BRUNSWICK, Maine — A veto announced Thursday by Gov. Paul LePage denies Maine’s nonprofit performing arts organizations exemption from sales tax, which hits Brunswick harder than much of the state.
In the case of the Bowdoin International Music Festival, the veto means $12,000 in sales tax it would not have paid with the governor’s signature on LD 205, according to music festival’s executive director, Peter Simmons.
That high level of tax is uncommon for arts organizations, Simmons said. But Brunswick has an uncommon grouping of performing arts organizations in the state.
Maine State Music Theatre executive director Steve Peterson said his organization is working to overturn the governor’s veto, a feat that would require two-thirds of the state Senate’s support.
“I think the governor’s stance on this is disappointing at a time when arts organizations are struggling to exist,” Peterson said.
Maine State Music Theatre pays around $16,000 annually in state sales tax, Peterson said.
Combined sales tax paid by the two Brunswick organizations makes up more than half of the total sales tax generated by performing arts nonprofit groups statewide.
“We’re two of the largest [performing arts nonprofits] in the state,” Peterson said.
A fiscal note attached to LD 205, which state Sen. Stan Gerzofsky sponsored, estimates total loss of state revenue if nonprofit performing arts organizations were exempt from sales tax at around $45,000 annually.
During the bill’s formation, both organizations lobbied strongly with Gerzofsky for the tax break that they say intended to put performing arts nonprofit organizations on par with other nonprofits — such as summer camps and museums — in terms of sales tax exemptions.
While the Bowdoin International Music Festival pays tax on lodging for its students on campus, Simmons said, other educational summer camps at Bowdoin College and around the state do not, which he said years ago he thought was merely an oversight.
When the sales tax exemption was created for certain nonprofits, Simmons said, “performing arts organizations were not included and I can only speculate that it was because there wasn’t someone at the table representing that interest.”
Simmons said that most of his organization’s tax costs — around $10,000 — come from paying room and board for students who arrive at Bowdoin College’s campus for the annual music festival.
Simmons said he approached Gerzofsky years ago about the legislation that eventually made it to the floor of the Legislature during the 2011 session.
“It was an attempt to level the playing field for our organizations,” Simmons said.
Along with the veto of LD 205, LePage also vetoed bills by Sen. Troy Jackson, D-Allagash, and Sen. Phil Bartlett, D-Gorham, that dealt, respectively, with tax credits for logging companies that hire Maine residents and energy efficiency.
In a letter to the Legislature regarding the performing arts veto, LePage wrote, “Performing arts organizations are important to the cultural fabric of Maine. However, simply because something is good does not mean it should enjoy tax-free status.”
Adrienne Bennett, spokeswoman for the governor, told The Times Record on Friday that LePage’s tax cuts will focus on senior citizens and “job creators.”
In his letter, LePage wrote that he strongly supports tax relief, but it “must be in terms of an overall plan.”
“Exemptions from the sales tax should be saved for the necessities of life — food, shelter, medicine — as well as for important initiatives meant to foster growth and create good-paying jobs in Maine industries, increasing our overall tax base,” LePage wrote.
Simmons said he disagrees that his organization does not foster growth.
“Our impact is about $3 million a year in the area and Maine State Music Theatre’s is even larger,” Simmons said.
Peterson said Maine State Music Theatre generates an estimated $5 million locally.
“And it’s not just the money that we bring into the state,” Simmons said. “Most who are involved in our programs as students and performers come into the state and bring that revenue here to spend.”
In the case of Maine State Music Theatre, which has an annual budget of around $3 million, Peterson said that sets, costumes and other production equipment are most often built locally with materials purchased locally.
“We affect and help the businesses that surround us because everything is purchased and built on site,” Peterson said.
Of Thursday’s veto, Peterson said LePage is missing the economic impact of arts statewide.
“I don’t think the governor realizes the impact the arts has in the state and what a major source of business they are for the state,” Peterson said.
For the international music festival, Simmons said that to support annual operations he raises approximately $500,000, and $12,000 of that will continue to go to sales tax he said could otherwise go back into the program.
“For me, it’s a big thing — it’s a lot of money,” Simmons said. “It’s enough for me to provide benefits for one of my employees.”
Or, it might be enough to expand employment, Simmons said.
“We hired a person part time this year who I had considered hiring full time, but I can’t afford it,” Simmons said.
From the state’s perspective, Simmons said he understands working with limited resources.
“The state has a budget problem,” Simmons said. “Every cent counts, but I do think that for the paper industries and other industries — they get multi-million dollar tax breaks, and I think that’s great. It generates or helps business, but I think that we fit in that category, and that’s my real argument.”
To see more from The Times Record, visit timesrecord.com.
Arts programs put the human in humanity. With the cuts to the arts over the past couple of decades we have seen a coarsening of society and the quality and complexity of music being produced. Kids are no longer taught how to master an instrument or even how to appreciate the complexities of all forms of music whether it be classical, jazz, or contemporary. If you look at popular “music” today, in my opinion, you do not see the complexity and depth that exists in what now amounts to very small segments of the industry (classical, jazz, etc.).
To me, if you took away the lyrics to today’s rap music, you don’t really have any music. It is just repetitive percussion (yawn!). I can get that from a synthesizer on automatic. Add in the fact that the lyrics are undecipherable in most cases and you have just noise. Some have claimed our lack of musical training/appreciation in schools has contributed to this rather pedestrian music.
But, I am an old fuddy-duddy. I will stick with Mozart, Gershwin, Copeland, Cole Porter, Ella Fitzgerald, Frank Sinatra, Stevie Wonder, and a multitude of classical and jazz greats.
I was playing some of my favorites in the car the other day and my 11 year old’s friend (another 11 year old) asked, “Who is that?” She had never heard the music. Very sad. Very unfortunate.
The benefits of Arts programs are difficult to quantify. But, for the small amount of money they cost (or, in this case, sales-tax revenue not received), the “raising of the bar” they establish and the “humanity” they instill in our young people, along with the lifetime of appreciation, the costs seem minuscule.
My guess is LePage has little appreciation for the Arts (to whit, “the mural”). Otherwise, he would not have vetoed this bill.
Well written. Right on. (that’s in the sense of correct, not a political statement)
Small business have been feeling the pain for many years and think it’s time others do as well… including non profit organizations.