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A new set of guidelines for state grants has cultural organizations wondering — and worried that they are the targets of a new kind of welfare reform. 

For Art's Sake?

Confusion and concern has arisen among local arts and cultural groups over the Gilmore administration's new criteria for awarding grants.

The criteria are outlined in a Sept. 1 memo to funded groups and state legislators from Secretary of Finance Ron Tillett, but neither he nor administration spokesmen returned calls from Style seeking comment by press time. The potentially controversial new guidelines, the memo states, seek to limit the growing number and amount of grants awarded, and to keep organizations from becoming dependent on them.

That makes a certain kind of sense. According to information from the state department of planning and budget, grants to nonstate agencies ballooned from $7.2 million in fiscal 1997 to $28.9 million in fiscal 1999 and are budgeted at $33.7 million for fiscal 2000, which began July 1.

But the grants cover everything from regional arts centers and playhouses to science museums and historic facilities. They get tacked onto the end of the state budget and they far outweigh what Virginia spends on arts and culture through its official funding arm, the Virginia Commission for the Arts.

The VCA will make $4.3 million in grants this fiscal year. That is the amount that gets compared to spending in other states. It doesn't rank well: Virginia's arts spending via the VCA is ranked 40th among the 50 states and 46th out of 56 when the District of Columbia and offshore U.S. territories are included.

And while Virginia spends much more through the nonstate agency budget category than through the VCA, so do other states, notes VCA Executive Director Peggy Baggett. The VCA is not affected by the new criteria but Baggett says it will discuss changing its own guidelines at a commission board meeting Sept. 28 in Roanoke.

The amount of money involved and the importance of such projects to individual legislators virtually ensure there will be a squall in the General Assembly over the new criteria. (The governor budgets nonstate agency grants, but legislators can make changes to the list, which then can be vetoed by the governor, and which then can be overridden. Usually the governor wins.)

Arts groups say the potential funding cut is compounded by the timing of the change: Tillett's memo says the new criteria will be used by the governor in developing the 2000 budget bill to be introduced in December. Groups say that gives them little time to make adjustments and cover any newfound funding shortfalls.

The criteria themselves, however, are the chief source of angst. For instance, Gilmore now "will recommend grants only to organizations for purposes clearly identifiable as those of a cultural or artistic nature." That could mean he plans to preserve funds for arts groups instead of other types of nonstate agencies, such as science and history museums, or it could mean some arguably "cultural or artistic" groups will be considered eligible and others will not.

"Is our children's museum cultural? I guess," says Del. Panny Rhodes. "I'm assuming that 'culture' is all-inclusive." The Children's Museum of Richmond, the most highly funded Richmond-area group on the nonstate agencies list, is pegged to receive more than $1 million this fiscal year.

Even those unequivocally artsy groups are concerned. "When I read that I went, 'Oh, boy. Here we go,'" says Kim Tetlow, director of institutional development at Theatre IV in Richmond. "I'm all for having good procedures ... but it's always kind of scary when they start talking like that."

Another new criterion is that "the nonstate agency must be open to the public or otherwise engaged in activity of public interest," equally subject to interpretation in the absence of explanation.

What has groups most anxious, however, is the new requirement that will cut off operating support funds after two years, presumably to prevent the groups from forming a welfare-type dependency on the state.

That criterion, Tillett's memo says, will not go into effect until fiscal 2003 — after Gilmore has left office. But aside from a rumble with legislators (who would need what looks to be a politically impractical two-thirds majority to defy him), there is nothing to prevent the governor from implementing it this year.

Some groups have gotten the operating supplements for decades and say such a cut will damage programming. Theatre IV, for example, stands to lose about 10 percent of its $800,000 donations base, Tetlow says, and others much higher proportions. Insiders add that, because money is fungible, they could simply shift funds that would have been earmarked for individual projects and capital outlays into operations, then ask the state for grants to cover the approved types of expenses. But unless the groups are willing and able to pull the wool over the governor's and General Assembly's eyes, it's back to cutting programs and spending more time fundraising.

That's something that troubles Rhodes, a long-time arts supporter and a Republican who has not been closely identified with the Gilmore administration. "I think we probably need to take a good, hard look at the process," she says. "As there always is, I'm certain there will be some compromises."

One of them, however, will not be the two-year cut-off: "The budget is a two-year document and you can't bind a future legislature unless you put it in the [state] code." A similarly minded successor may keep Gilmore's cut-off, she explains, but it's a matter of executive privilege and then legislative give and take.

Others also are comforted by recalling Gov. George Allen's proposed arts and museum cuts, which after a firestorm of protest morphed into a policy of record funding. And in an era of surplus, Democrats see arts and cultural group funding as an issue on their side in the November elections.

There are no doubt rational and even compelling arguments to be made in favor of criteria that bring more order to the process — hearings for the scores of individual groups seeking grants has become a time-wasting nightmare, legislators say — and even result in a net decline in arts funding. But no one from the administration appears willing to make those arguments.

Show Me the Funding

Richmond-area arts and cultural institutions receiving the most nonstate agency grants in fiscal 2000:

$1,075,000 Children's Museum of Richmond
$1,000,000 Association for the Preservation of Virginia Antiquities
$600,000 Maymont Foundation
$350,000 Virginia Historical Society
$316,000 Council for America's First Freedom
$150,000 Valentine
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