Public Funding for the Arts: 2011 Update

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Government grant funding for the arts in the United States originates from three primary sources: federal appropriations to the National Endowment for the Arts (NEA), legislative appropriations to the nation’s state arts agencies, and direct expenditures on the arts by county and municipal governments. Although there has been some long-term growth in these funding streams, two major economic contractions within the last ten years have caused major cutbacks across nearly all government functions, including funding for the arts.

Current Funding Levels

The federal government, states, and localities appropriated a combined $1.12 billion dollars to the arts in 2011, for a total per capita investment of $3.58. Comprising this total was:

• $154.7 million in appropriations to the NEA, a decline of almost 8 percent from 2010.
• $276 million in legislative appropriations to state and jurisdictional arts agencies, a decline of about 6 percent from 2010.
• An estimated $688.5 million in direct expenditures on the arts by county and municipal governments, a decline of around 10 percent from 2010.

Trends Over Time

Between 1992 and 2011, aggregate appropriations to the arts by federal, state, and local governments increased by 13 percent. Within this overall growth pattern, however, each funding stream has followed a unique trend line and exhibited the effects of economic downturns at different times:

• Local government funding for the arts grew by 33 percent between 1992 and 2002 and reached an all-time high of $858 million in 2008. Local funding has declined precipitously in recent years, however, dropping by $169.5 million (-20 percent) between 2008 and 2011.
• Appropriations to state arts agencies grew by 110 percent between 1992 and 2001, reaching an all-time high of $450.6 million in 2001. Between 2001 and 2011, state arts agencies lost $174.5 million (-39 percent) of their appropriated funds.
• Federal funding for the arts has been the smallest — but least volatile — part of the public funding mix over time: 1992 was the peak year for NEA funding, when the agency received a federal appropriation of $175.9 million. After declining to $100 million in 1996, NEA funds grew steadily and incrementally through 2010. Current NEA appropriations remain 12 percent below 1992 funding levels.

In addition to exhibiting recession-related reductions, public funding for the arts has not kept pace with the cost of doing business. When adjusted for inflation, total government funding for the arts has contracted by 28 percent since 1992. Congressional appropriations to the NEA declined by an inflation-adjusted 44 percent between 1992 and 2011. State funding declined by 18 percent and local funding declined by 27 percent during that same period.

Future Outlook

While the value of the portfolios held by private-sector arts funders often improves as market conditions rebound, recovery from a recession is typically a much slower process in the public sector. Government revenues, particularly for states and localities depend largely upon proceeds from taxes and fees. Due to the retroactive nature of those collections, growth in tax and fee revenues lags at least one year — and often more — behind broader economic recovery. Public pressure to reduce tax rates places additional restrictions on available revenues. County and municipal governments can experience a “delayed double whammy” of declines when property and sales tax proceeds are compromised (which was especially pronounced during the most recent recession) while cuts in state aid to localities are occurring simultaneously.

For these reasons, few government arts agencies are expecting rapid resource rebounds in the near future. Some agencies are experiencing improved conditions this year. For instance, fifteen out of fifty-six state and jurisdictional arts agencies anticipate appropriations increases for FY 2012. However, a majority of public arts agencies expect to contend with flat funding or continued cuts in the year ahead.