Larimer arts advocates back tax district

A new taxing district for arts and science groups is something cultural aficionados in Larimer County have had their eyes on for years, and 2014 may be the year the district gets launched.

The effort comes as arts supporters search for ways to improve arts funding in the community. This summer and fall, the Community Foundation of Northern Colorado will begin gauging interest and spreading the word about the establishment of an arts endowment that will operate within the community foundation.

The endowment and a Scientific and Cultural Facilities District would work well together to boost arts funding, according to Ray Caraway, president of the Community Foundation.

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“I see the endowment and the SCFD as a multi-faceted approach to funding the arts,” Caraway said. The district also has the support of the Cultural Council of Estes Park, according to the organization’s executive director, Lynda Vogel.

A Scientific and Cultural Facilities District, or SCFD, is a special taxing district enabled by state legislation passed in 1987. These districts impose a sales tax of no more than 0.3 percent, or three cents on a $10 purchase, which is directed to the operating budgets of eligible scientific and cultural organizations within the district’s boundaries.

The creation of such a district could mean more than $5 million in additional funds to be distributed to qualifying organizations in Larimer County.

Only one district is allowed per county, so members of the Larimer County arts and culture community are coming together to begin the process, which started a few months ago with a presentation to the Loveland City Council. In addition to Loveland, representatives from Fort Collins, Berthoud and Estes Park have been involved in the discussions.

This is not the first time an SCFD has been considered, according to Loveland’s cultural facilities director, Susan Ison. Larimer County have attempted to get the SCFD onto the ballot twice before in 2008 and 2009, but ran into problems.

Because the districts impose a tax, they must be approved by voters, which means getting enough signatures on a petition to place it on a ballot. The ballot measure must state the name of the district, its boundaries, the duration and amount of the tax and criteria outlining the eligibility of organizations and distribution of the funds.

The first time organizers in Larimer County attempted creating an SCFD, the effort failed because the petition was not certified in time. The second time, large election costs kept city officials from turning a petition into a ballot item.

This time, Ison and others in Fort Collins, Berthoud and Estes Park are working to get the SCFD proposal onto the November 2014 ballot.

Only one other SCFD exists in Colorado, encompassing seven counties in the metro Denver area. The district was established in 1988, the year after the enabling legislation was passed.

In Denver, arts groups raised $750,000 for a marketing campaign promoting the SCFD ballot initiative, according to Jane Hansberry, one of the Denver SCFD’s first employees. The Denver Art Museum, Denver Zoo, Denver Botanic Gardens and Denver Museum of Nature and Science were among the entities that supported the initiative.

Today, these organizations, along with the Denver Center for the Performing Arts, are “Tier 1” organizations, and together receive 65.5 percent of the dollars distributed through the SCFD. In 2011, the metro Denver SCFD doled out $41.9 million to 310 organizations. Tier 1 organizations received about $27.4 million combined.

Smaller organizations received the rest of the funds, with Tier 2 facilities receiving 21 percent, or about $8.7 million of the total, in 2011. The smallest organizations, classified as Tier 3, received 13.5 percent, or about $5.6 million.

Organizations must meet eligibility criteria set forth by the district, and are separated into tiers based on factors such as the size of annual budget. The thresholds for the tiers are also set forth by the individual district, something that hasn’t been decided yet by Larimer County SCFD leaders, according to Bruce Freestone, co-founder of OpenStage Theater in Fort Collins and a longtime supporter of the local arts scene.

The Denver SCFD imposes a smaller tax than the maximum allowed by the legislation. The tax there is 0.1 percent, which adds up to about $14.55 per person annually in 2013, according to the City of Loveland.

If Larimer County were to authorize an SCFD, it would mean an additional $5 million from Fort Collins and Loveland alone to be distributed among eligible facilities, based on 2012 sales tax numbers.

Not everyone believes Larimer County needs a new tax. Fort Collins City Councilman Gerry Horak said the region should work to meet more of the basic needs of the region before embarking on new arts funding.

“In my opinion, the city and Larimer County have unmet needs for basic services, so an increase in current sales taxes should be addressing those needs and not just be directed for a single use for cultural organizations’ operations,” he said. “We need to be funding needs and not wants.”

In Denver, taxpayers have reauthorized the SCFD twice, voting to continue funding the district in 1994 and 2004. The district will be back up for consideration in 2016.

Larimer County groups still must answer several questions among themselves, such as guidelines for eligibility and distribution of funds, something that is likely to be determined by an advisory group, which has yet to be established.

When conversations about creating an SCFD first began in 2007, there was a list of 70 to 75 organizations that would receive money from the district in Fort Collins and Loveland, Freestone said, but a current list has not yet been compiled.

Including Estes Park and Berthoud would likely bump that number up, and new organizations have been created since 2007, including the Fort Collins Discovery Science Center, which opened in November.

Other establishments are in the works, including a performing arts center in downtown Estes Park.

Existing organizations that could benefit from the district include the Lincoln Center in Fort Collins, the Rocky Mountain Raptor Program and the Rocky Mountain Sustainable Living Association.

Funds from an SCFD cannot be used for construction projects, though, or anything other than costs of operation. However, money from an SCFD has the potential to free up capital for use in other areas, according to Freestone.

In 2007, the establishment of an SCFD would have meant a 25 percent to 35 percent increase in the budget for OpenStage, Freestone said. While the extra money is legally required to go to operating costs, the infusion of cash could have enabled the company to hire more staff, thus creating more capacity for shows and programs, Freestone said.

Cultural facilities have to be committed to reaching new heights if they want to receive the benefit of an SCFD, according to Freestone.

Voters won’t want to approve a new tax that simply maintains the status quo, he said.

“Taxpayers want to fund something above and beyond,” Freestone said. “They’re going to want more programs, better programs that run longer.”

More than 3,000 creative-sector jobs exist in Fort Collins and Loveland combined, and the arts community generates millions of dollars in economic activity.

A report from Americans for the Arts shows that in 2010, arts and culture had a $19.1 million economic impact in Fort Collins, up from $15.9 million in 2007. No Loveland data was available from Americans for the Arts, but data from the City of Loveland show that the average annual salary of a creative sector employee was $42,000 in 2010, higher than the average annual salary in Loveland of $37,000.