Alderman Ann Rainey, 8th Ward, proposed during a budget debate Monday night that the city should expand the scope of its amusement tax to provide more funding for local arts programs.

Rainey, who first proposed the idea of a progressive real estate transfer tax that was narrowly approved by voters earlier this month, said non-profit theater groups, now exempt from the tax, like Theo Ubique, which plans to open next month on Howard Street, should have to collect the 4 percent tax on ticket revenue.

Rainey’s proposal came after Judy Kemp, board president of the non-profit Mudlark Theater, pleaded with aldermen to restore more of the arts funding initially proposed to be cut from the city’s 2019 budget.

Kemp said she was delighted that $50,000 for cultural arts programming grants had been added back into the budget, but asked that at least a portion of the $125,000 in funds to staff the programs be restored as well.

Judy Kemp.

“Arts are crucial to the quality of life in the city and bring people together for a common purpose,” Kemp said.

Mudlark Theater received $3,000 from the city’s cultural fund grant program this year.

The amusement tax now brings in between $250,000 and $400,000 per year. That revenue is now assigned to the city’s economic development fund.

The largest slice of amusement tax revenue comes from the movie theaters downtown, City Manager Wally Bobkiewicz said, but some for-profit live performance venues, like Space, also pay it.

Government agencies, religious organizations, and “live performances conducted or sponsored by not-for-profit institutions, organizations, groups or societies where no part of the net earnings inure to the benefit of any private shareholder or person” are exempt from the tax.

Everything from  comedy performances to poultry shows are included in the definition of an amusement. But athletic contests, which are subject to a separate city tax, are excluded.

Bobkiewicz said he had no way to quickly estimate what expanding the tax to cover non-profits would yield in additional revenue.

Aldermen took no action on Rainey’s proposal Monday night, but it may come up again at their next budget session on Monday, Dec. 19.

Bill Smith is the editor and publisher of Evanston Now.

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  1. Terrible Arts Policy

    It has been almost a week and I still cannot understand why Alderman Rainey thought this was a good idea.  Taxing non-proft arts organizations to raise money for the Evanston Arts Council?  Evanston would take money from these orgs and then offer them the chance to apply for a grant to get some of it back?  (Granted, of course, they could prove that their project was “equitable” and something that was “worthy” of the great City of Evanston.)

    This would be a terrible idea.  Taxing 4-5% of ticket revenue?  What exactly does Alderman Rainey think the profit margins are for non-profit arts organizations?  If they don’t already have space or need Cahn Auditorium, why would any organization choose to stay in Evanston?  Would we tax Northwestern?  The student productions?  What about the high school?

    Let me be blunt.  Evanston is already suffering from a lack of intelligent arts policy.  You know how the City Council gets so upset that these start-up companies founded by Northwestern students leave Evanston as soon as they get funding?  Well, that’s been happening in the Arts for 75+ years.  Northwestern is one of the world’s great Theatre schools…but you’d never know it walking off-campus.  Because, for the most part, NU students don’t work on shows in Evanston…don’t see shows in Evanston…and don’t start their theatre companies in Evanston.  And, when they graduate, they leave Evanston…sometimes just across the street to Rogers Park.

    I believe wholeheartedly that governments should invest in arts and artists — but this tax is not the answer.  And if Alderman Rainey wants more money for the EAC, then she should look at Fleetwood-Jourdain. (Why again are we paying their bills when we don’t do that for any other company?  (Oh, right….)

    1. Right on

      I agree completely. We of the non-profit theater world would have to pass on the tax to our patrons, a logistical problem, especially as we are trying to keep our ticket prices down, and build audience. 

      Our company has never (well, not recently) asked the city for any money. To my knowledge, we never received any.

      A system where the companies pay a tax so that some select few can get a handout from those funds makes no sense. The city should be  trying to encourage people to attend theaters and companies to thrive.  This isn’t the way….

      1. Nope

        Actually it should be your patrons that support you, because if they don’t, well you wouldn’t be in business.  It’s shouldn’t be the taxpayer’s burden to support your desire to produce “art”

        1. Agreed

          Cautionary tale – 

          Let’s remember the Evanston Arts Center who conveniently left the Harley Clarke Mansion in such dis repair after leasing the mansion from the city for nearly 50 years, paying close to nothing in rent a month.  Has the EAC ever made an attempt to fund any repairs, or in good faith give back to the mansion?  No.  And now they enjoy their swanky self serving new facility in North Evanston, underwritten by donors.  

          Pay your fair share non profit art organizations… and if your patrons have to accept this burden, then that is the cost of doing business… or art, I guess.  No more free passes.

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