Sales-Tax Plunge Threatens Funding for Parks, Libraries, Arts Groups

May 11, 2020

County sales-tax revenue has plummeted during the coronavirus pandemic, and that’s bad news for groups that depend on funding from the Allegheny Regional Asset District, or RAD.

RAD, funded by the county’s 1 percent sales tax, reported today that revenue for March, the month the shutdown hit, was down 23 percent compared to March 2019.

RAD issued its 2020 budget in November; based on projected revenue at the time, it planned to award some $109 million to libraries, parks, arts groups and more. January and February exceeded expectations. But revenue for March was just $7.18 million – 20 percent below the projected figure. RAD officials said that now – much as it did during the 2008 recession – the group must cut promised funds.

Libraries, which together receive more than 30 percent of RAD funding, might be especially hard-hit. In 2019, the Carnegie Library of Pittsburgh depended on RAD for about $22 million, or two-thirds of its revenue, according to the group’s annual report. The county’s dozens of other, smaller libraries depend on RAD for an average of 25 percent of their funding, said Allegheny County Library Association Executive Director Marilyn Jenkins.

“A drop in RAD funding will impact most on those communities that have the least resources,” she said.

Another 30 percent of RAD's budget goes to parks. The group contributes $22 million to the county’s regional parks and $6.2 million to the City of Pittsburgh’s regional parks. It is also a big backer of 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 the largest, including the Pittsburgh Cultural Trust, to smaller groups like Prime Stage Theatre and the Kente Arts Alliance. Most arts groups were already reeling from the pandemic shutdown, which forced the cancelation or postponement of months of performances, classes, exhibitions and fundraisers, and the revenue that went with them. Many groups have laid off or furloughed workers.

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.

RAD is “why we do so much educational and free programming for the community, as a thank-you for the support,” said Melia Tourangeau, the group’s CEO. “It’s a critical stream for us that is definitely going to impact how we move forward.”

RAD’s year-to-date revenue (through March) is down just 3.2 percent from last year’s figure. But because stay-at-home orders and the closure of nonessential businesses happened only in the middle of that month, April and May numbers are sure to be worse. Moreover, while RAD has a reserve fund that at the beginning of this year sat at $21.6 million, “that reserve goes pretty quickly” with a crisis of this size, said RAD spokesperson Shannon Musgrave.

At the next meeting of the RAD board, on May 21, the group’s allocations committee will make recommendations on the cuts, Musgrave wrote in an email. “We anticipate further declines in revenue in the coming months and will continue to make adjustments as necessary,” she added.

While RAD funding does not make up a huge portion of the budgets of most arts groups, its grants are the main reason government support of the arts in Allegheny County is more robust than in most metropolitan areas, according to benchmarking studies by the Greater Pittsburgh Arts Council. RAD also sponsors an extensive annual series of free events known as RADical Days, to thank the community for its support.

For libraries, the expected cuts are even worse than they first appear, said Jenkins. In addition to losing direct RAD funding, many small libraries around the county also receive a portion of the property-tax-abatement funding RAD contributes to their counties. (Such funds are drawn from the half of the county’s sales tax that RAD doesn’t issue in grants.) Now those funds are likely to be reduced, too, as is the crucial funding RAD contributes to the EINETWORK, the technological infrastructure that supports all the county’s libraries, said Jenkins.

Jenkins cautioned that even after the pandemic shutdown ends, the echoes of the lost revenue will likely sound for a while.

“The challenge isn’t just for this current year,” she said. “I think depending on how quickly our economy recovers, there could be additional challenges for next year in terms of RAD funding as well.”