the arts worth paying for going and the market is all that matters, right?

Anonymous said...

Very persuasive argument based on real data. However, the proposed cuts aren't based on data or reality, they are all about politics. Conservatives love to target the NEA, NEH, PBS etc because they give cheap thrills to tax adverse or other agenda controlling constituencies that label them as "liberal" special interests. I think the President's cut is based on his politically calculated move to the center.He supports the arts enough to still be the best choice among bad choices. There also are a lot of people out there who appreciate what the arts do, but think the market is the only way they should be allowed to operate...very Darwinian, served with the sauce of hypocrisy since they have no problem subsidizing profitable oil companies. Thanks for staying in the fray and fighting the good fight. Good luck.

Anonymous said...

very good, thanks, alex