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Arts and Culture Public Officials Breakfast 2015

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The Game’s Not Over Until The Last Out

Every time a batter steps up to the plate and the pitcher throws the baseball, right up to the very last out of the final inning, there’s a chance the game’s outcome will change. 

And every time someone in the General Assembly introduces a bill, there’s a chance it will change, too.  That can be good or disappointing, depending on perspectives and circumstances. The most important thing is remembering that nothing is final until the last vote.  

That’s especially important now, as we watch the course of Ohio’s biennial budget. 

When Governor Kasich first introduced it earlier this year, it included his new ideas designed to benefit the economy.  Governor Kasich’s intentions to reform Ohio’s tax policy should be appreciated.  After all, much like our economy overall, whodoesn’twant to fix Ohio’s outdated, complicated and often inequitable taxation system?    

However, not every idea is as helpful as its intentions. Contained within Gov. Kasich’s 2014-2015 Executive Proposed Budget was a concept to lower state income and sales taxes, and offset the lost revenue by applying a new, lower 5% sales tax to a much broader array of services. The wide-ranging array of services that had not been subject to sales taxes now included admissions to arts and culture events.  Fortunately the House version of the Budget removed this provision.        

Many people voiced objections about the sales tax idea, and that’s to be expected from a new and far-reaching plan. But while recognizing the larger problems this plan tried to remedy, we must be mindful of the devastating impact it would have had on our sector. 

  • The sales tax plan would have added a 5% service charge to all admissions and tickets.  It made no exceptions for events put on by nonprofit organizations, such as our arts and culture organizations. If for nothing else non-profits should be exempted from this tax by virtue of their 501(c) 3 status.
  • An added sales tax on tickets would discourage or prohibit many individuals and families from attending arts and culture events and educational programs. We need to encourage attendance and engagement because of the personal and practical values these organizations and groups provide.
  • The pain wouldn’t be limited to nonprofit arts groups.  In some places like Cleveland, the combination of the municipal admissions tax and the proposed state sales tax on admissions would create a new tax of 9%-13% per ticket for the for music clubs and theatre venues

We know that Ohio’s arts and culture industry is essential as a producer of jobs, economic activity, tourism and community pride. We also know that many arts and culture organizations barely survived the recent economic crisis, and the sector is beginning to get back on its feet.  The burden of this tax increase on these crucial businesses would harm a segment of our fragile economy that we need as a primary partner in Ohio’s workforce and financial recovery.      

While the Ohio House removed this detrimental expansion of the sales tax, we need to remember the game is not over. Budget deliberations continue and we must be mindful of any effort to resurrect the expansion of the sales tax to arts and culture, especially those that are non-profits.       

Thank the Ohio House for their efforts to remove the sales tax expansion but also reach out to the Ohio Senate (State House of Representatives and State Senate) to make sure it is not added back into the Budget Bill. The time is now to let our leaders know what the real impact of this measure will be. 

Categories: Economy, public policy, state, tax

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