Area: Allegheny County
Population: 1,281,666
Tax: Additional 1% sales tax
Revenue: Approximately $180 million
Uses: County, municipalities, stadium debt, parks, museums, arts
Local option sales taxes are incremental increases in the sales tax base that
are designated for a specific purpose. Voters often have to approve these
levies, and in some cases, re-approve the levies every ten years. The Allegheny
Regional Asset District (ARAD) was passed in the state legislature and approved
by voters in 1993. The district encompasses all of Allegheny County and includes
the Pittsburgh metropolitan area. The policy adds a 1% sales tax, in addition to
the 6% state sales tax, to taxable items within the district. The state receives
all sales tax revenue and returns the local option sales tax revenue to the
county net expenses and the county allocates 25% of funds to the general fund,
25% to individual municipalities according to an established formula, and 50% is
distributed to: civic, cultural and recreational entities, libraries, parks and
sports facilities.
In the original legislation, the "assets" were defined as having physical buildings:
for example libraries, the zoo, and sporting facilities. Pittsburgh arts organizations
(many of whom did not qualify as regional assets) struggled to promote their events
during a 1992-1993 newspaper strike and ticket sales suffered accordingly. Local arts
leaders from organizations large and small worked together to successfully lobby the
ARAD board for inclusion in funding as "cultural assets". Support from ARAD allowed
many smaller arts organizations to recover from the newspaper strike and funding
continues today. In 2004, art and cultural organizations received 9% of the $75.7
million budget for operating support and capital projects. However, as tax revenues
have shrunk in recent years and applications have increased, ARAD has been forced to
reexamine its policies.
Larger arts organizations in the district are proposing a merit based system to
determine funding amounts. The ARAD board is more interested in an agreement that
ensures all grantees are operating without a deficit and reaching a broad audience of
tax payers. ARAD relies on tax revenues generated in Allegheny County and places a
large emphasis on an arts organization's citizen reach- quantitative data based on
audience size and zip codes. Smaller arts organizations take issue with this fearing
their funding will be compromised because they serve a smaller, localized, population
in the city.
The regional asset district has given millions of dollars to arts organizations for
more than 10 years, and makes up the largest source of public money for many local arts
companies. However, as Pittsburgh's arts organizations are discovering, a slow economy
will affect even the most stable funding sources.
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