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Cash from CACHH

For the last decade, Houston's arts organizations, big and small, have engaged in a polite -- if sometimes strained -- agreement over how they would split the money available to them from the city. Revenue received from the arts' cut of the hotel occupancy tax would go to the Cultural Arts Council of Houston/Harris County (CACHH), which would then receive grant applications, put them through a review process and come to a decision about who got what. Though it was rare that anybody got everything they asked for, the field, at least, was thought to be level. Nobody got special treatment; everybody had to compete for what they wanted.

This month, though, that promises to change. When City Council reviews CACHH's annual contract to manage the city's arts grants, it will hear a new refrain from the major downtown performing arts groups, who want to end their uncertain annual struggle with smaller arts groups for funding and receive a guaranteed slice off the top. Led by David Gockley, general director of the Houston Grand Opera, the Theater District Association will be asking that close to 50 percent of CACHH's financial assistance program be set aside for the exclusive use of HGO, the Houston Ballet, the Houston Symphony, the Alley Theatre, Theatre Under the Stars, the Society for Performing Arts and Da Camera. Then everyone else can scramble for the remaining 50 percent.

The argument, Gockley says, is simple. The 1977 legislation that set aside a percentage of the city's hotel occupancy tax for the arts said that the tax "may be used only to promote tourism and the convention and hotel industry ...." And it's the downtown arts groups, he insists, who draw the tourists, not the smaller neighborhood organizations. "We consider ourselves a major asset of the city to the extent that the arts and entertainment industry generates tourism and goodwill for the city," he says. Gockley also notes that, although CACHH's hotel tax receipts have nearly doubled during the last ten years, grants to the major performing arts groups have dropped while grants to smaller groups, many of them concerned with educational and social purposes, have risen.

As far as most of the smaller arts groups are concerned, that's the way it should be. Despite the boilerplate about encouraging tourism, they argue, the legislation that established CACHH was clearly a way to get public money to arts groups that helped the Houston public. And while CACHH has long made grants decisions using standards such as artistic merit, community service and administrative competence, the promotion of tourism and conventions has not been in its list of funding criteria. Indeed, if such a requirement were strictly applied, the city's topless dancers might be due some major grants.

In the mid-'80s, Houston's major arts groups, including the Museum of Fine Arts as well as the Theater District Association's performing arts groups, received 75 percent of the available hotel tax revenues, with the remaining 25 percent being divided among small groups who competed for awards of a few thousand dollars that could be a matter of life and death for their organizations. But minority arts groups questioned why the majors, who had far greater resources for raising money, should get such a large guaranteed chunk, especially when they weren't held accountable for serving a community that was increasingly made up of minorities.

It was a question of equity, they argued. Tax money would be better spent on arts education that kept kids off the streets than on subsidizing the ballet, opera and symphony tickets of well-heeled, white, middle-class citizens. They wanted a bigger slice of the pie, and wanted all grants to be awarded through a competitive review process. Council agreed, and the majors bowed to the pressure.

At the time, they could afford to; federal and other arts grants were easier to come by, and what the large arts organizations lost from the city they felt they could make up elsewhere. Now, though, that outside funding is drying up, and newly legalistic views of the purpose of the hotel tax such as Gockley's stem from self-preservation. Like many other major performing arts groups around the country, Houston Grand Opera faces financial uncertainty. Last year it received $300,000 from the National Endowment for the Arts. This year it got only $140,000, and "we don't know if the [NEA] will be in existence beyond next year," Gockley says.

As a result, local funding has become more important. And Gockley complains that over the last decade, CACHH funding to the Theater District has declined both in real terms and as a percentage of the organizations' budgets. In 1985, CACHH grants to theater district organizations peaked at $1.13 million, or 3.68 percent of their total budgets. CACHH grants dropped to a low of $660,000 in 1989 and then climbed back to $1.08 million this year. But that now amounts to only 1.82 percent of the majors' total budget.

 

What Gockley and the Theater District propose to do is stabilize their hotel tax receipts by being guaranteed 5 percent of the city's share of the hotel tax, which amounts to about $1.4 million. The performing arts groups would divide 90 percent of that money according to the size of their various budgets, while 5 percent would go to promoting the Theater District and another 5 percent would be set aside as a subsidy to help smaller groups afford to rent the city-owned downtown theaters for special performances.

The money that Gockley and his group are asking be tagged specifically for them amounts to more than half of what CACHH handed out in financial assistant grants in the 1996 fiscal year. This year, CACHH funded 34 percent of the eligible applications for general operating assistance, granting $2.7 million of $8 million in requests.

Marcia Noebels, the outgoing president of CACHH, says she has no problem with the performing arts groups' concern about stabilizing their income. But she is concerned about accountability.

"We've always felt it was critical to spend public dollars in a public manner," Noebels says. "There are published criteria [for grants], and they were not created out of the heads of bureaucrats. They were created by the arts groups. That's called fairness."

Alice Valdez, director of the nearly 20-year-old Multicultural Education and Counseling through the Arts (MECA), is organizing a response from the smaller arts groups. She says the peer review panels have helped pressure the major organizations to do more community outreach.

"The majors don't want to go through the same process as the small minority groups have to do through," Valdez said. "I can't understand the city wanting to go back to that elitist system. They won't have to be accountable for community outreach .... It's like going back to the good old boy system. Its really sad. I thought Houston had more of an international system."

But according to Gockley, "The peer review process is a non-issue." The Theater District, he says, will conduct its own accountability review that will cost the city nothing.

Jordy Tollet, director of the Convention and Entertainment Facilities Department for the city, which administers the hotel tax and supervises the Arts Council's contract with the city, has indicated he'll support Gockley and the Theater District's drive to get a guaranteed cut of the tax revenue. It could even, he says, help CACHH. "By not having to worry about the majors," says Tollet, " you cut red tape and cut the overhead of CACHH."

Of course, Tollet and the city have not shown a reluctance to cut into CACHH's review process. Though CACHH distributed only $2.7 million to arts organizations in fiscal '96, its income from the hotel tax was closer to $5 million; the extra $2.3 million went in part to overhead (about $900,000) and in part to non-competitive grants. A little more than three-quarters of a million dollars went to Miller Outdoor Theatre to help pay for free public performances, while another $30,000 went to other parks and $160,000 went to something called the Mayor's Initiative Fund. That fund was established in 1993 by Mayor Bob Lanier and has been used to funnel money to groups such as Funday in the Park ($60,000) and to help pay for, among other things, Christmas tree lighting ceremonies ($5,000). It's also been used in emergencies. For instance, the Houston International Festival was recently given money from the Initiative Fund to house an African dance troupe that had been scheduled at the last minute.

The mayor's fund, though, is small change compared to what the Theater District is after. And some CACHH supporters are worried that if the opera, ballet, symphony, Alley, TUTS, SPA and Da Camera get what they're after, the museums -- the MFA, Menil and others -- won't be far behind in asking for their guaranteed slice.

If that happens, then all but a small percentage of the money that CACHH now administers will be placed into non-competitive set-asides, effectively gutting much of the organization's power. That may not make everyone unhappy; there appears to be some resentment that CACHH is no longer a "pass-through" organization that gives money to groups and has, instead, become an entrepreneurial organization in its own right, with 18 employees and a wide range of activities in public art and arts promotion. In encouraging small arts organizations to grow, it has diluted the resources available to the larger groups.

Clearly, CACHH is facing a test for its future. If the Theater District is successful in chipping away their chunk, then ten years of sometimes confrontational but often cooperative grantsmanship between Houston's big arts groups and small arts groups will be gone, and the organizations will be divided again between those who have a done deal with the city, and those who must prove themselves in competitive reviews again and again.

 


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