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Committees Disagree on Art’s Economic Power

One says it can help Michigan, another is not so sure

May 19, 2006 | By Charlene Crowell
Great Lakes Bulletin News Service

Neeta Delaney

A colorful stop along the Urban Arts Leg of Jackson’s Artswalk is part of that city’s plan to combine art and urban redevelopment to accelerate a downtown revival.

LANSING—In April, bucking strong budget-cutting trends in the Legislature, a House appropriations subcommittee not only recommended approval of most of the funding increases Governor Jennifer M. Granholm proposed for two cultural programs, it also restored funding for two other such programs that the governor proposed eliminating.

But in a reversal this past Tuesday, a Senate appropriations subcommittee recommended large cuts to three of those same four programs.

Even as the two houses of the Legislature reached different decisions, the debate over public funding for the arts appeared to reveal a new political trend in Lansing: A softeing of the of hard partisan edges when it comes to jobs and economic development. Since late last year, when Ms. Granholm and Republicans reached agreement on a $1 billion package of economic development incentives, leaders of both parties have indicated what looks like an increasing ability to reach accord. In February Governor Granholm signed a significant new statute to secure Michigan’s fresh water resources from illegal diversions, a policy that built on the work of Republican Senate Majority Leader Ken Sikkema. In April, the governor and Republican leaders agreed to a jobs package that simultaneously provided public funds for building roads and strengthening rapid transit systems in Michigan.

The unanimous vote cast by the House Appropriations Subcommittee for History, Arts and Libraries (HAL) on April 18 was part of that trend. It raised the cultural portion of HAL’s budget by about $850,000, only slightly less than the increases Governor Granholm recommended. It also raised some eyebrows: The Republican-led Legislature has steadfastly insisted on deep cuts to balance the state budget and rejected raising taxes to balance the state’s chronic budget deficit. The cuts have routinely affected cultural programs that the governor, a Democrat, has said she supports.

Tuesday’s action by the Senate subcommittee, however, fit the more typical pattern. The subcommittee’s two Republican senators—Tom George and Michelle McManus—supported cutting the governor’s proposed budget for arts and cultural grants, historical societies, and aid to libraries by more than $1 million; the lone Democrat, Hansen Clarke, opposed the cuts.

Senator George, the subcommittee chair, said marching orders from his party’s leadership left him little room to maneuver.

“I don’t make these cuts gleefully,” the Kalamazoo Republican said. “But I have to pass a balanced budget. The final budget reflects a target amount that I’m given from the Senate leadership.”

The move in the Senate left many arts advocates worried that the cuts would harm their efforts to demonstrate how effective cultural development is for the state’s beleaguered economy—their key point during testimony last month.

“I can’t think of a worse time than now to cut funding to the arts,” said Neeta Delaney, who directs a large, arts-based, downtown redevelopment project in Jackson, after the Senate subcommittee vote. “For the first time, we have a state strategy to diversify and strengthen the economy by harnessing the potential of arts and culture. We need to invest in this potential now.”

State Representative Fran Amos of Waterford, who joined fellow Republican Shelly Taub of Bloomfield Hills and Democrat Marsha Cheeks of Detroit to vote for the increase in the House, said she still believes that cultural development makes good economic sense.

“I will be working very hard in conference committee to restore these cuts,” Representative Amos said. “The arts are a very important part of our economic development strategy and Michigan is in great need of every job it can create.”

A Little Goes a Long Way
Most observers agreed that the statistics and on-the-ground stories that arts advocates shared with the House subcommittee convinced its three members that investing in culture pays real dividends.

Leading the charge during the House hearings was Dr. William Anderson, director of the Michigan Department of History, Arts, and Libraries.

“More than 32,000 jobs are generated on an annual basis through the programs and organizations working with the Department of History, Arts and Libraries,” Dr. Anderson said. “Statewide, Michigan’s cultural sector generates $2 billion in economic activity and more than 108,000 jobs. With strategic investments, planning, education, and training, these measures could double in five years.”

The increases voted by the House subcommittee involved the State Film Office, state and local historical societies, several state arts and cultural programs, and state and local libraries. The film office, which was zeroed out in the governor’s budget proposal, would receive $174,700—the only increase that the Senate panel did not reverse.

The House subcommittee said historical societies, also zeroed out in the governor’s budget, should receive $100,000. Competitive arts and cultural granting programs would increase by $265,000, and aid to state and local libraries would increase by $315,000—both slightly less than the governor’s recommended increases.

Compared to the budgets of large state agencies like the billion-dollar-per-year Michigan Department of Transportation, such sums are miniscule. But arts and cultural enthusiasts repeatedly asserted during their testimony that even small increases in investment would, in fact, pay big dividends.

According to documents submitted by Dr. Anderson’s agency, a $1 million investment in rehabilitating historic buildings produces 25 new jobs, while investing the same amount in computer and data processing produces only 23 jobs, and aiming it at manufacturing auto parts and accessories produces just 17 jobs.

Doing the Math
But much of the testimony concentrated on the positive results witnesses have seen from modest investments in exhibits or artists. Some told the subcommittee that combining arts and urban revival is a powerful combination. That echoes the philosophy powering Governor Granholm’s Cool Cities Project, which directs small amounts of the administration’s discretionary funds to a wide variety of projects—including arts-based efforts—aimed at reviving struggling downtowns.

One example came from Carol Culham, director of the Michigan Council for Arts and Cultural Affairs, the state’s chief agency for funding artistic and cultural projects. She outlined what she said were the results of a three-month exhibit offered by the Kalamazoo Institute of Arts.

Ms. Culham said that the exhibit swiftly gave the local economy an effective booster shot. The exhibit, by world-renowned glass artist Dale Chihuly, brought 58,000 visitors to Kalamazoo County in less than three months late last year and, the director claimed, attracted people from all 50 states and 16 foreign nations.

Ms. Culham added that visitors spent close to $500,000 and rented 2,349 area hotel rooms. In all, she said, Kalamazoo’s local economy enjoyed a $5.2 million boost.

“In addition to the national and international recognition that this exhibit produced,” she said, “the arts—as an ever-expanding economic engine for the region—was recognized and celebrated. It truly solidified Kalamazoo as a destination for art excellence.”

Cool Cash for Jackson
Ms. Delaney, who works for the Enterprise Group, the City of Jackson’s economic development consortium, told the House subcommittee in April that meshing arts, culture, and historic preservation can spur strong economic growth in troubled urban areas.

Ms. Delaney directs the Amory Arts Project, an “arts incubator,” which breaks ground in the fall on a 19-acre site in downtown Jackson. It will transform the city’s historic 19th-century prison and a vacant industrial complex into a hub for arts and cultural activity for residents in the region. She noted that the project, which will house artists, craftspeople, and musicians in “live and work” loft rental housing and also have exhibit, performance, rehearsal and commercial space, has already qualified as a Michigan tax-free zone.

In an interview with the Great Lakes Bulletin News Service, Ms. Delaney said that earlier support from the governor’s Cool Cities Program affected the project’s direction.

“With the Cool City in Progress designation awarded Jackson for the Armory Arts Project in 2004,” Ms. Delaney said, “our community began to think seriously about cultural economic development as a major strategy in its efforts to revitalize the community and diversify and grow its economy.”

The Enterprise Group is also teaming up with the Jackson Area Manufacturers Association, the Jackson Area Career Center, and the Intermediate School District to create another, complementary center that will serve as a nexus of art, innovation, and manufacturing. That project includes an outdoor gathering and performance space, a conference center, a mix of market rate and high-end housing, as well as retail and commercial space. 

Ms. Delaney also said that the Enterprise Group is assembling a Community Cultural Plan to make sure that the project invests in ways that “maximizes their impact on Jackson’s economy and future.” She added that funding increases approved by the House subcommittee—but rejected by the Senate subcommittee—would increase the project’s economic impact by paying for marketing the project as “a major cultural tourism destination.”

Art Adds Value
Ms. Culham of the state arts council also offered some statewide numbers meant to demonstrate the power of the arts. She said that last year MCACA awarded 316 grants totaling approximately $11.9 million and that the grants leveraged an additional $295 million in support from other, non-state sources—more than 20 times the state’s actual investment—including private individuals, companies, foundations, and federal funds. Counting in-kind services, the matched totaled $332 million. 

That money, she explained, helped employ 12,462 workers in those agencies—about a third of them newly-hired workers—as well as a much larger number of artists.

“Although 12,462 individuals is a significant number of employees,” said Ms. Culham, “if you add to that number 83,389 artists employed, 64,428 of whom are Michigan artists, that employment figure becomes far more important.”

Advocates also said that, grants aside, Michigan has an artistic community that generates a great deal of commercial activity. They pointed to a 2005 report, Arts and Cultural Activities and the Michigan Economy, by the W. E. Upjohn Institute for Employment Research. It identified more than 20,000 independent artists in the state who together generate more than $300 million in commercial activity.

And figures released by the state film office indicated that the $174,000 it spent in 2005 proved to be a good investment of state funds. The office attracted $5.5 million in new film production to the state; just one film, Crossover, accounted for $3 million of that amount. The “ripple effect” from spending around that film production boosted Michigan’s economy by $1.5 billion, according to the office.

State Cultural Economic Initiative Director Betty Boone summed up the new way the arts community was making sure that the state’s cultural investments boost the state’s economy.

“The key word is ‘strategic,’” said Ms. Boone. “Strategic investments in arts and culture, and in communities that creatively utilize them as economic drivers, produces win-win scenarios for everyone who desires to live, work, or relax in our state.”

Charlene Crowell is the Michigan Land Use Institute’s state policy director. Reach her at charlene@mlui.org.

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