‘Bullies have won’ in the SCFD fight, say gagged arts leaders

Stop griping or your funding will be cut.

That was the warning small arts and cultural groups gleaned from their funder, the Scientific and Cultural Facilities District, its small army of lobbyists, and the five giant cultural organizations that benefit most from metro Denver tax funding.

The threats — or at least the perception of them — seem to have worked.

There was no public griping last week when Colorado’s House Finance Committee heard testimony about whether to send voters a ballot measure to renew the SCFD tax this November. Instead, a united front of leaders from roughly 275 arts and cultural groups large and small marched lockstep into the hearing room, praising the tax and efforts to renew it. Then, the committee voted unanimously to support their proposal.

Depending on whom you ask, last week’s SCFD kumbaya was either a triumph in consensus-building or the result of large organizations having bullied smaller community arts and cultural groups into submission.

“The overall process, in my view, was based on intimidation,” said Anthony Radich, the executive director of Western States Arts Federation, a major regional arts advocacy and funding nonprofit.

The coalition that endorsed the SCFD proposal last week included organizations of all sizes from multi-million-dollar Denver-based Tier I cultural behemoths like the Denver Art Museum to tiny organizations like the Tier III Latino dance group Fiesta Colorado and Cleo Parker Robinson Dance, some with budgets as low as $2,500 a year.

By joining the bigger players last week testifying in favor of the SCFD reauthorization plan, many Tier IIIs surrendered their three-year fight to bring more funding to their smaller, community based groups.

Democratic Rep. Dan Pabon likened lawmakers’ efforts to broker consensus among the three tiers to “herding cats.”

Some of those herded are begrudgingly resigned to the outcome: that the status-quo funding formula under which cultural giants rake in most of the SCFD tax revenues will hardly be changed and will be in place for another 12 years.

SCFD is a one-penny-per-$10 sales tax that voters passed in 1988 to save the Front Range’s oldest and most beloved cultural institutions from cuts in statewide arts and cultural funding. Every 12 years or so it has been renewed by the vast majority of voters in the seven counties where the tax is collected, and it is set to expire, if it is not reauthorized, in June of 2018.

As Tier I groups’ budgets have stabilized since the late 1980s, SCFD has allocated more money to smaller Tier II and Tier III organizations. It’s a unique regional arts funding model that’s the envy of cultural leaders nationwide — at least as backers tell it.

Tier I is made up of the Denver Zoo, the Denver Center for the Performing Arts, the Denver Botanic Gardens, the Denver Art Museum and the Denver Museum of Nature and Science. Since voters passed the current funding formula in 2004, Tier I has gleaned the vast majority — 65.5 percent — of SCFD revenues.

That leaves 21 percent to the 26 Tier II groups and 13.5 percent to 247 groups in Tier III. In 2014, SCFD awarded roughly $51,440,812, which translated to $33,484,425 to Tier I, $10,942,108 to Tier II and $7,014,279 to Tier III, according to an audit.

State law requires the sales tax to be renewed every decade or so. If the funding formula doesn’t change, the reauthorization question is sent directly to the voters. If it does change, even slightly as the current proposal would, it heads to the General Assembly first. This gives lawmakers and voters a chance to evaluate whether the program is working.

Under the bill the House Finance Committee considered last week, changes to the formula would be minimal. If the district collected up to $38 million, Tier I groups would receive 64 percent, 1.5 percent less than they do now. Tier II would be bumped up 1 percent to 22 percent and Tier III would be nudged up half a point to 14 percent.

In the case that tax revenue exceeded $38 million, which it likely will, Tier I funding would decrease from 64 percent to 57 percent, Tier II would increase from 22 percent to 26 percent and Tier I from 14 percent to 17 percent.

The SCFD says that while these shifts may seem small, Tier I would be losing $37.3 million, and Tiers II and I would be beefed up $22 million and $15.3 million respectively over the next 12 years.

Critics of the funding structure — both in its current and proposed forms — say it’s unfair that Tier I groups benefit from two-thirds of SCFD tax revenues when they serve only slightly more than one-third of the region’s arts and cultural audience. Tier II and III groups note that Tier I organizations are no longer in the funding crisis that necessitated the creation of SCFD in 1988. Now that they’ve stabilized their finances, the argument goes, SCFD riches should be spread between the three tiers more equitably.

Arguments against the funding structure are partly geographic. The tax is levied not just in Denver, but in six other counties that have grown significantly since the SCFD was formed in the 1980s. All five of the Tier I groups are in Denver’s urban core. Reformers say taxpayers in Boulder, Broomfield, Adams, Arapahoe, Douglas and Jefferson counties shouldn’t have to trek to the big city to enjoy the fruits of their arts and cultural money.

“The districts have changed a lot in 25 years, and Denver is not as dominant in terms of the population,” Susan Honstein, an organizer with the Tier III advocacy group Friends of Arts and Cultural Equity, told The Colorado Independent in October. “We have to have something that’s palatable to all the voters in the district.”

Seismic shifts in demographics and community values also come into play as the Latino and other ethnic and racial populations grow and as arts and cultural groups have sprung up around all manner of social movements. Tier I groups are multimillion-dollar enterprises that traditionally have been led and funded by white men. These institutions receive the bulk of the tax revenues, while groups run by and serving women, communities of color, disabled Coloradans and LGBTQ folks are starving for cash.

Tier I organizations often spend their money bringing in talent from the coasts, triggering discontent among local artists who say they’re being shortchanged. They argue that taxpayer dollars should go toward incubating regional talent.

The SCFD board began planning for the funding reauthorization in 2011. The process to hone the proposal lawmakers are now considering entailed hundreds of hours of meetings board members touted as open and inclusive.

But leaders of some Tier II and Tier III groups say that, when it came to their main concern — the funding formula — the SCFD board voted for a status-quo plan without community input on the numbers.

Natural performers, the Tier III leaders brought skilled theatrics to a series of public conversations, first with their Tiers II and III colleagues and then with the stone-faced SCFD board who listened quietly, asked few questions and blocked change for nearly a year.

In the meantime, leaders of other small and medium sized groups spoke out, blasting the SCFD board for holding secretive meetings, using taxpayer dollars to fund white people’s projects over those of people of color, and favoring Denver over the rest of the region.

At its height, Friends of Arts and Cultural Equity — the nonprofit trying to change the formula in favor of Tiers II and III — represented more than 80 Tier III organizations and had 500 people sign onto an online petition supporting an alternative proposal that would bring more tax revenues to Tier II and III groups.

All along the SCFD board’s response to its critics was clear: Keep questioning the SCFD and you risk alienating the lawmakers and voters who ultimately will decide whether the tax passes. The arts and cultural community must work as a unified front, SCFD lobbyists admonished those calling for reform, lest Colorado’s rabid anti-taxers have a reason to destroy SCFD altogether.

In an effort to appease rebellious Tier II and III leaders, SCFD agreed to entertain several proposals in October 2015. In frenzied speeches, painters, thespians, musicians, arts educators and dancers lined up to rally behind all manner of alternative funding models. SCFD’s board rejected them all, urging the dissidents to unite behind the status-quo reauthorization plan that it finally brought before lawmakers in January.

The funding bill was introduced at the beginning of the 2016 legislative session by Sen. Pat Steadman, a Denver Democrat vested in bringing tax dollars to his central Denver district, home to the Denver Botanic Gardens. He touted the reauthorization proposal as the perfect feel-good bill with which to set the tone for the session and garner bipartisan cooperation and wide community support. After all, folks on both sides of the aisle all appreciate polar bears and Broadway musicals.

Although many critics had bowed out of the fight before it hit the legislature, a handful showed up to lobby lawmakers and testify against the bill.

Some Democrats rallied to the critics’ cause and voted against the reauthorization measure, hoping to signal to the Democratic majority in the House that the bill needed to be modified to address concerns of racial and geographic inequity raised by Tier III leaders.

Opposition also came from some Republicans. Several anti-tax social conservatives such as Sen. Kevin Lundberg, of Larimer County, made predictably ideological anti-tax votes against the measure which would not impact his district.

Fiscal conservatives have long criticized SCFD as a waste of taxpayer’s dollars. Why should everybody shoulder the burden of paying for the entertainment of the few, the argument goes.

Despite a handful of no-votes, the bill overwhelmingly passed the Senate in February with strong bipartisan support and headed to the House where it has been approved and will be sent straight to the governor’s desk, then to voters in November.

Pressure on critics mounted from Tier I organizations, the SCFD board and their lobbyists who warned that if the House amended the bill to be more inclusive and sent it back to the Senate, Republicans there might kill it when they learned it would send more funding to groups serving the LGBTQ community and people of color.

Word began to spread late last year that private foundations were threatening to pull funding from groups whose leaders opposed SCFD’s plan at the General Assembly.

Radich, the powerful arts funder with Western States Arts Federation, hired lawyers to write the private Boettcher Foundation and Bonfils-Stanton Foundation accusing them of threatening to pull Tier III grantees’ funding if they continued to publicly question SCFD’s reauthorization plan.

Bonfils-Stanton Foundation CEO Gary Steuer denied Radich’s accusations as “completely untrue.”

“If anything, we’ve done the opposite” of trying to stymie opposition to the proposal, he said. “We’ve said to organizations that we support that you have a right to express your opinion, and you should express your opinion.”

Likewise, Tim Schultz, head of the Boettcher Foundation, wrote Radich that he “certainly did not mean to raise any undue concern regarding their relationship or potential relationship with the funding.”

“We have never and would never exclude any organization from applying and being given thoughtful consideration because of their views on any legislation, including the reauthorization of SCFD,” Schultz wrote.

Some groups’ leaders worried SCFD itself would pull funding from organizations that criticized the legislation. Murmurs abounded that board members were threatening cuts.

SCFD Chair Dan Hopkins said his board steadfastly dismissed those fears. As to whether lobbyists or other foundations threatened the small groups’ leaders behind the scenes, he couldn’t say, though he strongly doubted it.

True or not, the rumors quashed dissent. One by one, Tier III groups started dropping out of FACE, the Tier III coalition that once had more than 80 members. By some accounts, just three organizations are still in the fight.

Despite its waning numbers, FACE thought it possible to push the Democratic-led House to amend the Senate bill by adding more funding for smaller groups.

Dancer Jeanette Trujillo of Fiesta Colorado is a longtime critic of the racial inequity she said drives the funding structure. She asked her former dance student of more than 20 years, House Majority Leader Crisanta Duran, to back an amendment that would give Tier III a bigger piece of SCFD revenues.

“She was our voice carrying this forward,” said Trujillo. “She was the one who’s brought the communications lines between SCFD and our community.”

In March, Duran explored amending the bill to address Tier III concerns.

As the threat of an amendment loomed, SCFD leadership realized they’d have to compromise with FACE and the Tier III groups if they were going to have a unified front championing the bill in the House.

So in negotiations, SCFD proposed a new inclusivity grant program. According to a letter of intent from SCFD, the $750,000 a year grant is designed to address racial, cultural, disability, gender, sexuality and class disparities in arts funding in the metro area. The grants would be doled out to Tier III organizations that have been around for at least 10 years and will pay for “capacity building” — jargon for fundraising efforts, raising salaries, marketing and outreach, and other nonprofit needs.

As Duran’s dance instructor Jeanette Trujillo tells it, the $750,000 was on the low end of what FACE asked for in grinding negotiations with SCFD’s board. But Duran and FACE ultimately agreed to the offer in exchange for leaving the bill as is.

Tony Garcia of Su Teatro Performing Arts Center has been a constant advocate for changing the formula and agreed to the terms of the grant program.

“On this issue, the Latino community really stepped up and was willing to go much further,” he wrote The Colorado Independent, in response to this story. “We did however agree that this is where we would sit for now. And as honorable, we will honor our agreement. I do not believe we lost. We stepped in when others had given up hope. We continued to fight when others backed down. And now we stand in a position much stronger positioned to continue our fight to better serve our community.”

As for Duran, in a release after the bill was approved by the Senate, she said, “The new grant fund is an incredible victory for smaller organizations and all who benefit from their community involvement.”

In letters to lawmakers obtained by The Colorado Independent, some Tier III group leaders said Duran had been strong-armed into dropping the amendment, much like they had, and that the grant failed to meet the funding demands of their organizations.

Duran said of these charges, SCFD listened to Tier III concerns and “decided to act on their own. I think the decisions they made are a step in the right direction.”

Some critics are skeptical that Tier III groups will ever cash in on their compromise. Instead of being cemented into state law, the proposed grant program relies on the goodwill of the five Tier I boards committing to chipping in $150,000 each year for the next 12 years. If one objects, the whole program could go under.

Dan Hopkins, the Chair of the SCFD Board, told The Colorado Independent he’s confident those fears are unfounded. SCFD has received a memorandum of understanding from each of the Tier I groups pledging to fund the grant program at $150,000 a year. SCFD will try to find additional money for the grant.  

Despite the unified front at last week’s Finance Committee hearing, some Tier III leaders have continued asking lawmakers to torpedo the current bill because of how the reauthorization plan was reached. In the emails to lawmakers, arts leaders listed a litany of complaints. Among them are:

  • That SCFD and its lobbyists bullied groups into backing its proposed funding formula
  • That SCFD and Tier I lobbyists threatened to tell Senate Republicans the Tier III groups wanted to use any additional SCFD money going to Tier III to fund LGBTQ and minority arts programs, risking the rejection of the SCFD reauthorization plan
  • That SCFD lobbyists threatened to circumvent the General Assembly and send the current funding allocations directly to voters, giving Tiers II and III even less money than they would receive under the terms of the current bill.
  • That private foundations threatened to pull funding if their grantees didn’t toe the Tier I line on the SCFD funding structure

Several arts directors voiced these same concerns in interviews with The Independent, but wouldn’t publicly lend their names to the complaints for fear of retribution. Some publicly endorsed the reauthorization plan at the legislature.

“It sounds to me like everyone is afraid to talk. Such a shame,” one of those Tier III directors who testified in favor of the bill wrote in a text message to The Independent on the condition of anonymity.

The director followed up with another message that read: “Again please please please do not use my name or I will lose everything I have.”

Finally, came this third message from the same sender a day before testifying to the Finance Committee in favor of the bill: “I think the bullies have won.”

By most accounts, it’s too late to reevaluate SCFD’s plan. It looks like Tier IIIs were outpowered, out-organized and out-spent by bigger players in the arts and cultural community who want to keep receiving the bulk of the sales tax revenues.

Because small groups often struggle to pay their monthly bills, the promise of a little more cash was enough to shut many of them up.

“$10,000 a year means a lot to a small organization. But what’s $150,000 to those Tier I organizations?” said Stella Yu, the recently retired director of Arts Street, a nonprofit that prepares underserved youth to enter the arts and cultural workforce.

“The (Tier IIIs) got what they thought they could get out of it,” Radich added. “In their opinion, it was the best they could do. They fought hard. They fought against the entire business power structure of Denver. Good for them….They got a bite out of the ankle.”

Radich — who has less to lose than leaders of SCFD funded groups — is one of the few dissenters willing to speak on the record about his ongoing intention to meaningfully change the sales tax’s funding formula. While SCFD has in some years brought more than $50 million annually to Denver metro arts and cultural institutions, he says the quality of work coming out of the region is underwhelming.

“We’re a good regional art center. We should be a phenomenal art center for that kind of money,” he says.

Like the chorus of critics who won’t let their names be used in this story, Radich is resigned that this year’s SCFD reauthorization plan won’t meet the needs of small arts and cultural groups. But he said, the fight will go on. He’s launching an effort to oust the current SCFD board members and replace them with more Tier II and III leaders before the tax comes up for renewal in 12 years. He said, the small players — who don’t have the luxury of hiring spinmeisters and mighty lobbying teams — will need that time to organize and rise up against the big actors.

”We should start working on it now.”


Correction 4/14/2016: The story originally stated that the $750,000 grants would be doled out in $10,000 allotments based on information from a lawmaker. In actuality, the amount those organizations receive has not yet been determined.