As details of the $27.9 billion state spending plan became known late Friday in Harrisburg, word spread of the inclusion of the state sales tax to performing arts programs – dance, music, theater – and other cultural venues, such as museums and zoos, to generate about $100 million.
This initiative spearheaded by Republicans, who have remained steadfast in their opposition to any new taxes, calls for the creation of a special fund. The fund would get the bulk of the ticket-tax revenue, although any mention of percentage has remained ambiguous at best. This fund would be used to support cultural institutions previously subsidized by the general fund, such as museums, theaters, and zoos
While some undeclared portion of the new cultural sales tax would flow back to venues, the overall effect will be insignificant given current reductions in state support for cultural institutions. What is more likely, is that audiences now facing higher ticket prices during an already difficult economy, will simply attend less events or not at all. This overall effect will only reduce revenue even further.
Even more interesting is that this new cultural tax is not being imposed on movies or sporting events, which would generate greater revenue potential. Essentially non-profits, which have always struggled, are now at a competitive disadvantage. For the occasional attendee to cultural events or for families trying to take advantage of the educational aspects these venues have to offer, this added tax poses a real financial barrier.
What the state fails to realize is that cultural organizations generate sales not only for themselves but also for related industries such as restaurants, hotels, transportation and tourism. The overall effect of this new sales tax to performing arts will be nothing short of disastrous.