August 8, 2012
By PATRICIA COHEN
Paul Sancya/Associated Press
Property taxes are now part of the museum’s revenue.
The Detroit Institute of Arts was saved from devastating budget cuts Tuesday night after voters in three Michigan counties agreed to institute a property tax increase earmarked specifically for the museum.
The levy — known as a millage tax — is expected to raise $23 million a year and put the arts institute on secure financial footing for the first time in two decades. In exchange residents of the contributing counties — Wayne (which includes Detroit) and its suburban neighbors Macomb and Oakland — will receive free museum admission. The new funds will also support extra programming for older visitors and students, and expand operating hours.
“We are thrilled,” said Graham W. J. Beal, the institute’s director, who gathered with supporters at the museum Tuesday night to await the count and then celebrate the proposal’s passage.
The institute now becomes one of a handful of American museums, including the Minneapolis Institute of Arts and the St. Louis Art Museum, that rely on property taxes for a portion of their revenues. But Detroit’s is unusual among major urban museums because it does not have a large endowment and receives no financial support from either the city or the state.
As a result the museum’s leaders felt they had to ask taxpayers if they would be willing to pay to support its mission. Though they answered yes, Christine Anagnos, executive director of the Association of Art Museum Directors, said Tuesday night’s vote does not presage broader change. “I think Detroit is a special situation,” she said, referring to the complete withdrawal of government funds. “I don’t think this is a trend.”
The institute’s holdings range from ancient Egyptian, Greek and Roman artifacts to contemporary American masterpieces. But starting two decades ago both Michigan and the city of Detroit began withdrawing their financial support, and neither money drawn from the institution’s endowment or operating revenues could keep pace. Admissions and food and merchandise sales generate about $3.5 million a year, or just 15 percent of the annual budget.
Last month The Detroit Free Press noted that all of the city’s cultural institutions have traditionally been underendowed and suggested that was possibly a side effect of the “new-model mentality of the auto industry,” which encouraged yearly rather than long-term donations.
The institute underwent a major renovation in 2007 only to experience a severe round of cutbacks two years later, when it reduced its operating budget from $34 million to $25.4 million and eliminated more than 60 full- and part-time positions, or nearly 20 percent of its work force.
The millage tax takes advantage of the fact that the vast majority of the institute’s 400,000 yearly visitors — 79 percent — live in one of the three counties. The 0.2-mill tax will last for 10 years and will cost each homeowner approximately $15 a year for every $150,000 of a home’s fair market value, according to a fact sheet put out by the arts institute. A designated tax to support the Detroit Zoo was approved by county voters in 2008.
Kaywin Feldman, the director of the Minneapolis Institute of Arts, which receives 42 percent of its budget from a similar property tax in Hennepin County, said the millage “has been a part of the story of the success of the museum all along.”
In St. Louis the Metropolitan Zoological Park and Museum District supports five institutions. “This is a firm commitment from taxpayers, and is much more stable,” said J. Patrick Dougherty, the district’s executive director. He said the millage tax there has escaped the sort of anti-tax opposition found elsewhere.
Over the next decade the Detroit Institute of Arts will focus on building its $98 million endowment to $400 million, a goal museum officials concede is ambitious, particularly given the uncertain state of the economy.
The museum, which raised $2.5 million to campaign for the tax, emphasized the economic benefits, noting that the institute spent more than $7 million on goods and services in Wayne, Oakland and Macomb Counties last year.
The city technically owns the institute’s Beaux-Arts building and more than 60,000-piece collection, which includes Diego Rivera’s monumental frescoes, and works by Andy Warhol, Alexander Calder, Rembrandt, Rubens, Monet, Cezanne, van Gogh, Munch and more. In handouts museum officials noted that selling art to support operating costs violates accepted museum practices. The city is also prohibited from selling any part of the collection.
Pam Marcil, the institute’s director of public relations, said the museum expects to see proceeds from the new tax in January.
On Wednesday morning Mr. Beal said that the museum was immediately fulfilling its pledge to offer county residents free entry. He invited them over to see the museum’s current exhibition of works by Picasso and Matisse, and glimpse a rare Vermeer, “Woman Holding a Balance,” on loan from the National Gallery of Art in Washington.