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Taxes: I don’t Think It Means What You Think It Means

04.21.12 | 7 Comments


CATEGORIES advocacy, non-profit theatre

I get it. Taxes are a necessary part of civic life. But what some of our civic officials don’t seem to always get is that taxes don’t always guarantee the revenue they’re hoping to make.

Where is all this coming from?

Well, as of Friday afternoon an urgent call went out to California theatre artists.

URGENT: Sales tax to be imposed on theatre ticket sales MONDAY!

California Arts Advocates has just learned that a bill is going before the California legislature on Monday that will impose a sales tax on tickets to live theatre productions.

This bill does not include a sales tax on any other forms of entertainment, including opera, concerts or sporting events. (emphasis mine)

That’s right. A sales tax on theatre tickets.

A Civic Parable

Let me tell you a story about Oakland. Interestingly I heard this story while I was in Texas listening to NPR (I don’t listen to the radio unless I’m in a car and living in San Francisco has meant existing sans car so…). The story goes something like this: Oakland officials wanted to increase their revenue and saw that people were coming to downtown Oakland for evening dinner, shopping, etc. And since parking meters stop charging after 6pm the officials thought they’d extend that time a few more hours.

The math makes sense. More time charging for parking equals more money coming in, right?

Wrong.

Here’s the thing. People aren’t pure math. They adjust. Especially when it comes to their pocketbook.

So what happened? People didn’t want to pay for parking in the evening. Fewer people visited downtown Oakland for evening dinner, shopping, etc. The city didn’t see the increased revenue they hoped for and the local businesses…well, they saw their business drop 30% due to the new parking meter hours.

So there you have it. Math in the real world doesn’t always add up. And in the end the parking meter debacle harmed local businesses.

I think of this story whenever I hear about the toll on the Golden Gate Bridge going up. Yes, people have to cross it to go to work, etc. But guess what. They adjust. They carpool. They take the bus. They get a job that doesn’t require commuting over the bridge.

Increasing tolls or taxes won’t always lead to the results you think it will.

California Assembly Bill 2540

Now we come to California Assembly Member Mike Gatto who’s introduced a bill that would tax theatre tickets. The Committee for Revenue and Taxation will be voting on said bill this Monday April 23rd.

I wonder if Assembly Member Gatto actually understands the potential impact a sales tax on theatre tickets would have. How it would impact jobs, the economy, opportunities for youth and communities.

So, let’s try and spell it out a bit. And you’ll have to forgive me, I’m going to be speaking in generalizations as I’m writing this blog post on a super quick turn around (Friday night) and the voting takes place Monday. Meaning, I will try to update this post later with stats and links to back up what I’m about to claim. (Help is welcome.)

Art Jobs are Jobs. Theatres employ full-time employees, part-time employees and contract employees. These individuals include playwrights, actors, directors, scenic designers, lighting designers, sound designers, stage managers, administrators and many more. These are the jobs that are at risk. Because if a theatre sees a drop in attendance (remember, their patrons will adjust to the sales tax and that may mean they go to fewer plays), then how will these nonprofits deal with the loss in income? Will they have to lay off employees? Will they produce fewer plays which mean fewer jobs for all those artists who are hired for a production?

Theatres are Nonprofits. If you’ve gone to see a play recently you’ve probably heard an actor at the end of the performance remind the audience that even if they sell every seat in the house, it doesn’t cover the cost of the production. Theatres rely on grants and individual donations (neither of which are guaranteed) to cover the remaining balance. So how will a sales tax affect these organizations? Will they have to increase ticket prices and run the risk of alienating their audience? Will they be forced to offer fewer discount tickets to groups like Up Next—a Bay Area teen-led organization that negotiates Rush ticket prices for teens? Will they have to abandon new play initiatives that support playwrights?

We Are Being Heard, But Is It Enough?

The good news is that thanks to theatre artists and theatre supporters who quickly contacted the Committee for Revenue and Taxation, Assembly Member Gatto’s staff has assured the California Advocates for the arts that “they will work to amend AB 2540 to exclude non-profits.”

But is this enough?

Here’s where my own expertise is lacking (and again, anyone with more knowledge is welcome to chime in down in the comments). But I wonder, are all the theatres I know, say here in the Bay Area, nonprofits? Do all of them have 501 (c) 3 status? I’m thinking specifically about the new indie theatres created by young up-and-coming theatre artists. What will happen to these theatres? And in my experience these indie theatre are the ones who are doing a lot more new work, providing new theatre artists (actors, playwrights directors and designers) their first breaks and opportunities.

Theatre Artists of California Unite

To ensure that the Committee for Revenue and Taxation amends AB2540 to exclude nonprofit theatre it’s imperative that California theatre artists and theatre supporters continue to voice their opposition to a theatre ticket sales tax.

How can you do that?

  1. Connect to resources. I recommend checking out this blog post written by Cindy Marie Jenkins. Not only does she provide links to contact information for the entire Committee for Revenue and Taxation, she even has a sample language for an email which you can personalize and send to Assembly Member Mike Gatto and the rest of the committee. Or checkout the form Arts for LA has put together which ensures your messages reaches the appropriate Assembly Member.
  2. Contact Assembly Member Mike Gatto and the Committee for Revenue and Taxation. Call them. Send them an email. Let them know that a theatre ticket sales tax would harm theatres and the many people whose livelihood is connected to theatre.
  3. Spread the word. Use your social network to get more people to come out in opposition to a theatre ticket sales tax. Tweet about it. Mention it on Facebook.

Of course we should all see this as a wake up call of sorts. We should recognize that it’s important to nurture an on-going conversation with our representatives about the value of the arts—whether in regards to the jobs the arts supports in our economy or the overall benefit to the communities we work in.

And for a good example of communicating the value of the arts, check out this video produced by the Teen Council of Berkeley Repertory Theatre’s School of Theatre.

YouTube Preview Image

So join me and many other California theatre artists out there who are speaking up for theatre. And remember that this isn’t just a one-off call to action, we all need to develop ways to nurture an on-going dialogue with policymakers both at a local, state and national levels.

 

Marisela Treviño Orta

Playwright and poet Marisela Treviño Orta has an M.F.A. in Writing from the University of San Francisco.Marisela’s plays include: American Triage (commissioned by Marin Theatre Company, 2007 MTC Nu Werkz new play reading series, 2008 MTC workshop production, 2011 East LA Rep reading series); Heart Shaped Nebula (2011 Playwrights Foundation Resident Playwrights Showcase, 2011 Impact Theatre reading series, 2012 O’Neill National Playwrights Conference Semi-Finalist), and Woman on Fire (2006 Primer Pasos: Un Festival de Latino Plays, 2007 full-length commission by the Latino Playwrights Initiative, 2007 Bay Area Playwrights Festival BASH, 2008 Playwrights Foundation’s Rough reading series, 2012 Teatro Luna Lunadas reading series).

Marisela is a Resident Artist in AlterTheater’s inaugural AlterLab, co-founder of the Bay Area Playwrights Pub Night, a frequent Theatre Bay Area guest blogger and TheatreFace.com featured blogger. She is an alumna of the Playwrights Foundation’s Resident Playwright Initiative and is a former member of Playground’s writers pool. Currently Marisela is working on two new plays: Wolf at the Door and The River Bride.

Marisela is also one of the founding editors of Switchback, the official literary journal of the University of San Francisco’s MFA in Writing program. Her poetry has appeared in BorderSenses, Double Room, 26: A Journal of Poetry and Poetics and Traverse. Marisela also writes a literary blog: Variations on a Theme.
  • Cindymariejenkins

    Thank you so much for breaking it down so well, and I’m honored you suggested my blog post. The sample language is from the original action alert I received, and I just want to properly credit the wonderful people who make advocacy a little easier for everyone: California Advocates for the Arts & Arts For LA.

    I also am worried about for profit companies. Not all young artists want to run a theater company, and often shouldn’t if they’re producing to build their work and ultimate goal is to work elsewhere. It is an investment but not the end goal. Add this expense, and the accounting alone becomes an obstacle to brave new work.

    Never mind how arbitrary the whole list of taxed items seems.

    Thanks again for spreading the word!
    CMJ

  • Guest

    The administrative burden on small, mostly volunteer theater companies of having to track and pay a sales tax is daunting. Small theaters are dreadfully underfunded and understaffed. Who is going to learn how to do this??? And what volunteer is going to be willing to implement this on a continual, dependable basis? Most of the tax-related stuff our small non-profit has to deal with only comes around once a year. A tax that is collected nightly and has to be paid to the state (or city?) is going to require a lot more administrative complexity than we are currently set up to deal with.

  • http://www.davidjloehr.com/ David J. Loehr

    Of course, an exception for non-profit theatres means this will hurt companies that aren’t large enough or established enough to file for non-profit status.  In a lot of cases, those are the theatres with the most affordable ticket prices, often attracting audiences that can’t afford or aren’t interested in what the larger theatres have to offer.  

    In the end, such a tax would stick it to those patrons, assuming they continue to come to the theatre; if they stop coming, that’s going to hurt the theatre companies.  And with an exemption for non-profit theatres–which is likely the majority of theatres in the state–then what’s the point?

    Surely a ten cent fee on top of a sports event ticket would raise exponentially more revenue than a tax aimed solely at theatre patrons.  

  • Phil Hopkins

    The Pasadena Musical Theatre Program has a CHANGE.ORG petition underway at:
    http://www.change.org/petitions/the-ca-state-house-stop-ab-2540-from-adding-state-sales-tax-to-live-theatre-tickets#

    Consider lending your voice to it! Thanks.

  • http://twitter.com/MariselaTOrta MariselaTreviñoOrta

    Very good points on how a tax would hurt our small indie theaters (who wouldn’t be exempt since many don’t have nonprofit status). These theatres are part of our entire theatre ecosystem and hurting them hurts all of us. We all need affordable tickets to draw in new audiences that will become life-long theatergoers and opportunities for new theatre artists to first debut their talents. And its those small indie theatres that provide some of the lowest ticket prices and also feature new artists.

  • Randy

    I don’t get it…  You folks live in California!  You KNOW that California has the highest taxes in the country (with the possible exception of Massachusetts), and yet you complain about ever-increasing taxation?  You keep voting in liberal politicians whose prime objective is to take money from those who have it (like theatre patrons) and give it to people who want it: “From each according to his ability; to each according to his need.” (That’s the first principle of Karl Marx’s Communist Manifesto, in case you don’t recognize it.) YOU folks vote in these people, and now you’re upset that they’re doing exactly what you KNEW they’d do? I don’t get it…  If you don’t want ever-increasing taxation, move out of California.  And while you’re at it, stop voting for liberals!

  • http://www.davidjloehr.com/ David J. Loehr

    Thanks to this post and others like it, Assemblyman Gatto has withdrawn the bill.


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