Form revised May 26, 2009

 

FISCAL NOTE FOR NON-CAPITAL PROJECTS

 

Department:

Contact Person/Phone:

DOF Analyst/Phone:

Office of Arts & Cultural Affairs

Jane Morris, 684-8362

Janet Credo, 684-8687

 

Legislation Title:

AN ORDINANCE relating to the Admission Tax, increasing the portion of the set-aside of certain Admission Tax proceeds for arts purposes beginning in January 2010, and amending Section 5.40.120 of the Seattle Municipal Code.

 

·         Summary of the Legislation:

The Office of Arts and Cultural Affairs (OACA) submitted a proposal to the Department of Finance whereby all of its non-public art funding, which currently consists of a combination of General Subfund monies and Admission Tax revenues, would shift to a new model entirely funded by Admission Tax receipts. This change would increase the percentage of Admission Tax revenue from its current level of twenty percent to seventy-five percent, and eliminate General Subfund allocations entirely.  The action taken by this legislation, which is budget neutral in 2010, provides incentive for OACA to advance and strengthen cultural development in Seattle‘s Public Schools, neighborhoods, and in its artistic and creative sector workforce. 

 

·         Background:  (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

 

A portion of Admission Tax revenue was first proposed to supplement the General Fund budget appropriation for OACA in the 2000 Adopted Budget (Ordinance 120183).  This funding, which was originally approved at the twenty percent level, was subsequently suspended in response to the economic downturn of 2001 (Ordinance 120644), and later returned to its original twenty percent level, effective January 1, 2003 (Ordinance 120975).

 

Until now, OACA has received twenty percent of Admission Tax revenue, with the remainder of the OACA operating budget appropriated from the General Subfund.  The attached Bill would increase OACA’s Admission Tax allocation from twenty percent to seventy-five percent, eliminating the Office’s General Subfund support in its entirety.  Specifically, OACA will calculate its seventy-five-percent Admission Tax allocation based on data from the most recent year for which actual revenue figures are available.  OACA’s 2010 Proposed Budget, therefore, is based on year 2008 Admission Tax receipts that include adjustments to account for the loss of the Seattle SuperSonics, certain music venues exempted by ordinance, and Seattle Center Fun Forest revenues.  These adjustments will be incorporated in the 2009 revenue figure when OACA develops its 2011 budget.  Using this new methodology, OACA’s 2010 Proposed Budget (seventy-five percent of the 2008 adjusted Admission Tax receipts) is equivalent to its 2010 Endorsed (twenty percent of the 2008 Admission Tax receipts plus General Subfund support), minus approved budget cuts taken to address the current economic downturn.  Beginning in 2012, only a simple calculation of seventy-five percent of total Admission Tax receipts will be used.

 

The action taken by this Bill will provide stability for OACA’s award-winning programs and documented success in reaching diverse communities to promote cultural vitality in Seattle. This shift will help ensure that authentic community cultural development work continues in a tough economy.

 

Many cultural service agencies like OACA rely solely on a dedicated revenue stream (hotel/motel tax, property tax, sales tax, admission tax, etc.) to sustain leadership and economic stability for a sector that operates on razor thin margins. Shifting OACA’s General Fund to Admission Tax provides incentive for OACA to advance and strengthen community cultural development, the Arts Partnership Initiative with Seattle Public Schools, and the artistic and creative sector workforce. 

 

__X__ This legislation has financial implications.  

 

Summary of Changes to Revenue Generated Specifically From This Legislation:  For budget legislation that changes revenue (e.g., fees, taxes, etc.), please provide detail on each revenue-producing item that is being changed, when it was last changed, and how the item’s new overall cost compares with similar costs charged elsewhere in the region.

 

Fund Name and Number

Revenue Source

Budget Control Level

2009 Appropriations

2010 Proposed Appropriations

Arts Account (00140)

Admission Tax

VA140

 

$1,186,394

$3,735,517*

General Subfund (00100)

General Fund

VA140

$2,941,814

 

TOTAL

 

*

$4,128,208*

$3,735,517*

 

*Notes:  The $3,735,517 figure includes seventy-five percent of 2008 Admission Tax receipts, adjusted for Seattle SuperSonics, Seattle Center Fun Forest, and certain music venue revenues that will not be present in future years, as well as approved budget cuts.  This amount is equivalent to OACA’s original 2010 Endorsed Budget that included twenty percent of Admission Tax receipts plus General Subfund allocations for the  Arts Account, adjusted for 2010 budget cuts.

 

·         What is the financial cost of not implementing the legislation?  Budget neutral.

 

 

Does this legislation affect any departments besides the originating department?   No

 

What are the possible alternatives to the legislation that could achieve the same or similar objectives?  OACA could continue receiving funding from a combination of Admission Tax and General Fund revenues.

 

Is the legislation subject to public hearing requirements:   No

 

·         Other Issues (including long-term implications of the legislation):

 

·         List attachments to the fiscal note below: (Please include headers with version numbers on all attachments, as well footers with the document’s name (e.g., DOF Property Tax Fisc Att A)