Favoritism for Salt Lake County’s biggest arts groups was baked into ZAP tax funding. Should that change?

The Utah Symphony had run at a deficit for eight years straight; it had raided endowment funds and considered its major donors tapped out. Desperate for new funding, it lobbied with other struggling fine arts groups for a new sales-tax increase to support culture and the Hogle Zoo.

The response from Salt Lake County voters in 1993 “wasn’t only `No,'” then-Commissioner Brent Overson said at the time. “It was, ‘Hell, no.'”

Opponents had portrayed the proposal as a tax on the poor to pay for the pleasures of the rich. But when it was redesigned and put on the ballot again in 1996 to also benefit the county’s parks and pools, voters got on board.

Now, as the growing number of small arts groups reflects the county’s increasing diversity and population, some supporters of the arts question whether it’s time to reexamine how the millions raised by the tax are divided.

About two dozen arts nonprofits with the biggest budgets — including the now-combined Utah Symphony | Utah Opera, Ballet West, and Pioneer Theatre Company — have a lock, by law, on the biggest share: 45% of the total.

Nearly 200 smaller groups jockeyed last year to share 9% of the revenue raised by the one-tenth of 1% sales tax.

The Symphony | Opera has received more money each year since 1997 than all of the funded small arts organizations combined, according to an analysis by The Salt Lake Tribune.

In 2017, it received $2.3 million, while 171 small groups split $1.9 million. The nearly $51 million it has received represents almost 28% of all the Zoo, Arts and Parks (ZAP) taxpayer dollars given to large arts groups since the program’s creation.

Max Chang, former chairman of the ZAP board that oversees large arts groups, is calling for a “thoughtful revamp” of the formula. A restructuring could help realign the program with the mandate of voters, he said, who wanted their money spread beyond institutions they saw as “too elitist.”

“By understanding that we need to include the aggregate, the greater good of this whole county, that’s when [the tax] passed,” he said. “So we need to keep that same principle in mind, that it’s not just for who serves the most, who’s the most prolific, who’s the most well known.”

Others worry that opening up the law to any changes at the state Legislature could diminish financial support for the county’s arts organizations.

“There could be catastrophic results if we were to start messing with something that’s been working,” said Crystal Young-Otterstrom, executive director of the Utah Cultural Alliance.

“The important issues of equity and access and making sure our diverse audiences are being served is a question that does need to be addressed,” she said, “and I think there are many creative ways the cultural sector can address that” without changing the law.

While more than half the money raised by ZAP goes to the arts, county recreation facilities get 30%.

Hogle Zoo, Tracy Aviary and the Loveland Living Planet Aquarium split 16%. About two-thirds of that share is funneled to the zoo, which has since 2013 been the largest ZAP recipient. It’s projected to receive $2.5 million for 2020, followed by the symphony and opera at $2.3 million.

Struggle and ‘largesse’

Support for the biggest of the big arts organizations is baked into the law that allowed for the creation of ZAP.

Large arts groups are funded under its Tier I formula, which currently limits the pool to 22. Once a volunteer board scores each application to choose those, its power to make decisions is over.

The law automatically divides the available Tier I money among the 22 under a system that tends to grant the most to groups that spend the most. So the top six funded large arts organizations have taken nearly 70% of Tier I dollars available since that time.

That system sometimes “reward[s] bad behavior,” Chang said. “We reward those who keep spending without regard” and sometimes “penalize organizations that take thoughtful, correct and prudent cuts to their budget and then they get less as a result.”

As part of their applications, Tier I groups are required to meet a threshold of spending and submit audited financial statements.

Patricia A. Richards, interim president and CEO of Utah Symphony | Utah Opera, said its ZAP allocation makes up about 10% of the organization’s overall operating budget. It has been an important stabilizing force, she said, as the group attempts to keep afloat one of only 15 full-time orchestras in the United States.

“This is, to my knowledge, the smallest market in the country that has a full-time orchestra,” she said. “And if you put that together with a nationally recognized ballet company, a very fine regional opera, with the theater, the museums we have here, that allows Salt Lake to kind of, I think, punch above its weight in terms of quality of life.”

Utah legislators shared that general thinking in building the foundation for ZAP, saying that public funding for the arts helps “enhance the quality of life of Utah’s citizens, as well as the continuing growth of Utah’s tourist, convention and recreational industries.”

Through ZAP awards, state dollars and other grants, the Utah Symphony receives the second highest level of public support among the 24 biggest orchestras in the nation that participated in a 2017 report from the League of American Orchestras. Only North Carolina’s taxpayers provided more funding to their orchestra.

Richards said orchestras are “relatively costly” to run compared to museums, for example, since most of their expenses come from personnel costs. But she said every dollar the county has put into the symphony has a “high rate of return” for the taxpayers.

“Sixty percent of our total budget is for personnel," she said, “so that means those people live in Salt Lake County, they pay taxes here, they buy homes here, they shop here and that has a real impact on the economic standing of the county.”

As the County Council approved Tier I funding in December 2019, then-Chairman Richard Snelgrove spoke generally about the formula in observing that there are many struggling arts groups, while others have “largesse.”

“Once an organization reaches a certain level of continued success, having got there through the ZAP program, then should not their level of participation be reevaluated to make room for others? Other struggling organizations?” he said at the time.

Supporting a ‘cultural mix’

Amid Utah’s massive population growth, many of the state’s arts nonprofits have begun thinking more critically about how they provide programming for a changing population — and it’s a county requirement for each ZAP applicant to spell out exactly how it’s working to do that.

The Utah Symphony has programs that give free tickets to those in lower income brackets and takes its music to students around the state. It also has a Hispanic and Latino Community Outreach Task Force that is working to attract Latinos to its performances and to offer concerts in their communities.

“We are [in] a changing demographic like the rest of the country," Richards said, “and that has to inform our programming and everything we do.”

Gonzalo Peña, a member of the Latino advisory board, said one of the challenges in reaching diverse audiences is a perception that what the symphony and opera have to offer is “an elite thing.”

But he believes the symphony’s size gives it the opportunity to engage new communities, including immigrants. Peña pointed to a recent concert featuring a Mexican visiting conductor, which he said was a “moving” experience.

“If you see arts as something that belongs to one particular group, whether it’s social or ethnic or religious, then you’re creating a divide that can also be healed through art,” he said.

“If you make an effort in helping those smaller groups [of people feel] welcome, at the very least acknowledge them, declare that they exist and there is a place for them and not only in arts but society,” Peña continued, “that’s only going to be a benefit for everyone.”

The smaller arts organizations — covered by ZAP’s Tier II program — often are inherently diverse, with groups like the India Cultural Center of Utah, Artes de México en Utah, and the Adopt-A-Native-Elder program, which provides hands-on learning experiences about the culture and art of the Navajo Nation.

There is no limit on the number of groups that can receive grants. Awards can range anywhere from $1,500 to around $90,000, and the volunteer board has discretion to set awards as it sees fit, unlike the prescriptive rules that govern Tier I.

“Tier II is so wonderful because they are really getting that cultural mix in for us in the city and county,” Chang said. “I think it’s a great amenity for us as a citizen, as a resident. It’s a great attraction for those of us who want to move here. It’s a great attraction for those who are visiting here.”

But the number of funded small arts groups has jumped by more than 200% since ZAP first passed — from 63 in 1997 to 192 in 2019. And while the total amount of money raised by the ZAP tax has grown since that time, the department that runs the ZAP program has estimated competition for these grants will only become tougher in coming years, which could reduce awards per organization.

That’s a worry for Ghulam Hasnain, executive director of Salt Lake American, which puts together a multiethnic cultural performing arts show each year and offers language interpretation and translation for refugees.

He’s received ZAP awards each year since 2005 but said his group still operates on a “very shoestring budget.”

Salt Lake American was projected to receive $2,000, according to the most recent numbers available from ZAP, and “without that [help], I would not be able to do the festival,” Hasnain said. It takes place annually on Saturday of Labor Day weekend, in partnership with Salt Lake City’s Downtown Farmers Market.

Hasnain believes small groups should share more than 9% of ZAP proceeds as the state’s demographics change.

“There are a lot more smaller organizations than bigger ones,” Hasnain said. “There are new ones coming in and the competition is growing; there’s more and more of them.”

‘It can ruin a good thing’

Richards, with the symphony and opera, said she would love to see funding for small arts groups grow but that it shouldn’t come at the literal expense of the large arts nonprofits.

“ZAP has proven to be extremely valuable to our community,” she said, “but it’s not valuable to the community to take away from the core arts organizations that have the highest return for the community, the highest return on investment and the biggest economic impact — and, frankly, the biggest arts impact on the community.”

Smaller groups inside the Tier I bracket aren’t exempt from the growing competition for money. This year, two nonprofits that were Tier I recipients for 2019 didn’t receive funding in that tier: Preservation Utah, which advocates for preserving historic locations, and Art Access, which fosters artists with disabilities and from marginalized communities.

“In Tier I, there are huge organizations that are growing at a rapid pace and those organizations are eating up more and more of the Tier I pie,” said David Amott, interim executive director of Preservation Utah. “And that left less and less for the smaller fish.”

Amott said Preservation Utah has reapplied for a grant under Tier II and expects to receive the same amount as it did in Tier I.

Two former Tier II organizations moved up this year into Tier I: The Utah Arts Alliance, which supports artists with studio space and also runs the annual Urban Arts Fest; and the West Valley Arts & Cultural Foundation, which operates the Utah Cultural Celebration Center.

Without changing the law, the Tier I advisory board has in recent years tried to address some inequities in the ZAP system, Chang said. Although Tier I awards are based on spending, the board has capped the amount groups can claim for some expenditures, like with salaries and rent.

The former guidelines make it, for example, “so you can’t just go and build a spanking new beautiful building and be paying a high rent and all of a sudden get basically a discount on that lease amount” through ZAP, he said.

But he’d still like to find ways to give the smaller organizations within Tier I “a little boost,” such as by removing the caps on the spending they can submit to ZAP, or creating even stronger caps for the largest groups in the tier.

Chang said he’d also like to see the Tier I board empowered to do more, such as rewarding organizations that have strong financial health or that are going above and beyond with their diversity efforts.

Young-Otterstrom said there are conversations Utah’s cultural community needs to have, and has been having, about how to ensure equity in public funding. But she believes those discussions should happen within that community, not during debate about changing the law.

“All of us would agree that the [ZAP] program does incredible things for everybody, and sometimes when we look into other ways, sometimes it can ruin a good thing,” she said. “We should be clear [about the] potential consequences as we have this discussion.”

Since Tier I money is distributed based on what large groups spend on qualifying expenditures, the funding decisions aren’t arbitrary, she noted. That creates what she sees as a more rigorous and fair process than how similar taxes are divvied up elsewhere in the state.

“The beauty of the Salt Lake County ZAP program is that this process is spelled out so clearly in statute, thus giving everyone as fair a shake as possible,” she said. “The program has and will evolve to meet the needs of the community.”

The Legislature has already changed the program, including by increasing the share for small arts programs from 5% under the original law to 9% today.

Chang said he shares fears about a revamping of ZAP. But at the end of the day, he believes the system, which passed with a wide margin in 2014 and will be up for voter approval again in 2024, can be better.

“The worst thing to do is get rid of it,” he said. “The second worst thing is not to do anything about it and the best thing about it is to understand its strengths and where we can improve it.”