One of the area’s largest and most stable sources of funding for libraries, parks and arts groups is cutting about $20 million in grants this year due to the effects of the coronavirus pandemic.
The board of the Allegheny Regional Asset District, or RAD, voted Thursday to slash 20 percent of operating grants across the board, and to suspend indefinitely millions of dollars more in capital funding.
RAD had budgeted about $109 million for operating and capital grants in 2020. But the board decided it is unable to meet those obligations because of a plunge in county sales-tax receipts, its sole source of revenue.
Sales-tax receipts for March – the latest figures available, and reflecting only the first two weeks of the pandemic shutdown – were just $7.18 million this year, about 20 percent below projections. Receipts from April, during which the shutdown was in effect all month, are likely to be even lower, acknowledged board member Daniel J. Griffin, who presented the report from RAD’s Allocations Committee.
The news was not unexpected. But it hits at a time when libraries, museums, performing-arts groups and others have been closed for more than two months to prevent the spread of the virus. Earned revenue for most such groups has disappeared, and many have had to furlough or lay off staff. Even in the yellow phase of reopening, as ordered by Gov. Tom Wolf, libraries, museums and performing-arts groups are unable to re-open, and it’s unknown when they'll be able to host large numbers of people again.
“We want you to know that we are very conscious of the difficulty that all of our assets are in,” said board chair Dusty Kirk at the board’s monthly meeting, which was held via Zoom.
Kirk said that RAD had explored alternative funding sources to fill the revenue gap, including loans and public-financing tools, like bond sales. But she said administrators decided against them.
“We find that it’s really premature to take on additional debt,” she said.
Instead, RAD will draw on its cash reserve, which stood at $21.6 million as the calendar year began, according to the group. And it will hope to replace at least some of the grant money at a later date, as the economy improves. That’s what happened in the period after the 2008 recession caused RAD to cut promised funding.
“We were able to restore some of the funds as things got better,” said Kirk at Thursday’s meeting.
RAD is funded by half the county’s 1 percent sales tax. (The other half is distributed directly to municipalities.) More than 30 percent of RAD grants go to local libraries, including the Carnegie Library of Pittsburgh, with which its 19 branches relies on RAD for about $22 million or two-thirds of its revenue, according to the group’s annual report.
Another 30 percent of RAD's budget goes to parks. RAD also supports such destinations as Pittsburgh Zoo & PPG Aquarium, Phipps Conservatory and Botanical Gardens, and the National Aviary. And it helps fund the Port Authority, and pays debt service on the sports stadiums and David L. Lawrence Convention Center.
About 13 percent of RAD’s funding each year supports arts groups from large to small. Pittsburgh Symphony Orchestra – which in late April announced temporary salary reductions for its musicians and some administrative staff – was set to receive $1.6 million this year from RAD, or about 5 percent of its $32 million budget. The RAD vote leaves a $320,000 hole in the PSO's budget.
Few groups depend on RAD for as big a grant as the PSO, or as high a percentage of their budgets as does the Carnegie Library of Pittsburgh. But since its inception, in 1995, RAD has been a reliable source of funding for many nonprofits, and a big reason why government support for the arts is stronger in Pittsburgh than in most other large U.S. cities.
Griffin said the Allocation Committee will meet monthly to monitor the situation. County sales-tax figures for April should be released in early June.