Ohio Arts Council Announcement to FY 2020 Grantees

On May 5, Governor Mike DeWine announced reductions of $775 million to the state budget for the remainder of fiscal year 2020 (i.e., FY 2020, May and June). The reductions result from an abrupt state tax revenue shortfall, caused by the negative economic impact of the coronavirus (COVID-19) on Ohio’s economy.

OAC ACTIONS TO DATE

Early into the COVID-19 pandemic, the Ohio Arts Council (OAC) proactively issued nearly $4 million in automatic partial payments equal to one-half of grant amounts to nearly all FY 2020 grantees. For many Ohio arts organizations, artists, educators, and others, this helped in part to alleviate immediate cash flow issues, provide some level of economic relief, and expedite agency grants – before any budget reductions took hold.

In late March, after the OAC had executed its partial payment policy, the Governor asked all state agency directors to find significant savings in their budgets. Once this request was announced, as in past economic downturns, the OAC expected it could be asked to share in the sacrifice to be made across state government, even as many artists and arts nonprofits had already sacrificed greatly in order to protect public health, prevent unnecessary deaths, and limit the spread of COVID-19.

FY 2020 SUSTAINABILITY GRANT REDUCTIONS

Ultimately, the state budget office has now asked the OAC to bear a reduction of nearly $1.35 million. Fortunately, the agency will be able to absorb a portion – but not all – of this reduction without impacting FY 2020 grantees. Through careful fiscal management, the OAC can lessen the impact on grantees by approximately $595,000, or 44%, thereby mitigating some of the harm of reducing public funding for the arts during this uniquely challenging time for arts organizations.

To bear the remainder of the reduction, however, the OAC must reduce its FY 2020 grant budget by $753,814. To implement the reduction, FY 2020 Sustainability (i.e., operating support) grants will be reduced by 6.6%. As context, had the agency not absorbed $595,000 of the total $1.313 million reduction, the equivalent reduction would have been 11.4%. As difficult as this news is to share with you, it is important to keep this reduction in broader perspective as well. As part of the $775 million in state budget reductions, public education will be reduced by $465 million (combining primary, secondary, and higher education); health care spending through Medicaid will be reduced by $210 million; and all state agencies will share the final $100 million reduction.

As part of its reductions, the OAC has implemented and will continue administrative cost savings measures. We have put in place a freeze on hiring, new contracts, and employee travel. We have restricted administrative expenditures to essential goods and services only. Lastly, like many grantees, we have postponed events and temporarily shuttered our physical space, the OAC’s Riffe Gallery, while promoting the gallery and agency’s virtual presence.

Our staff will work to revise grant agreements quickly in coming days. Once revised agreements are available you’ll be notified via email, and all Sustainability grantees will be eligible to submit them along with early Final Reports for immediate processing, thereby speeding all final payments to the field well ahead of their June 30, 2020 end dates. For all non-Sustainability grant programs, our staff will continue to process and accept Final Reports and make payments as quickly as possible. For all programs, the agency continues to remain as flexible as possible regarding event changes brought about by the pandemic, with the goal of honoring the valuable work done by grantees and only entertaining grant cancellations as a measure of last resort. For detail on this approach to FY 2020 Final Reports, please click here.

APPROACH TO FY 2021 SUSTAINABILITY GRANTS

Governor DeWine has elected not to use the state’s “rainy-day fund” to offset FY 2020 reductions. In doing so, the Governor explained, “I know that I have said that 'it’s raining,' but we do not want to tap into the rainy-day fund yet….The ‘rain’ is not a passing spring shower – it could be a long, cold, lingering storm, and we should not use the fund until it is necessary.” He further added that usage of the rainy-day fund is likely in FY 2021, as part of a desire to provide a level of stability and predictability to state finances despite the downturn. At this juncture, reductions to the OAC’s FY 2021 grant budget are possible, although the agency will make every effort to help grantees weather the storm.

In line with the Governor’s approach, the OAC will apply its approximately $500,000 in federal CARES Act funding entirely to FY 2021 Sustainability grants. This approach will help in several ways. First, it will mitigate future FY 2021 state-level reductions that could outpace the CARES Act support. Second, as the OAC plans for FY 2021 and revises its grant budget, it will allow us to take a holistic view of our total grants budget and free up state dollars for other grant program areas. Third, it will allow time to seek necessary approvals required by state law to expend the federal funds. Finally, and most importantly for Sustainability grantees, it will help to smooth any grant reductions over two fiscal years, keeping Sustainability funding more reliable, rather than having grantees endure a small reduction this year followed by a much steeper reduction next year. As in past financial downturns, rest assured that the OAC’s commitment to maintaining funding for its operating support grantees remains its top grantmaking priority.

Thank you for all you have done, all you are doing, and all you will do to battle through the COVID-19 pandemic. We are in this fight alongside you, and we will emerge stronger together on the other side.

Stay safe, be well,

Donna S. Collins

Executive Director