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

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 http://www.youtube.com/watch?v=CJ90-qfW94E]

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.