Topline:

Why it matters: Arts organizations are already hurting from federal government withdrawal of grants like the National Endowment for the Arts.

Why now: The clock is ticking to save the new Performing Arts Equitable Payroll Fund that would help arts groups pay employees. The deadline is June 15.

The backstory: AB5, a 2019 California law, compelled arts groups to pay freelancers as employees, which significantly raised costs. The fund was meant to reimburse those nonprofits.

Go deeper:
Gig companies wrote their own labor law.

Last Saturday, Gov. Gavin Newsom rocked out in Napa Valley and took a stand for the arts in California. “Make arts matter again,” he said.

But the statement left arts administrators in Southern California scratching their heads.

“It feels like the governor speaks the language of supporting the arts,” said Beatrice Casagrán, artistic director of Ophelia’s Jump, a theater in Upland in San Bernardino County. “His actions say something different.”

Casagrán is one of thousands of arts professionals in California watching whether Newsom will follow through on a proposal to zero-out $11.5 million already allocated to the Performing Arts Equitable Payroll Fund. The deadline for cuts to be final is June 15.

The fund was created to help smaller arts organizations pay people to put on shows and programs after a state law compelled groups to classify freelance workers as employees. It’s a reimbursement fund, so groups already spent the money and sought to be paid back. Groups say the disappearance of the funds means they’ll have to slash programs in the coming year.

“We are going to have to consider how programs in the next season may have to be curtailed in order to accommodate the fact that these reimbursements won’t come,” said Christopher Maikish, executive director of Celebration Theater in Hollywood. His theater is the longest running LGBTQIA+ theater organization in Southern California.

Celebration Theater declared expenses of about $350,000 in 2023, most of which went toward employee pay. The fund would have reimbursed $75,000, Maikish said.

As California lawmakers carry out final revisions to next year’s proposed $322 billion state budget, advocates wonder whether pro-arts Newsom or arts budget cutting Newsom is going to prevail.

It all goes back to the gig economy

California lawmakers passed AB5 in 2019 to protect workers in the gig economy. Large gig companies ended up with exemptions. But smaller nonprofit arts organizations did not. These groups often were volunteer led and paid artists through stipends.

“Now we’ve moved into a model of full employment and so our costs have basically tripled in the last five years,” Maikish said.

Arts advocates banded together to lobby for the creation of the Performing Arts Equitable Payroll Fund to help make up for the added costs.

“We estimate at least dozens of arts organizations are at risk of closing their doors permanently,” said  Ricky Abilez, director of policy and advocacy at Arts for LA.

And that’s not just because of Newsom’s proposed cut, he added. More than 500 nonprofits in L.A. County have lost a total of $28 million in active federal grants.

Abilez and others say they understand that California’s budget deficit means some groups will lose out in state funding. But California is already below average compared to other states’ arts funding. Restoring the fund, they say, will have ripple effects to local economies because people who attend shows and exhibits spend money on childcare, meals and parking, among other things.

Meanwhile, the clock is ticking. California legislators, including Newsom, will have to agree on state allocations and cuts before a June 15 deadline to pass a state budget.

Arts for LA has published a Take Action toolkit to help people who want to advocate to protect these and other funds for nonprofit arts groups.