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May 29, 2020

Preparing for a Sharp Drop in Available Arts Funding, the City of Austin Adjusts Protocols

Economist predicts 250,000 people in Austin could be without jobs within the next couple months. One arts funding program has been suspended

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Facing a certain sharp drop in available funding, the city of Austin’s Cultural Arts Division (CAD), has announced changes to its funding protocols, including the suspension of one arts funding program.

The changes come in response to a grim economic forecast for the next two fiscal years that was presented yesterday to the Austin City Council.

Economist Jon Hockenyos, of the Austin economic consulting firm TXP, Inc., told council members that he predicts that a quarter of a million people in Austin could be without jobs within the next couple months, an unemployment rate of about 25%.

“I’m hoping that is a slightly pessimistic scenario, but I think it is a realistic scenario,” Hockenyos said at the council work session, adding that it could take two years for the Austin economy to return to previous levels.

Job losses are expected to hit the hospitality, sales and production sectors particularly hard. And the cancellation this year of SXSW — the city’s largest event with an economic impact of $355.9 million in 2019 — followed by a “Stay Home/Work Safe” order to help prevent the spread of COVID-19, precipitated a severe drop in the city’s sales tax revenue, mixed drink taxes, airport revenues and hotel occupancy taxes.

City arts funding comes entirely from the hotel occupancy tax (HOT), which in recent years amounted to 15% of the roughly $100 million generated annually. However, occupancy is currently down as much as 95% at area hotels, according to Hockenyos’s projections.

“The major events of recent weeks have significantly impacted our ability to plan for next fiscal year,” said an email from CAD that went to all cultural contractors.

The city of Austin does not award grants to arts organizations. It provides cultural arts programs for the Austin community by contracting with arts organizations for specific services.

The prior May 1 deadline for FY21 applications has been postponed and a new deadline will be announced in the coming weeks, the statement from CAD said. Current contracts may be extended to Dec. 31.

Other amendments include a waiver of all matching fund requirements and some event insurance requirements. Work-arounds for adapting events and programming into online or live stream formats are also being negotiated.

However, CAD’s Community Initiatives funding program has been suspended pending more information regarding budget projections. Granting on a quarterly basis, the Community Initiatives program provides support up to $5,000 for individual artists as well as smaller community arts projects and activities.

Disclosure: Sightlines receives support from the city’s Cultural Arts core funding program

Jeanne Claire van Ryzin
Jeanne Claire van Ryzinhttps://sightlinesmag.org
An award-winning arts journalist, Jeanne Claire van Ryzin is the founder and editor-in-chief of Sightlines.

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