Arts Mean Business! Developing City Arts Programs Makes Dollars and Sense
By Debra Walker & Rick Galbreath

A recent study commissioned by Americans for the Arts, funded by the NEA and 91 local jurisdictions and conducted by the Georgia Institute of Technology found the nonprofit arts industry generates $134 billion in total economic activity nationally. It also generates $24.4 billion in federal state, and local government revenues annually. By comparison, federal, state, and local governments collectively spend less than $3 billion on support for the arts each year. That translates to an ROI of more than 8-to-1. That bears repeating: for every one tax dollar spent on the arts, eight are returned.

When we reduce support for the arts, we need to understand that we are not cutting frills. We are undercutting an industry that is a cornerstone of tourism and revitalization. Conversely, when we increase our support, we stimulate tax revenues, jobs, and the creative energies that underlie much of what makes America so extraordinary.

This message is equally important for the private sector to hear. The nonprofit arts, unlike most industries, leverage significant event-related spending by their audiences, with non-local audiences spending 75 percent more than their local counterparts. The arts attract visitors and extend the business day: restaurants add dinner service, garages stay open until midnight , and stores draw more customers. Nowhere is such activity more self-evident than here in San Francisco with our abundance of street fairs, festivals, parades, and yes, protests. 

What does this mean to San Francisco ? The single largest contributor of public funds to the arts in San Francisco is the Hotel Tax Fund. Instituted through the leadership of Mayor George Christopher (a Republican, we might add) and currently generating X$ of revenue, the recent budget troubles of the city have increasingly seen the Mayor and Board of Supervisors allocating a larger and larger share of the tax to the general fund and away from the arts. There is not much we can do when the tax receipts tank because tourism falls off, but adding insult to injury the Mayor and Board have taken what was originally a 60/40 split down to almost 50/50. Further, a recent court decision essentially invalidated the City’s Hotel Tax fund allocation mechanism which means that the entirety of the funds will now go to the general fund imperiling funding for promotion of fairs and parades and reducing the number of performances that theater groups and dance troupes can give.

But there is a component of support for the arts that is missing her in San Francisco . In the red hot real estate market that is San Francisco, we increasingly see artists, dance troupes, theater groups and the like leaving the city in search of affordable studios, rehearsal and performance (not to mention living) space. With every exit, we see our share of the $124 billion in economic activity dwindle. To stop this exodus, San Francisco needs to build in space for artists through redevelopment and city planning. Currently, the mid-market redevelopment plan is very generous with space for cars and a real scrooge for artists. Part of what makes a neighborhood vibrant is a reason to come visit. We’ve never seen anyone come to ooh and ahh at a street level garage.

The same problem of land use planning is true in the redevelopment planning for Hunter’s Point. Neglecting the arts imperils creation of vibrant, sustainable neighborhoods and affordable space for rehearsal, creation, performance and exhibition is an essential element in the urban landscape that must be planned for and implemented through our land use policy mechanisms.

When we hear talk about reducing support for the arts, we should ask: Who will make up for the lost economic activity? Who will attract tourists and locals to our neighborhoods? Who will vitalize our commercial areas seven nights per week? Who will provide the 8-to-1 return on investment that the arts provide to our treasuries? Who will replace the jobs that the arts support?

For starters, we call on the Mayor and the Board to restore the Hotel Tax allocations to their original 60/40 split and take action which will result in policies that include space for non-profit arts organizations, including individual artists, in our planning codes and redevelopment plans.

The expression, “the arts mean business,” is not just a slogan; it’s an economic reality that can no longer be dismissed.

Follow the progress of the Arts Task Force: http://sfgov.org/site/sfac_meeting.asp?id=30892

Debra Walker is Chair of the San Francisco Arts Task Force, an artist and land use activist. Rick Galbreath is Secretary of the Arts Task Force, a policy analyst and neighborhood activist.