Analysis of the 2004-05 Budget Bill Legislative Analyst's Office February 2004

California Arts Council (8260)

The California Arts Council (CAC) was established in 1975. The mission of the CAC is to promote the arts in California. The CAC consists of 11 members, 9 appointed by the Governor (subject to Senate confirmation) and 1 each by the President pro Tempore of the Senate and the Speaker of the Assembly. Members of the council receive $100 per meeting and are reimbursed for travel and other expenses.

The budget proposes to continue current-year funding levels of $3.1 million and 19 positions in 2004-05, about one-third each from the General Fund, the Graphic Design License Plate Account (GDLPA), and federal funds.

Delete General Fund Support for Arts Council

We recommend that the remaining General Fund support of $1.1 million be deleted from the Arts Council's budget given the lack of local assistance grants. (Reduce Item 8260-001-0001 by $1.1 million.)

Department No Longer Offers Grants. In past years, the department's primary mission had been to administer grants to local and private entities for various arts projects. In 2002-03, the department spent $2.9 million ($1.9 million General Fund) in state operation funds for 33 positions to administer over $18 million ($17.4 million General Fund) in local assistance programs and grants. Last year, the Legislature reduced the department's budget to $3.1 million ($1.1 million General Fund), resulting in the elimination of all local assistance activities. Since it no longer operates local assistance programs, the department has been redefining its mission and focusing its efforts on administrative activities related to grants that had been authorized in prior years. In the current year, the number of staff was reduced to 19 positions, a 40 percent reduction. The budget proposes to continue the current-year staffing and funding levels.

Arts Council Should Seek Private Donations. The department reports that it is currently working on raising private donations to increase available funding. We believe this is an appropriate long-term funding source. No donations, however, have been collected yet.

Workload Reduction Expected in 2004-05. The majority of the department's current workload is the administrative activities associated with grants provided to recipients in the past. We believe this workload should be completed by the end of the current year. Any other workload identified by the department could easily be paid for with its special and federal funds. Accordingly, because the work associated with past grants will be finished, we recommend that the remaining General Fund support of $1.1 million be deleted.

General Fund Not Needed for Federal Match. The department currently receives $1 million in National Endowment for the Arts (NEA) federal funds. The state is required to match these funds with its own spending. The NEA does not prohibit the use of GDLPA funds to meet the matching requirement. Assuming the department continues to receive federal funds, the use of GDLPA funds would meet federal matching requirements.