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Arts stimulate rural economies
While the arts often are perceived as a metropolitan amenity, they are prevalent throughout Northeastern Minnesota and Northwestern Wisconsin – where private and non-profit ventures are substantially stimulating the economy.
The Discovery Center in Chisholm and the Big Top Chautauqua near Washburn are prime examples of how vibrant non-profit organizations can stimulate rural areas.
In its 36th year, the Discovery Center has grown to become the largest non-profit museum/repository in the region. Its 2011 revenues exceeded $1.8 million.
Big Top, the region’s largest non-profit performing arts organization, reported 2011 revenues exceeding $1.5 million.
“The indirect benefit to the lodging industry, restaurants, retail stores, gas stations and other businesses has been estimated by the Wisconsin Department of Tourism as $4 million annually,” Big Top said in its 2012 annual report. During 27 seasons, the outdoor venue cumulatively attracted more than a half-million patrons and generated $108 million in spending.
A BusinessNorth analysis of 25 non-profit regional organizations determined they made a direct financial impact of $13 million during the 2011 reporting year.
They also generated substantial indirect spending.
“People who perform or attend shows (at Big Top Chautauqua) usually stay locally, and there’s a two-night minimum during the summer. So they stay, eat and buy locally for two days,” said Big Top marketing consultant Jamey Penney-Ritter. On average, “Any event that’s drawing out-of-towners generates $130 to $150 a day,” said Terry Mattson, President/CEO of Visit Duluth.
“The arts touch people in a lot of ways. Not only do they entertain, but they employ people who buy locally,” said University of Wisconsin-Superior Economics Professor Jerry Hembd, a former member of the Wisconsin Arts Board.
According to a 2008 study by Minnesota Citizens for the Arts, residents spend $19.48 per event, excluding the ticket cost. So-called “cultural tourists” spend even more – $44.95 per person per event.
Another study, “The Arts: A driving force in Minnesota’s Economy,” pegged the statewide economic impact at $838.5 million in 2004. Adjusted for inflation, that’s $1.0 billion today.
In terms of jobs, non-profit arts groups in Minnesota’s Arrowhead region directly supported 254. That number grows to 904 when the impact of audience spending is factored in, according to studies conducted by Minnesota Citizens for the Arts and the Forum of Regional Arts Councils.
“The impact is very high throughout the Arrowhead Region,” said Robert DeArmond, executive director of the Arrowhead Regional Arts Council. For instance, the arts generate more revenue statewide than professional and college sports teams combined, he noted.
In Northeastern Minnesota, 884 for-profit and non-profit groups and businesses were engaged in arts-related ventures, according to a 2012 Dun & Bradstreet analysis. St. Louis County, aided by its larger size and population, led the pack of seven counties with 615 employers and 2,067 employees. Itasca County, with 85 employers and 237 jobs, was second.
A similar analysis in Northwestern Wisconsin revealed 419 for-profit and non-profit groups and businesses were engaged in arts-related ventures. They supported 1,059 jobs. Barron and Douglas counties led a regional cluster. Barron’s 88 employers supported 222 positions. Douglas County’s 81 employers supported 172 employees. Statewide, non-profit arts groups generated $535 million in economic activity supporting 22,872 full-time equivalent jobs, found a 2012 study conducted by the Wisconsin Arts Board.
While creating jobs and commerce is a significant accomplishment, the stated mission of non-profit arts groups typically is to enhance regional understanding and culture.
“It’s all about serving our community,” said Minnesota Discovery Center CEO Lisa Vesel. For instance, the Discovery Center provides extensive information about the history of the Iron Range and its residents, including their geneology. It also sponsors live performances that illustrate Iron Range heritage.
Minnesota’s non-profit arts community received a substantial boost in 2008 when the Legacy Amendment was approved by voters. It increased the state’s sales tax by three-eighths of one percent, with 19.7 percent of those proceeds allocated to an arts/culture fund. During the 25-year life of the amendment, it’s estimated that $1.2 billion will be distributed to those groups. The infusion, DeArmond said, allowed the Arrowhead Regional Arts Council to vastly increase its grants distributions.
“When that money was first received in 2010, we went from giving out $175,000 to providing $490,000,” he said. The state is ranked Number 1 in per capita arts spending, according to the Cap Times in Madison.
Conversely, Wisconsin is ranked 47th. Like many other recipients of state money, the Wisconsin Arts Board lost a large chunk of funding when Gov. Scott Walker and legislators addressed the budget deficit in 2011. The state’s allocation was reduced from $2.4 million to $850,000 for the 2012-2013 biennial budget, although the board also receives funding from other sources, including the federal government.
“When you decrease the amount of money that flows from a state agency, you reduce the number of projects that are supported and the number that apply for grants, along with the amount of money that flow through to the private sector,” said George Tzougros, Wisconsin Arts Board executive director. He’s hopeful the support will return to former levels but explained “It all depends on the state’s economy. If it’s deemed to be good, it’s easier (for the state) to invest” in the arts.
He believes government should re-evaluate that policy.
“I would argue it’s better to invest when times aren’t good, because the arts are an economic driver,” Tzougros said.Previous BusinessNorth Exclusives Articles:
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