1Lawmakers are hoping to inject tens of millions of dollars in existing state revenue toward some of the economic sectors most decimated by the COVID-19 pandemic: the arts, culture and tourism.
Establishments – like museums, concert venues and performing arts centers – have had to close their doors entirely. They depend on ticket sales and large turn-outs to generate a profit, but a months long-stay-at-home order and virtual state of lockdown, followed by limits on non-essential retail and indoor dining further slammed arts, culture and tourism, have caused those profits to crater.
Granted, proposed Senate Bill 2986 would not enact any new taxes or fees, but rather attempt to undo a practice of raiding the hotel and motel tax revenue which the law earmarks for arts, culture and tourism.
That’s been a long-standing budget practice under both Democratic and Republican governors: taking money meant for specific state programs and using it to plug budget holes in the state’s finances.
“The hotel-motel occupancy fee has been around for nearly 20 years, but that dedicated revenue has not always been plowed back into the arts, historic preservation or tourism as it should have been,” one of the bill’s sponsors, Sen. Vin Gopal, D-11th District, said in a March 4 statement.
“We need to solidify support for these institutions that are so much a part of our state’s identity.”
The bill calls for at least 56.7% of revenues, or $31.9 million, would go toward the New Jersey State Council on the Arts, which provides grants to local arts organizations across the state. Another 9.6% would go towards the New Jersey Historical Commission, or at least $5.5 million.
The state Division of Travel and Tourism would get 31.9% of those funds – at least $17.6 million – while 1.8% of the funds, at least $720,000, would go toward the New Jersey Cultural Trust.
The bill has the backing of several Democratic and Republican state lawmakers, and it was approved in a 5-0 vote at a March 4 hearing for the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
Gov. Phil Murphy’s proposed $45 billion budget calls for more than doubling the funds towards arts and culture organizations “that have been uniquely harmed by the pandemic.”
Under the spending plan, funding would go up by 59%, or $20.7 million.
On average the fees levied on hotel and motel transactions net the state upward of $100 million a year. But with money siphoned off to go toward unrelated expenses, arts and culture typically received roughly $20 million each year.
New Jersey law sets minimum standards for how much of the revenue has to go toward the arts, tourism and cultural agencies, and for years the state has allocated only those minimums.
And now, industry advocates that an entire economic sector ravaged by capacity and business restrictions – and cancelled performances and activities – risks implosion without more financial support.
According to an August report by The Brookings Institute in Washington, D.C., the creative industry lost 2.7 million jobs and $150 billion in sales between April 1 and July 31 last year.
Nationwide, performing arts suffered a $42.5 billion hit in sales and shed 1.4 million jobs during that time period, according to the report.
“The impact of COVID-19 on arts, history and tourism will be felt for years to come,” AnnMarie Miller, director of public policy at the non-profit ArtPride New Jersey, told lawmakers on March 4. “This is not going away quickly.”
Performing arts centers and theaters are restricted to 25% capacity or 150 people, whichever is lower. For venues such as the New Jersey Performing Arts Center in Newark, which has a 2,868-seat theater, or the 1,850-seat State Theatre in New Brunswick, that marks a major drop in patronage and financing.
“Until they can earn enough revenue to pay the bills, all resources are being exhausted,” Miller continued.
At a December conference hosted by the New Jersey Tourism Industry Association, economist Adam Sacks from Pennsylvania-based Tourism Economics warned that visitors to the state dropped from 116.2 million who visited the state in 2019 and spent $46.4 billion, to 88 million in 2020, a drop of 24%.
“Many are facing a reality that they will be unable to survive as they continue to prepare for the 2021 season” or tourism, said Diane Wieland, who heads the Cape May County Department of Tourism, told lawmakers. “Most lost the summer reason tourism where they generated upwards of 70% of their” profits.
