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CULTURAL GROUPS FEAR 6% SALES TAX; TICKET PRICES

Frank Rizzo

May 15, 2009

News of a new 6 percent sales tax on ticket prices is sending nonprofit cultural and heritage groups into emergency mode.

State legislators are considering the tariff on admission to museums, theaters and historic sites. For-profit venues, such as theme parks, winter skiing sites and venues for spectator sports, also are targeted.

"This would have a serious impact," says Kathleen Lynch Bolduc, new CEO of the Greater Hartford Arts Council, which gives grants to more than 140 arts, cultural and heritage groups in the region. Bolduc fears a domino effect: Groups would have to make up for the revenue loss "and that could have a potential impact on jobs."

Boldoc says small nonprofit groups also would have to bear administrative costs to deal with the new fees.

Nonprofit leaders say such a tax on its earned revenue at a time when its contributed income in donations and gifts is plummeting would be "devastating." If enacted, the new tax would take effect July 1, 2010.

The tax legislation was passed by the General Assembly's Finance, Revenue and Bonding Committee in April. It is likely that the final decisions will be worked out in meetings among key legislators and representatives from the governor's office, says David J. McQuade, senior government affairs consultant for the arts council.

E-mails have been zapping among nonprofit groups, asking supporters to call their state legislators to speak out against the proposal.

It is unclear how much the 6 percent proposal would raise in revenue or what the impact would be on nonprofits.

"We are trying to freeze - and even reduce - our prices for certain performances or certain sections of the house because of what's going on in the economy," says Michael Stotts, managing director of the Hartford Stage." "To tack on 6 percent could be very detrimental to a lot of organizations. The 6 percent increase is not insignificant to people on a budget."

Senate Bill 932 does have several exemptions, including one for dance lessons.

"It makes no rhyme or reason to me why such things as dancing lessons are exempt but not theater or music or art classes," says Stotts.

In other arts-related proposals for the new state budget, Gov. M. Jodi Rell calls for the state Commission on Culture and Tourism to be absorbed into the Department of Economic Development and a two-year phase-out of the line items for certain arts, cultural and tourism organizations. The appropriations committee proposal cuts by half money for grants to the commission.

"The 6 percent tax sales tax on top of these proposals would be a double whammy," says Stotts.

Calls to Sen. Gary D. Lebeau (D-East Hartford), chairman of the commerce committee, were not returned.