[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
THE POWER, PERIL, AND PROMISE OF THE
CREATIVE ECONOMY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JANUARY 19, 2022
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-043
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
46-711 PDF WASHINGTON : 2022
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Dean Phillips............................................... 1
Hon. Blaine Luetkemeyer.......................................... 3
WITNESSES
Mr. Carson Elrod, Co-Founder & Co-Leader, Be An #ArtsHero,
Director of Government Affairs, Arts Workers United, Brooklyn,
NY............................................................. 5
Ms. Nataki Garrett, Artistic Director, Oregon Shakespeare
Festival, Ashland, OR.......................................... 7
Ms. Sandra Karas, Secretary-Treasurer, Actors' Equity
Association, New York, NY...................................... 9
Ms. Raeanne Presley, Co-Owner, Presleys' Country Jubilee
(Presleys' Theater), Branson, MO, testifying on behalf of the
National Independent Venue Association (NIVA), Plains Chapter,
in her role as Secretary....................................... 10
APPENDIX
Prepared Statements:
Mr. Carson Elrod, Co-Founder & Co-Leader, Be An #ArtsHero,
Director of Government Affairs, Arts Workers United,
Brooklyn, NY............................................... 37
Ms. Nataki Garrett, Artistic Director, Oregon Shakespeare
Festival, Ashland, OR...................................... 57
Ms. Sandra Karas, Secretary-Treasurer, Actors' Equity
Association, New York, NY.................................. 60
Ms. Raeanne Presley, Co-Owner, Presleys' Country Jubilee
(Presleys' Theater), Branson, MO, testifying on behalf of
the National Independent Venue Association (NIVA), Plains
Chapter, in her role as Secretary.......................... 63
Questions and Answers for the Record:
Questions from Hon. Troy Carter and Answers from Mr. Carson
Elrod...................................................... 68
Question from Hon. Troy Carter and Answers from Ms. Sandra
Karas...................................................... 77
Additional Material for the Record:
Ann Marie Miller Letter...................................... 78
Bean Gilsdorf Letter......................................... 80
Brian McClean Letter......................................... 81
Brian Marquis Letter......................................... 82
Christin Crampton Day Letter................................. 83
Craig Coogan Letter.......................................... 85
Damon Grant Letter........................................... 86
David HB Drake Letter........................................ 88
Deborah Stewart Letter....................................... 90
DPE AFL-CIO AEMI DEI Policy Agenda........................... 91
DPE - Department for Professional Employees, AFL-CIO Letter.. 93
Emma Goidel Letter........................................... 96
Emmi S. Herman Letter........................................ 98
Gabe Long Letter............................................. 99
Gwenn Seemel Letter.......................................... 100
Hattie Schapiro Letter....................................... 101
J. Murphy Letter............................................. 102
Jacob Harvey Letter.......................................... 103
Jacqueline K. Dace Letter.................................... 104
Janet Mullet Letter.......................................... 105
Jay Dunn Letter.............................................. 106
Jayeesha Dutta Letter........................................ 107
Jorge Delara Letter.......................................... 108
Joshua T. Bennett Letter..................................... 114
Kate Robin Letter............................................ 115
Kerri Wood Einertson Statement............................... 117
Lily Kephart Letter.......................................... 121
Lora Bottinelli Letter....................................... 122
Mara Jill Herman Letter...................................... 124
Rachael Viscidy Letter....................................... 125
San Francisco Mayor London N. Breed, Chicago Mayor Lori E.
Lightfoot and Philadelphia Mayor Jim Kenney Statement...... 126
Sarah Schulz Letter.......................................... 129
Susan Parks Letter........................................... 130
Vella Lovell Letter.......................................... 131
William Baxter Letter........................................ 133
Winnie Holzman Letter........................................ 134
Abigail Engstrand Letter..................................... 135
Alex! Jimenez Letter......................................... 137
Alice Klugherz aka wonderland/wizehart Letter................ 138
Amanda Andrews Letter........................................ 140
Americans for the Arts....................................... 141
Andy Gaines Letter........................................... 159
Aria McKenna Letter.......................................... 160
Arts Alliance Illinois....................................... 161
Arts in a Changing America................................... 162
Arts Management.............................................. 164
Arts of the Bering Strait Region............................. 166
Arts Workers United.......................................... 186
Authors Guild................................................ 282
Beth Jucovy Letter........................................... 291
Blue Star Contemporary....................................... 292
Brooke Smiley Letter......................................... 294
Byron Lenair Letter.......................................... 295
Carnegie Hall Corporation.................................... 296
Craft Emergency Relief Fund.................................. 300
CONTRA-TIEMPO................................................ 306
Dance/NYC.................................................... 307
Dance/USA.................................................... 316
Denise G. Johnson Letter..................................... 319
Denver Arts & Venues......................................... 320
Dia Scott Letter............................................. 321
Elizabeth Miller Letter...................................... 322
Eric Ragan Letter............................................ 323
Georgia Kung Letter.......................................... 325
Georgy Rock - Story Lady Letter.............................. 326
Get Creative Workers Working Coalition....................... 327
Jack Becker Letter........................................... 413
Jeanie Bergen Letter......................................... 414
Jessica Snow Letter.......................................... 415
John Kristiansen New York, Inc. Letter....................... 416
Kady Yellow Letter........................................... 420
Winifred Helton-Harmon Letter................................ 422
Krys Holmes Letter........................................... 423
League of American Orchestras................................ 424
League of Wisconsin Municipalities........................... 428
Lesley Currier Letter........................................ 429
Lexie Peveto Letter.......................................... 430
Linda Storm Letter........................................... 438
Lucy Yeghiazaryan Letter..................................... 439
Mallory Portnoy Letter....................................... 440
Massachusetts International Festival of the Arts............. 441
Michael Grasso Letter........................................ 443
New Yorkers for Culture & Arts............................... 444
Nicolette McDermott-Ketchum Letter........................... 449
OPERA America................................................ 451
Pam Breaux Letter............................................ 454
Potri Ranka Manis Letter..................................... 457
Rachel Austin Letter......................................... 459
Ragan Rhodes Letter.......................................... 460
Recording Academy............................................ 462
Robin Bronk Letter........................................... 466
Society of Composers & Lyricists............................. 468
Sophie Peyton Letter......................................... 471
Steven Kidd Letter........................................... 472
Taurie Kinoshita Letter...................................... 475
Texas Folklife............................................... 476
Texans for the Arts.......................................... 478
Thea Martinez Letter......................................... 480
Theatre Communications Group................................. 481
West Baltimore Re-Imagining and Redevelopment Project........ 485
WESTAF and the Western Arts Advocacy Network................. 489
Wise Fool New Mexico......................................... 492
THE POWER, PERIL, AND PROMISE OF THE CREATIVE ECONOMY
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WEDNESDAY, JANUARY 19, 2022
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building and via Zoom, Hon. Dean
Phillips [member of the Committee] presiding.
Present: Representatives Phillips, Golden, Mfume, Delgado,
Craig, Davids, Newman, Bourdeaux, Chu, Evans, Houlahan, Kim of
New Jersey, Luetkemeyer, Williams, Stauber, Meuser, Tenney,
Garbarino, Young Kim of California, Van Duyne, and Fitzgerald.
Mr. PHILLIPS. Good morning. I call this hearing to order.
Without objection, the Chair is authorized to declare a
recess at any time.
And I would like to begin as we always do now to note some
important requirements. Let me begin by saying that standing
House and Committee rules and practice will continue to apply
during remote proceedings. House regulations require the
Members to be visible through a video connection throughout the
proceeding, so please keep your cameras on and remain muted
until you are recognized to minimize background noise.
In the event a Member encounters technical issues that
prevent him or her from being recognized for their questioning,
I will move to the next available Member of the same party and
I will recognize that Member at the next appropriate time slot
provided they have returned to the proceeding. Should a
Member's time be interrupted by technical issues, I will
recognize that Member at the next appropriate slot for the
remainder of their time once their issues have been resolved.
In the event of technical issues, I may need to recess the
proceedings to address them.
And with that, let's turn to today's business.
I want to thank all of our witnesses for being here today.
It is a pleasure to have such a talented and accomplished group
of witnesses representing the arts sector. As you can see, I am
sitting in for Chairwoman Velazquez, who was unable to Chair
this hearing today.
The arts sector, an important sector, employs nearly 5.2
million Americans and contributes $919 billion to our national
economy. In my congressional district, the influence of the
creative economy is all over the place. Writers, photographers,
musicians, and designers launch small businesses, employ
workers, and help Minnesota make it great through their art.
But the impact of the arts economy is not confined to
America's largest cities. It is evident in every part of the
country. America's 675,000 art-centered businesses are present
in every congressional district throughout the nation.
Unfortunately, the pandemic has touched nearly every business
in the arts economy.
Creative businesses and workers usually rely on in-person
gatherings and live events to sustain their enterprises.
However, as the virus spread throughout the country, lead
Americans to stay home and socially distance. Ninety-nine
percent of entertainment productions canceled events throughout
the pandemic so far, resulting in a loss of $557 million in
ticketed admissions alone. At the height of the pandemic, 63
percent of creative workers experienced unemployment and 95
percent lost creative income.
The live events industry is a crucial component of the
creative economy that has struggled greatly throughout the
pandemic. This industry comprises not only theatres and music
venues, but also musicians and performers and those that
support live events such as planners, caterers, designers, and
so much more. These workers and small businesses have seen
precipitous declines in revenue due to the ongoing COVID-19
pandemic and related public health concerns, with countless
events and gatherings being canceled or delayed for now the
third year in a row.
To help mitigate the impact of the pandemic on this
industry, Congress created the Shuttered Venue Operators Grant
program, known as SVOG, as many have come to know it. To date,
the program has delivered over $13 billion in grants to
struggling venues throughout the country. This funding has
helped many businesses, including several in my district, avoid
permanent closure.
However, SVOG was not accessible to the many independent
contractors and small business owners that comprise the broader
live events industry, leaving them totally out in the cold.
Last August, I held a listening session with business owners in
the live events industry in Minnesota and heard heartbreaking
stories of dreams delayed and hardships faced. And 5 months
later, Congress has yet to take action.
It is crucial that we pass additional small business
targeted relief to help those small businesses most impacted by
the growing ongoing pandemic, including those in the live
events industry itself. These funds would help business owners
keep their doors open and workers employed, and it would help
strengthen our economic recovery as well with the understanding
that arts and culture are the second-highest sector for value
added per dollar in the United States' economy.
It is important to note as well, the benefits of the arts
go well beyond economic. They have a substantial impact on our
country's social, civic, and cultural well-being. Alongside
preserving and celebrating culture, research shows that as
creative and artistic enterprises arise, ancillary businesses
are more likely to form around them, creating jobs and
stimulating local economies.
But the wounds the pandemic inflicted on the arts economy
are deep and painful and potentially long lasting. If we want
the industry to return to pre-COVID trends and continue to be
an economic engine for local communities, these businesses need
more support and investment. Investing in the creative economy
will help this crucial sector recover while also fueling
overall economic growth for the United States.
So today, I hope this hearing allows us to examine the
challenges that those operating in the creative economy
continue to face. I also look forward to discussing policies
that can help support this important sector to all of us.
With that, I would like to yield to the Ranking Member, Mr.
Luetkemeyer, for his opening statement.
Mr. LUETKEMEYER. Thank you, Mr. Chairman. And I appreciate
you filling in for the Chairwoman this morning.
As COVID-19 continues to disrupt daily lives, we have seen
Americans double down on their cultural and creative
consumption to regain a sense of normalcy. In addition to the
creative arts ability to provide individuals with comfort, joy,
and even hope during the challenging times, the arts can also
ignite economic growth and recovery after hardship strikes.
Creative organizations and enterprises are revenue and job
generators not only within their immediate sphere but also act
as a catalyst, stimulating economic activity in adjacent
sectors such as tourism, hospitality, transportation,
restaurants, and many others. Culture and the arts are not
confined only to metropolitan areas. In fact, rural and
heartland communities also have their own significant
reservoirs of homegrown creative assets that can be mobilized
for social, cultural, and economic good.
Nationwide, the creative economy generated an impressive
4.3 percent of our nation's gross domestic product, or $919.7
billion in 2019. The creative arts employed nearly 5.2 million
workers prior to the pandemic, accounting for nearly 3.3
percent of the United States' workforce.
Unfortunately, this industry has not been immune to the
COVID-19 crisis. During the worst of the pandemic, nearly all
entertainment events were canceled creating significant
financial losses across the board of businesses themselves,
local governments, and adjacent businesses reliant on their
success.
At the same time, employment in this sector plunged, and
while there has been some increase, workers in the creative
arts sphere remain among some of the most heavily affected with
11 percent more unemployment rates than compared to pre-
pandemic levels.
2021 ushered in a tentative rebound in the creative sector
over the past year. However, there are several major stressors
threatening to reverse this fragile recovery. The Omicron
variant of the corona-virus threatens to usher in a new wave of
closures and restrictions devastating to arts industries
reliant on human interaction. The meteoric rise in inflation is
manifesting in higher supply costs, threatening businesses
whose financial cap is already severely strained for weathering
a 2-year pandemic, wage hikes, and rents locking in at higher
prices. Unlike large businesses who may have deeper financial
reserves, small businesses are often financed by owners'
personal savings placing them in grave personal financial risk
during periods of high inflation.
Increased inflation means less buying power which in turn
translates to a decreased ability to hire and retain qualified
employees. Unfortunately, with last week's Consumer Price Index
reading of 7 percent and the wholesale inflation rising to 9.7
percent year over year, a challenging economic environment for
small business will continue. Unlike other industries who may
be able to take advantage of automation and technology to
replace people, the creative arts rely deeply on human skill
and ingenuity.
As a sitting Member of Congress and Ranking Member of this
Committee, it is my distinct honor and privilege to welcome our
witnesses today. I would like to thank all of you for
participation. I look forward to your conversation.
Mr. Chairman, with that I yield back.
Mr. PHILLIPS. Thank you, Mr. Luetkemeyer.
And now I would like to take a moment to explain how the
hearing will proceed. Each witness will have 5 minutes to
provide a statement and each Committee Member will have 5
minutes for questioning. Please ensure that your microphone is
on when you begin speaking and that you please return to mute
when you are finished.
With that, I would like to introduce our witness for the
day.
Our first witness Mr. Carson Elrod. Mr. Elrod has been a
fierce activist in the creative sector, most notably as a
cofounder and coleader and director of Government Affairs for
Arts Workers United, Be An #ArtsHero. Arts Workers United is an
arts advocacy organization dedicated to establishing the arts
and culture sector of the United States by means of support,
investment, and representation. When he is not championing for
arts and culture workers, Mr. Elrod is a professional actor who
has appeared in live theater, motion pictures, on Broadway, and
much more.
We welcome you, Mr. Elrod.
Our second witness is Ms. Nataki Garrett. A change maker
and trailblazer, Ms. Garrett is a nationally recognized
director and the sixth artistic director of the Oregon
Shakespeare Festival (OSF). The first woman to artistically
lead a $44 million theater company and OSF's first Black female
in the role. Prior to her role at OSF, she served as our acting
artistic director at the Denver Center Theater Company, as well
as associate dean and the co-head of the Undergraduate Acting
Program at the CalArts School of Theater. We welcome you, Ms.
Garrett.
Our third witness is Ms. Sandra Karas. Ms. Karas has
married her passion of arts and advocacy, serving as the
secretary Treasurer of Actors' Equity Association, a union of
professional stage actors and stage managers in the United
States. She is a licensed tax and finance attorney and serves
as the director of the New York City Volunteer Income tax
assistance program, sits on the Board of Directors of the New
York Local of Screen Actors Guild, American Federation of
television and radio artists, and is even an actor herself.
We welcome you, Ms. Karas.
And now I would like to yield to the Ranking Member, Mr.
Luetkemeyer, to introduce our final witness.
Mr. LUETKEMEYER. Thank you, Mr. Chairman.
Our next witness is Ms. Reanne Presley. She is a co-owner
of Presleys' Country Jubilee Theater and Branson Visitor TV.
Presleys' Theater is a multi-generational, family-owned
business and was the original live music theater in Branson,
Missouri, Hosting its first show on June 30, 1967. In addition
to being a small business owner, Ms. Presley is a devoted
community leader. She became the first woman elected Mayor of
Branson in 2007 and went on to serve 4 terms. She has
previously served as branch of City Council, all of them for 10
years. Prior to her government service, Ms. Presley was Chair
of the Missouri Tourism Commission and served in leadership
positions on several community boards, including as Chair of
the board of directors at Skaggs Community Hospital and Board
of Directors of the Springfield and Branson National Airport,
and the Branson Lakes Area Chamber of Commerce. Due to her hard
work and exemplary leadership skills, Ms. Presley was honored
as the recipient of the Missourian award in 2009. In addition
to her sending her own views as a small business owner, Ms.
Presley is here representing a National Independent Venues
Association (NIVA), formed in mid-April of 2020 in response to
the ill effects of the COVID-pandemic. NIVA Members include
many small, independent venues, promoters, and festivals across
the entire nation.
Ms. Presley, it is a pleasure having you testify before
this committee. I look forward to your valuable insights I know
you will provide today. It is good to see you again. Ms.
Presley and I, just for clarification purposes, worked together
when I was the Division of Tourism Director in the State of
Missouri and she was the leader in the Brandon area for all of
the different tourism activities and venues there. So it is
great to see you again, Reanne and welcome to the Committee.
With that, Mr. Chairman, I yield back.
Mr. PHILLIPS. We are going to expect you to sing a song,
Mr. Ranking Member.
Mr. LUETKEMEYER. Well, that is a good way to have us send
everybody off.
Mr. PHILLIPS. For short hearings. Anyway, thank you, sir.
Thank you to all our witnesses for being here today.
And with that, I now recognize Mr. Elrod for your opening
statement for 5 minutes.
STATEMENTS OF CARSON ELROD, CO-FOUNDER & CO-LEADER, BE AN
#ARTSHERO, DIRECTOR OF GOVERNMENT AFFAIRS, ARTS WORKERS UNITED;
NATAKI GARRETT, ARTISTIC DIRECTOR, OREGON SHAKESPEARE FESTIVAL;
SANDRA KARAS, SECRETARY-TREASURER, ACTORS' EQUITY ASSOCIATION;
RAEANNE PRESLEY, CO-OWNER, PRESLEYS' COUNTRY JUBILEE (PRESLEYS'
THEATER)
STATEMENT OF CARSON ELROD
Mr. ELROD. Thank you, sir. Chairman Phillips, Ranking
Member Luetkemeyer, esteemed Members of the Small Business
Committee, thank you so much for your invitation to join
today's groundbreaking hearing.
I am an arts worker. I am a professional actor and one of
the 5.2 million Americans that animate our creative economy.
Arts workers like me support over 673,000 businesses, many of
them small, that add $919 billion in value to our nation's
economy. That is five times more than agriculture and nearly
$300 billion more than all of transportation.
We are big business because we are local business, from
Kansas to Kentucky and Alaska to Alabama. Every state in the
union is home to tens of thousands of arts workers whose labor
contributes more than a billion dollars to each state's GSP.
Our arts institutions are like stars that anchor a dynamic
solar system of ancillary businesses. You build a theater or a
museum and you can watch hotels, restaurants, and other small
businesses grow up around them. The socioeconomic light of our
creative businesses strengthens communities and stimulates
their economies.
Our nation's creative economy is in peril. In January of
2020, I had just been cast in a role in a television show that
promised to be a gamechanger for me both professionally and
financially. On March 13, 2020, that job evaporated and I
joined 2.7 million of my fellow arts workers for 15 months of
total unemployment. During this time, I joined Brooke
Ishibashi, Jenny Grace Makholm, and Matthew-Lee Erlbach in
starting Be An #ArtsHero and Arts Workers United to
relentlessly campaign for federal relief, recovery, and a
hearing just like this one.
I was grateful to Congress for the Federal Pandemic
Unemployment Compensation program, but even as the pandemic
persists, that pandemic relief, like my jobs, has evaporated.
And without union work, I lost my union health insurance. For
the first time in my life I am on Medicaid. My last show got
canceled because I, with my cast, caught COVID. I had an
upcoming show this spring. It has been canceled because of
COVID.
My story is not unique. While I had some savings and the
privilege to dedicate my life to this advocacy, so many,
especially in the BIPOC, LGBTQ+ and disabled communities have
been disproportionately impacted by this pandemic and they do
not have it as good as I do. And I think I have it pretty bad.
I am still haunted by a conversation I had with Patsy
Bouressa from the SIMS Foundation in Austin, Texas. They
provide mental health services for music workers. In just 1
month, four of their clients became so hopeless that they
killed themselves. We cannot let the human infrastructure of
our creative economy vanish into other industries or worse. The
loss to our families, our culture, our communities, and future
generations and the economy would be incalculable.
Arts workers should be the backbone of our post-COVID
recovery. The creative economy is a jobs multiplier with a
normal growth rate of 4.45 percent. That is nearly double that
of the rest of the economy. And the human need to gather, to
find community, to share cultural experiences will be enormous
after this pandemic. Congress can translate that need into
strategic investments that will jumpstart the American recovery
built on imagination, innovation, creativity, and community. To
accomplish this, I recommend that:
Congress commission a GAO report to fully explore what
Congress can and should do to stabilize and stimulate the
creative economy.
Ensure that unemployed American arts workers retain
unemployment benefits so that arts workers can stay arts
workers.
Immediately pass the Performing Arts Tax Parity Act, the
Create the Place, that HITS Arts, the Arts Education for All
Act, the Creative Economy Revitalization Act, and the 21st
Century Federal Writers Project.
Finally, Congress should work with the president to create
a secretary of Arts and Culture.
You have the opportunity to ignite not just a sunrise but a
supernova of creative small businesses, triggering a chain
reaction of such socioeconomic prosperity that history will
remember this Congress as the Congress that provided the rocket
fuel needed to launch us into the new American century defined
by the incredible specialized labor of American arts workers
and the 21st Century American Creative Economy that they drive.
Thank you so much.
Mr. PHILLIPS. Thank you, Mr. Elrod.
And now I would like to recognize Ms. Garrett for 5 minutes
for your opening statement. Ms. Garrett?
STATEMENT OF NATAKI GARRETT
Ms. GARRETT. Thank you very much for recognizing me,
Chairwoman Velazquez, Representative Phillips, Ranking Member
Luetkemeyer, and the Members of the Committee. I want to thank
you for inviting me to appear before you today.
I am the artistic director of the Oregon Shakespeare
Festival, otherwise known as OSF. I am honored to be with you
and share how COVID-19 has affected the arts sector,
specifically OSF, to highlight our economic and social impact
and to offer ways Congress can support the recovery of the
creative economy.
Founded in 1935, OSF is a Member of the National Theater
Communication Groups and the Performing Arts Alliance. Prior to
the pandemic we were a $44 million flagship nonprofit theater
and one of the largest economic drivers of the southern rural
Oregon economy. In a typical year, we welcomed over 400,000
people from all over the world to the town of Ashland, Oregon,
a town of 20,000 people that has the same density of
restaurants and hotels per resident as New York and Paris. OSF
generates more than a quarter billion dollars of economic
activity in the region annually, and we are responsible for a
full 20 percent of its economic activity overall. Simply put,
the arts are a powerful economic engine that drives our region.
In March of 2020, we had just opened our season, my first
as artistic director. Within 6 days of opening, COVID forced us
to shut it all down. We had already spent about $20 million to
get the shows ready for the stage and patrons had paid more
than $6 million for tickets that had to now be refunded. And
over the next few weeks, 90 percent of OSF's nearly 500
employees, including actors, crewmembers, carpenters, box
office staff, craft artisans were laid off. Eight hundred
twenty-nine performances of our 11 scheduled productions were
shuttered and 2,300 community engagement and education events
were canceled. Within a month, we laid off 500. That 500 led to
5,000 in our town and 20,000 across the region.
In September of the same year, the Alameda fire struck
through the region and destroyed more than 2,000 homes and
businesses, including the homes of some of the remaining OSF
employees. We set up a food bank, provided emergency housing,
and dedicated a significant part of our annual gala to the
relief effort.
I am haunted by the choices I had to make to keep OSF
afloat. But it is even more difficult for the culturally-
specific and smaller venue or community-based arts
organizations and their arts workers. Their work has a huge
impact on the creative economy and often goes under resourced.
I think about the hundreds of thousands of artists around this
country who drive so much of our economy but themselves live in
poverty. How can we continue viewing an industry that makes up
more of our GDP than agriculture and mining combined as a
luxury or a purview of the elite? How do we look millions of
arts and cultural workers in this country in the eye and not
take simple, common sense steps to simultaneously make their
lives and our economy more secure and robust? How can we
continue cutting arts programs in schools when we know that
students who participate in arts education are more likely to
go to college and less likely to go to jail? The reality is
that the infusion of federal dollars, along with the generosity
of our donors and patrons, without that it is likely that I
would not be here today because OSF would not be here today. I
am very thankful for the assistance this Committee provided
through the Shuttered Venue Operators Grant program, formerly
known as SOS and other forms of COVID relief.
At OSF, we have a tradition. Following the curtain call of
our last outdoor play each season, every person in the company
carries a candle and silently enters a darkened theater to the
strains of Greensleeves. A veteran company Members speaks
Prospero's speech from act IV Scene 1 of The Tempest. It is
like a prayer. ``Our revels now have ended . . . '' It is a
promise, 1,200 audience Members from all walks of life hang on
every line. The candles are extinguished and the company
silently and reverently exits the theater. It marks the ending
of a season of hard work and beautiful art making and the
promise that the house lights will be rekindled once more.
In 2020, I was afraid that those candles had gone out
forever. But I am here to tell you that we will make sure that
the creative economy endures. As an artistic director, I am
committed to ensuring that those candles burn bright and those
words are spoken for years to come.
The power you hold, you can assure the flickering candle of
the creative economy can continue to burn bright. Right now,
bills such as the Creative Economy Revitalization Act and the
Performing Arts Parity Act and the Arts for Education for All
Act, bipartisan bills that positively impact the economies of
every state and enjoy broad public support, are waiting for
Congress to act. It is not a radical act, nor is it
controversial. It is recognizing a simple fact that the arts
and the artists drive local economies and at the same time lift
people out of darkness.
I thank you for this time and thank you for what you will
do next. And I look forward to your questions. Thank you very
much.
Mr. PHILLIPS. Thank you so much, Ms. Garrett.
And now I would like to recognize Ms. Karas for 5 minutes
for your opening statement. Ms. Karas?
STATEMENT OF SANDRA KARAS
Ms. KARAS. Chairman Phillips, Ranking Member Luetkemeyer,
thank you for the invitation today. I am Sandra Karas, an
actor, Secretary-Treasurer of Actors' Equity Association, and a
Member of SAG-AFTRA's New York local board. I also appear
before you as a small business owner. I am a tax attorney,
accountant, and financial advisor with a practice here in New
York. You are going to hear today about the power of the
creative economy, and the live arts in particular, rightly so.
The arts and culture sector is responsible for 5.2 million jobs
and 4.3 percent of the GDP. The live arts have a huge halo
effect on small business, many of which would not exist without
the arts. Patrons spend on restaurants, parking, taxis, hotels,
childcare. Nationally, that amounts to more than $100 billion
in additional spending.
The creative economy drives revenue growth for business and
workers. The reason, unions. I am speaking to you today on
behalf of Actors' Equity Association, the union of actors and
stage managers in the live theater. Our Members work across the
country Los Angeles' 99-seat non-profits, to Kansas City's
Starlight Theater and St. Louis' Rep, to Buffalo's Kavinoky
Theater, and the Wintergarden on Broadway, and everywhere in
between. Our contracts include healthcare and pensions. As the
original gig workers, we are the proof that companies need not
choose between profits and W-2 employee protections.
The pandemic has indeed created a crisis. While many
businesses have recovered, the new variant has brought
tremendous uncertainty and job loss and a live arts performance
once again just last week had closed in IRIS. Earnings and
health insurance were put at risk. When live events close, the
small businesses that depended on them also feel the crunch.
There is one way you can help all of us arts workers. Congress
has an opportunity to pass the Performing Artist Tax Parity Act
(PATPA), which modernizes a provision enacted by President
Ronald Reagan and will provide relief to entertainment workers.
Performing artists pay a high percentage of their income on
necessary out-of-pocket costs to look for work and stay current
in the industry. We pay agents and managers, transportation to
auditions, maintain our websites, headshots, video reels, and
more. It can amount to 20 to 30 percent of our gross income.
Previously this was deductible. Because of an unintended
consequence of tax reform, we lost the deductions of our
unreimbursed business expenses. This means a tax increase,
often of thousands of dollars for working-class artists. I have
seen heartbreaking stories at the Volunteer Income Tax
Assistance Program, here at our Equity office, where volunteers
process thousands of free tax returns annually for low-income
arts workers. One young taxpayer, upon learning that his
liability increased by more than 30 percent, wondered aloud how
he was going to pay his rent.
As we return to work, the last thing we need is a tax code
that punishes us for seeking work. This bill is targeted to
low-income and middle-class taxpayers, not the high-earning
stars.
I commend Representatives Chu and Buchanan for leading the
effort to pass this bill in the House. Thank you, also to
Representatives Newman and Garbarino for cosponsoring. I ask
you all for your support. PATPA is Equity's top legislative
priority and it is endorsed by unions and employers. But it is
not our only priority. We also released a federal policy agenda
for inclusion in the arts, in partnership with our fellow arts
unions. The National Endowment for the Arts should create a
chief diversity officer to drive inclusion deeper into the
grant process. And we strongly support the CROWN Act to end
hair discrimination in our industry.
On behalf of all the arts unions, I want to thank the Small
Business Committee for helping to make sure that unions were
treated fairly during the pandemic by allowing access to the
Paycheck Protection Program. Our staff worked harder than ever
and this program was a lifeline to them and to our employers.
I will conclude today where I started. The arts sector is a
robust contributor to our national economy because of a strong
union presence, not in spite of it. In an industry where
competition is keen and there are more workers than jobs, we
ensure workers have a voice in their workplace, secure
standards, and safe working conditions. That is why the PRO Act
has our full support. It will reform outdated labor laws and
protect against exploitation and employee misclassification,
which is unfortunately far too common in our industry. It will
help the arts and culture sector, and workers, prosper into the
next century. That is the true promise of the creative economy.
I thank you for the privilege of appearing before you
today.
Mr. PHILLIPS. Thank you, Ms. Karas.
And now, Ms. Presley, you are recognized for 5 minutes for
your opening statement.
STATEMENT OF RAEANNE PRESLEY
Ms. PRESLEY. Good morning, Chairman Phillips, Ranking
Member Luetkemeyer, and distinguished Members of this
Committee. Thank you for inviting me to add my voice to today's
hearing.
My name is Raeanne Presley and I join you from my home in
Branson, Missouri. I am co-owner of Presleys' Country Jubilee,
along with my husband Steve and in-laws, Gary and Pat Presley.
As a former mayor of Branson and former Chair of the
Missouri Tourism Commission, I can attest that family friendly
entertainment and the creative spirit is at the heart of our
community.
In 1967, the Presley family opened the original show on
Highway 76. Lloyd and Bessie Presley, along with their four
children, dreamed of entertaining the fishermen and families
with wholesome comedy and music. Opening Branson's first live
music theater on a small, unpopulated two-lane road was risky
but the Presley family was passionate about entertainment and
determined to make their living at it. They exemplify the
entrepreneurial spirit that drives our industry and helped to
build our city.
This March, Presleys will open our 56th season. Our 1,500
seat theater which started with folding chairs has expanded
nine times over the years. We now employ 70 people, produce
more than 200 events each year, and have a weekly television
show averaging 300,000 viewers. Our preshow features a gospel
singalong in our mezzanine, ushers to take you to your seat,
Coke, popcorn, and cinnamon nuts to enjoy. The heart of our
show remains the same--to provide lifelong family memories and
opportunities for folks to forget their troubles for a time.
Many Branson venues, including Presleys, were fortunate to
receive Shuttered Venue Operators Grants and PPP loans. We are
grateful to our elected leaders, especially co-sponsors
Representative Williams of this Committee, Representative
Welch, and so many of you who have recognized that our industry
matters. Without your support for the Save our Stages Act, I
might not be here today to tell you about the challenges we
face beyond the pandemic.
So let me just make sure to say thank you for this lifeline
for our industry.
The reaction of our audience when we reopened showed just
how much people need live entertainment. When the curtain went
up on that opening song, the audience stood for a sustained
standing ovation. I heard similar stories from venues coast-to-
coast.
Our economy also needs live entertainment. A 2019 study
showed that for every dollar spent at a small venue, $12 of
economic activity was generated. While Branson's population is
just over 12,000, our theater and music industry employs nearly
2,000 people and helps to bring an estimated 8.2 million
visitors to our region each year. Nationally, more than 80
percent of adult travelers can be considered cultural tourists.
They spend more, travel more often, and stay longer. Simply
put, independent music venues and the creative arts are
economic engines for communities nationwide.
Today, the rollercoaster ride of the pandemic continues.
Traditionally, about 5 percent of ticket buyers do not attend a
performance but now sagging consumer confidence is causing
national no-show rates as high as 50 percent. This is
devastating because most of our venues rely on in-house sales
to pay core bills.
We are also now confronted with increased costs due to
inflation. Just in the past month, I have received notices of
impending price increases from our trash hauler to our
concession suppliers to our janitorial service. And like many
other businesses, we face the difficult challenge of finding
workers in a competitive environment. Remote work is not an
option for our business. It is especially challenging to
compete with national employers who are able to offer higher
starting wages. The passing of the Save Our Stages Act was a
break we needed to survive the pandemic. Now in the face of
increasingly difficult economic conditions, we are looking for
the break we need in order to thrive.
I have seen the ability of the creative economy to bring
Americans to their feet. Out of pure joy amidst the darkness of
the pandemic, I have seen the power of the creative economy to
transform a two-lane stretch of blacktop into a world-famous
tourism destination.
Thank you for recognizing the importance of our industry
and the value our small businesses add to communities across
America. I urge you to keep the creative economy top of mind as
you consider policies affecting small businesses.
Thank you for your time and leadership.
Mr. PHILLIPS. And thank you, Ms. Presley. And to all of our
witnesses. We appreciate what you have shared with us and you
very much humanized an issue of great importance to all of us
on this Committee and to our country.
Now I would like to begin by recognizing myself for 5
minutes. And Mr. Elrod, I would like to start with you. You
have referenced the pendulum of openings and closings and stops
and starts of so many entertainment businesses. And as you know
better than anyone, the live events industry in particular has
been disproportionately impacted by the pandemic.
So can you share a little bit more with all of us how are
theater companies in particular responding to the chaos and
disruptions of new openings and cancelations due to Omicron in
particular?
Mr. ELROD. Well, I think I can speak to my own experience
in that, you know, the show that I was working on this fall,
The Alchemist for the Red Bull Theater Company was an off-
Broadway show at the New World Stages in midtown Manhattan. And
after 15 months of being completely and totally dark, finally
Broadway was starting to come back. Off-Broadway was starting
to come back. So here we were. It was a comedy. And despite the
masks, things were starting to look up and come back to normal.
But just a few weeks into our run we started to see the impacts
of Omicron all across the city as different shows had different
people calling out and especially on Broadway where shows are a
little bit better resourced with understudies and covers and
replacements for everybody in the building, even those most-
resourced shows were facing challenges that were ending up
putting shows on hiatus or closing them altogether. So we were
kind of watching from the sideline and then on December 15th it
came to us in the form of me coming to the theater with
symptoms, taking a Rapid test, seeing a positive result, and
three other people in the cast got it. And without the
understudies, without the extra stagehands, the theater was
faced with only one choice and that was to close the show
completely. So it is very, very hard.
As Raeanne Presley said, remote work is not an option. We
all have to be there in the building. And if we are sick, we
cannot be in the building. And you can see the consequences
writ-large all over the country anywhere people have to gather
together in enclosed spaces.
Mr. PHILLIPS. I appreciate that and also your advocacy for
more targeted relief dollars for an industry grappling with the
challenges and in particular the actors and the artists that
are so impacted. So thank you.
Ms. Garrett, you have noted that the Oregon Shakespeare
Festival received $10 million I believe in SVOG funds and also
$5 million in PPP funds. Could you share with the Committee in
more detail how those allocations helped the organization
survive?
Ms. GARRETT. Yes. If you can imagine at a $44 million
organization, our spend rate was $5 million a month. And even
when we had to shrink everything down to about 10 percent of
our staff we were still going through a lot of money giving
back tickets and revenue and that kind of a thing. And keeping
our lights on and the doors open and all of that stuff. That
resource is supporting all kinds of things including we were
able to open a production last summer. We were able to do a
production, our first winter production that opened and closed
without any COVID-related closures, thank God. But we are
spending $200,000 a month on tests just to try to keep people
aware of whether or not they are sick or not. We have a very
kind of robust system around making sure that we do have a lot
of people covering because closing for COVID was not a option
for us to be able to open that show. And every time we do spend
money at OSF to make sure that we keep going, we take the
entire town with us. Everybody comes with us on that journey.
So the restaurants are open because of the PPP money. The
hotels are open because of the SVOG money. So in rural Oregon
we are a complete ecology interconnected with one another. And
so for every dollar that we received from the federal
government, every resource, every single dime helped to make
sure that we could buoy the entire region, especially through
the fire. And now we have a little bit of resource to be able
to hopefully open this spring. We are all crossing our fingers
but this is with a lot of resource being spent in advance to
get the shows open and a lot of resource being spent for
testing.
Mr. PHILLIPS. And I thank you. I see my time is expiring so
now I would like to recognize the Ranking Member, Mr.
Luetkemeyer, for 5 minutes.
Mr. LUETKEMEYER. Thank you, Mr. Chair.
I will start out with a question for Ms. Presley here. In
your testimony here you talk a little bit about dealing with
inflation, with rising costs, worker problems. Can you
elaborate a little bit on that from the standpoint of how you
are able to absorb those costs, how you are able to keep going?
I know you mentioned the SVOG program as one of the ways to be
helpful, and PPP. So can you paint a fuller picture for me,
please?
Ms. PRESLEY. I am happy to, Congressman Luetkemeyer. Thank
you again for allowing me to speak.
I would say that the uniqueness of a small business which
there are millions, of course throughout our nation. Inflation
is certainly going to impact in many ways as we look forward.
While the PPP money and the Save Our Stages money was critical
to keeping our employees on payroll this last year and to allow
us to not borrow an enormous amount of money to keep open,
uncertainty is the future.
In terms of inflation, my really only two options are to
pass costs along to our customers or to diminish my customer
experience. And while I am getting notices from some vendors
about their increases in price, I also know that I will simply
open bills come May and June and find that things cost more.
Those are very real for all of our small business owners. And
to remind you as a small business owner, we do not have a deep
financial backstop. We are it and we each sign agreements with
our banks and our lenders to put our homes on the line and our
assets on the line. We are happy to do that. We are happy to
grow our businesses. But it is difficult. And with the
uncertainty with COVID it is unknown. We need consumer
confidence to rally. We need people to feel safe and want to
travel and spend their money on entertainment when they have
other needs as well.
Mr. LUETKEMEYER. You know, there is a limit and as a small
businessperson, you know, you can price some of those increase
into your higher ticket prices but there is a price point in
which your customer base is going to say no, we cannot afford
this or no, we are not going to do this. Or they are going to
cut back on the number of shows they go see. If you could
elaborate. In Branson, you have an enormous number of shows and
not only venues but a number of shows per day. And so a lot of
people go there and they see multiple shows over 2 or 3 days.
They are going to cut down on those number of shows if they
raise price points. Have you looked at that, what the price
point would be and how much it would affect not only yourself
but your other venues there in Branson, how much of an increase
they can sustain?
Ms. PRESLEY. Well, Branson has been built on very family-
friendly, affordable entertainment. That is one of our
hallmarks and we are proud of that. There are 37 theaters right
now that host performances and that price point is frankly
unknown. We will pass along some of the cost increases to our
customers in increased ticket prices this next year. I wish I
could say that I knew but I do know that human nature tells me
that as we have seen at venues across the nation, people are
going to not buy that extra t-shirt. They are maybe not going
to have the merchandise to take home that they would have
normally had. They may not buy as much concession stands or
food and those are really vital things for our independent
venues to help with the bottom line. I am hopeful that our
customers will stay with us and realize that they want a
quality product, and so far we have seen that to be the case
but we are always looking for ways to make a family vacation
affordable.
Mr. LUETKEMEYER. Thank you for that.
Ms. Garrett, you made a comment that really kind of stuck
with me and that was the ripple effect of the SVOG program's
dollars. You were saying that to keep your entertainment venue
going it is not only important to the venue and the workers
themselves but to the rest of the businesses in the area. And
so would you like to elaborate a little bit more on that? I
think it is a very important point. Ms. Garrett?
Ms. GARRETT. Yeah. Thank you very much for the question.
OSF is in a rural area so we are a kind of interdependent
ecology. Everything that we do affects everyone around us. And
so when I said that we laid off 500 people and 5,000 people
lost their jobs locally, you can imagine the impact. This is a
place that people moved to with their families to work at OSF
and other businesses around here. And with our tourism at a
standstill, it was very difficult for people to keep their
businesses open without OSF being open.
Mr. LUETKEMEYER. Thank you. I see my time has expired.
Thank you, Mr. Chairman. I yield back.
Mr. PHILLIPS. Thank you, sir.
And with that I now recognize Ms. Davids from Kansas, the
Chair of the Subcommittee on Economic Growth, Tax, and Capital
Access.
Ms. DAVIDS. Thank you, Chairman. And thank you everybody
for attending. And then for those who are offering testimony
today, I appreciate your time to talk about this important
topic as it relates to importance of the creative arts sector
for our small business community.
We are hearing about it, how hard the sector was hit and
continues to be by this pandemic. And the artists and creative
arts small businesses have had to work really hard to overcome
some of the unique and particular challenges that are being
faced. In Kansas, the arts sector makes up around 3 percent of
our state's GDP and employs about 50,000 Kansans.
I feel like I do have to mention I have spent some summers
going down to Branson and Lake of the Ozarks, too, reciate
seeing you on here today, Ms. Presley.
But because of the importance to Kansas, I was really proud
to be one of those folks to help create the Shuttered Venue
Operators Grants program, providing directed relief to theaters
and music venues and other performance venues.
Kansas small businesses received around $99 million in SVOG
grants last year, which really provided a lifeline to hundreds
of small business. And I have continued to advocate for
additional directed relief funds for these kinds of businesses.
And as the most recent variant has shown us, we are not quite
out of the pandemic yet.
So in conversations with local organizations, nonprofits
like the Arts Council of Johnson County, we know that they have
been working to support creative partners throughout the
community during the pandemic. And most recently I started
focusing on small business education and helping artists
understand some best practices. You know, business and legal
practices.
And so I wanted to ask Ms. Karas, do you think that the
artistic community could benefit kind of more broadly from
programs like this, business counseling and guidance especially
for those small artist-led businesses?
Ms. KARAS. Well, certainly the business owners can benefit
from any kind of development that can be offered to them in
terms of education, what is available out there for economic
development, certain trends that people often do not see when
they are running their own business. They might not see the
trends that are going on around them.
As to the ripple effect that, of course, it will have, it
is on the individuals they hire, the workers. And so everybody
will benefit from it to the extent that the education is out
there. When government gets involved in looking at very
carefully an assisting business, we all benefit. Not just the
people who own the businesses but the people who work in them.
And as I stated before, the ancillary businesses that benefit
from all of the arts economy is sometimes immeasurable. We do
not even sometimes stop and think about who might be creating a
business around something just because there is an arts
employer in the area.
So, yes. The short answer is yes. I think business owners
and business developers could benefit from all the education
and development that could be available to them.
Ms. DAVIDS. Thank you.
Ms. Garrett, I was hoping to hear from you about, you know,
we heard you talk about the kind of ripples and those economic
shocks that we see, and particularly as it relates to in-person
programming, I am curious about your view of how we can help
small businesses in this sector stay resilient as we think
about further pandemic and maybe other types of disruptions.
Ms. GARRETT. So locally, I think it is important to make
sure that the federal government keeps infusing resources back
into these ecologies and communities. For mine in particular, I
think just like every other industry we are going through this
sort of great resignation. The more dollars that are lost
within these industries that are interconnected, the more
likely people are to leave to go to other industries that are
more likely to be able to survive. And creative workers in
particular are leaving in droves. And so they are leaving
restaurants and they are leaving theaters and they are leaving
their day job. They are leaving everything so that they can
figure out a way to survive. So more infusion of resource would
really be helpful. I thank you for the question.
Ms. DAVIDS. Thank you. I see my time has expired.
Chairman, I yield back.
Mr. PHILLIPS. The gentlelady yields back.
And now I recognize the Vice Ranking Member of the
Committee, Mr. Williams of Texas for 5 minutes.
Mr. WILLIAMS. Thank you, Mr. Chairman. And thank you to all
of our witnesses. Like all of you, I am a small business owner
in Texas. I have been for 51 years. And my father was a great
singer in the stages around at the Casa Manana in Fort Worth,
Texas. So I grew up seeing a lot of your industry.
When I talk to business owners back in Texas, they are
concerned about our supply chains, the out-of-control inflation
and the constant threat of tax increases coming from the
Democrats in Washington. Each one of these crises poses new
challenges for small businesses and adds additional costs for
them to keep their lights on. This leaves business owners with
tough decisions in order to keep doing what they love. They may
have to reduce capital investment. They may have to hold off on
hiring new employees or pass the costs if they can along to
consumers and raise prices as they are able to keep their doors
open.
So Ms. Presley, my question to you is, in your testimony
you talked about how your business has struggled with the
increase in the cost of goods due to inflation. We all have
that problem. Can you discuss the adjustments your business
will have to make to offset these cost increases? And
furthermore, how do you think tax increases proposed by the
Democrats could affect your business?
Ms. PRESLEY. Well, thank you, Congress Williams. And thank
you as well for your sponsorship of the Save Our Stages Act.
As I said, we will open again in March, and I think some of
the difficult decisions we will make, this is the time of year
when we order the sequined jackets and costume and when we make
upgrades to our stage. When we look at hiring new performers.
Those are all decisions that I believe we will make a bit on a
hope and a prayer to be honest. We are very much focused on
what is in front of us. Not so much the unknown. We feel like
with COVID and all of the issues that you and Congress must
have on your plates, we respect that.
One thing that would be helpful I wanted to mention while I
had the opportunity is, you know, with the SBA, many of us
received grants that helped our businesses. Those grants were a
bit late in coming and we are hoping very much for an extension
of time to spend that money. That could make a big difference
for many of our venues. And so I wanted to put that before you
as well. We are hopeful that COVID will abate. We see that
happening in the East but not here yet. And we are very much
hoping to be able to operate our businesses as we have done in
the past and keep our costs in line so that folks can have a
great time.
Mr. WILLIAMS. Okay. I was the Republican lead as many of
you said today, and I appreciate that on the Save Our Stages
bill that ultimate turned into the Shuttered Venue Operators
Grant Program, better known as SVOG. This was a necessary piece
of legislation because it helped businesses that were some of
the first to close and the last to open as a result of the
pandemic. Unfortunately, the SBA took months to get this
program up and running and many venues did not survive these
delays. And I applaud businesses like yours, Ms. Presley, for
being so resilient and able to hold off through this
incompetency we saw at the SBA in order to access these funds.
Now, throughout this process, I worked extensively with NIVA to
communicate the horror stories that we were hearing from the
industry as businesses failed to get answers from the SBA
regarding the program.
So another question to you, Ms. Presley, can you expand on
your experience with the SBA and any issues you faced when
attempting to receive the SVOG funds?
Ms. PRESLEY. Well, we had not worked with the SBA in the
past. I was thinking about all the things that we have gone
through in 56 years. We have been through 9/11 and gas
shortages and recessions so this one is a new one. But while
our experience with the SBA was good, we did have that delay
and that certainly made everyone tense and nervous. I will
applaud NIVA and your efforts as well, Congressman, to continue
to find ways. This was a new program, something unique, and we
recognize that. So the dollars did not flow as fast as we
wanted them to. But that said, I think there is a new
opportunity to look at now. I know as Ms. Karas talked about,
an opportunity for SBA to expand their outreach to business
like mine. Many people want to grow their businesses.
Entrepreneurs want to start new businesses. We are seldom happy
with the status quo and I believe SBA could be a backstop for
us. Could provide a lot of information and knowledge that an
entrepreneur might not have. So I will say that I look forward
to kind of renewed efforts.
Mr. WILLIAMS. Well, easier, not harder would be what we
want the SBA to understand.
Lastly, businesses across the country are struggling to
find and retain talented workers.
Mr. PHILLIPS. Mr. Williams, your time has expired, sir. I
am sorry.
Mr. WILLIAMS. My time expired. I return to you, Mr.
Chairman.
Mr. PHILLIPS. All right. Thank you, sir.
And with that I recognize the gentlelady from Illinois, Ms.
Newman, for 5 minutes.
Ms. NEWMAN. Thank you, Mr. Chair and thank you, Ranking
Member, for putting together this great testimony today. So let
me start by thanking all of the witnesses on this call today.
You have brought light and love to when we desperately needed
it throughout our nation. I am a firm believer that the arts
not only heal and help us get through hard times but also unite
those that typically are not united. So thank you for your
great work.
I will also say a couple of other things. Having been an
assistant producer and a copyrighter in my early career, I have
very genuine feelings on this topic because those were hard
times when I had no health care. I went without jobs for long
periods of time. And it was just a constant struggle. So I
clearly have the lived experience around it but also, you are
living it right now in a much more challenging environment. So
I that much more applaud your amazing work. I am also a former
small business owner. So kind of a 360 on this topic. So I feel
for everyone.
I have a forward-looking set of questions. And I am going
to go to Ms. Karas first. So being a Member of the Women Labor
Caucus and being a product of unions and being a strong
advocate for unions, there are just some very creative things
that unions have done over time to support their workers in
these times. We may have this issue again. I do not think we
can deny that now.
So Ms. Karas, what do you think we can do to support our
unions to help our artists and creative community to be
stronger? Are there some ideas you have in a forward-looking
way that would help us anticipate further bad times at some
point?
Ms. KARAS. Thank you. I appreciate this question. I have
been in unions for a long, long many years and every time I
think about what unions do for the workers it all comes down to
providing the security of a group that supports itself and
supports one another. You know, we call each other sisters and
brothers in our organizations and there is a kind of a family
feeling. We depend on one another. My colleague, Mr. Elrod and
I are in the same unions and he knows he can depend on me and I
know I can depend on him when the going gets rough. That is
what solidarity is all about. So that is part of what unions
provide for people. But moreover, the job security while they
are working to know that they are going to be taken care of,
and employers, you know, it is no accident the biggest
entertainment employers in this country and maybe in the world
hire multiple numbers of unions to do every project they have.
Why is that? Because they know what they are getting. And that
is another kind of security that we all look at. We want to
make sure that when we show up on the job we are going to be
treated decently, we get good pension, health, and other job
securities. And we also know that our employers appreciate that
we are ready to show up and provide professional work in a
disciplined manner. And looking forward, I think that some of
the government, the COVID pandemic relief that our union
received along with hundreds of thousands of other businesses
was a lifeline to keep the doors open, to keep the lights on,
and some semblance of staff even if you could not keep everyone
to provide securities for the industry. We provided assistance
to Members who could not pay rent, utilities, medical expenses,
by donating to the Actors Fund, which is a charity, a national
charity.
Union workplaces also know that they provide better
conditions for women and people of color than nonunion
employers do. And the wages are higher, the benefits are
better. And so when workers are looking for work, many of them
want to go to unions because they know that they will have that
security. And we are seeing that kind of interest arise among
young people today throughout the country because they know if
they ban together and tell their employer what they need, they
are stronger together. So off the top of my head those are just
some of the remarkable benefits of a union. And going forward,
I think the stronger the union movement is, the more the
workers will be there for the American economy.
Ms. NEWMAN. Well, thank you for your comments. And yes,
well heard. I, obviously, as some of the folks mentioned, am a
strong proponent of the PATPA--because when we have stronger
unions, we have a stronger middle class. So thank you. If I
may----
Ms. CHU. [Presiding] The gentlelady's time has expired.
Ms. NEWMAN. Okay. Thank you. I yield back. Thank you.
Ms. CHU. And now, Mr. Fitzgerald, the gentleman from
Wisconsin, is now recognized for 5 minutes.
Mr. FITZGERALD. Thank you, Madam Chair.
Ms. Karas, there has been some interest from some arts and
culture organizations including in my home state of Wisconsin
of temporarily removing the $300 cap on charitable giving
deductions to allow more money to kind of flow into the
nonprofit creative sector which seems like obviously an easy
thing to do and a good thing to do. But you are here not only
representing the Actors' Equity Association but also their
foundation. Have you guys looked at this and do you know what
the impact might be? This would be, I guess, considered support
for the Performing Arts Tax Parity Act.
Ms. KARAS. Yes, thank you very much, Congressman. You know,
of course we have looked at all the tax changes that have come
about in the Tax Cuts and Jobs Act and the recent adjustments
that have been made to the code and the above-the-line
deduction for charitable contributions has certainly been a
boon to the charities who many of which thought that they, and
did actually, lose contributions because of the less use of the
itemized deduction schedule. The reduced use I should say. So
yes, I think any contributions to nonprofits are always going
to be welcomed. Is it going to have a huge effect on someone's
tax liability? Possibly not at the rate of 300. But if it was
unlimited you would see the nonprofit world be much more
supported by the contributors because they would have an
incentive to do it now if they are not using the itemized
deduction schedule. So it is a definite yes. We certainly
approve of it. And while it does not have a direct effect on
the Performing Artist Tax Parity Act, that, too, will support
businesses and employers as workers are able to stay in the
industry, feel confident in the industry because they have
equalized their incomes with other taxpayers who earn the same
amount of money.
Mr. FITZGERALD. Very good. Thank you for that answer.
Let me turn to Ms. Garrett. Ms. Garrett, kind of a trickier
question, something that obviously many entities are dealing
with but I know the Oregon Shakespeare Festival announced that
proof of full vaccination or a negative COVID test will be
required to attend performances in 2022. We are kind of already
seeing the effects of this requirement. But how much of an
impact do you believe this will have on ticket and concession
sales and particularly I guess as we get closer to spring and
into the summer months?
Ms. GARRETT. So thank you very much for the question. OSF
has had for years had a very loyal patron base that comes back
year over year, over year, over year. And they love the
company. They love the artists that work here and would do
anything to make sure that those artists are saved. So what we
have experienced in these last few months of producing plays is
a real robust participation in making sure that you are
vaccinated and you have your card and that you have your proof
of the test and, you know, that your child has a proof of the
test and everybody is willing to go in in masks. We were kind
of surprised at how compliant our patron base is. And again,
that is because we have families. We have legacy families that
have been coming here for 30 years, 40 years. Grandparents
bringing grandchildren. And so there is a real desire to make
sure that everybody is safe. So it will not affect our bottom
line I do not believe because of the desire for people to be
safe. And we have had patrons say as they are standing in line
with their cards and everything, you know, thank you for doing
it this way. We want to be able to be safe, too, as we walk
into these spaces.
Mr. FITZGERALD. Yeah, I think the sands are shifting
quickly on those issues and I think we will see how that plays
out.
Thank you for being here today, and I yield back, Madam
Chair.
Ms. CHU. The gentleman yields back.
And now Ms. Bourdeaux from Georgia, is now recognized for 5
minutes.
Ms. BOURDEAUX. Thank you so much, Madam Chairwoman.
The creative economy is a very vital part of our nation's
economy and enriches our communities through all sorts of
cultural contributions. I know after being deprived during
COVID for a while, just sitting and hearing people sing in
person just was such a wonderful, spiritual lifting up. So I
personally experienced how great it is to get back to the arts.
In my district, arts-related businesses employ an estimated
10,000 people and venues in Georgia's 7th District received
some of the much-needed relief in the form of over $2 million
through the Shuttered Venue Operators Grant Program. But
clearly more work needs to be done.
The SVOG provided this important boost, but one of the
things we are starting to think about more now is what are we
going to do if we keep getting hit by these COVID variants over
and over, and over again going forward? And how do we need to
be thinking about how we support the arts industry? How do we
support industries like this over time if that is going to be
the scenario?
So I guess starting with Mr. Elrod, maybe if you could talk
a little about this and what is going on in the industry as
they are thinking about this. Obviously, theater is about being
in person and that is challenging. What do you think the
creative industry is going to need both to recover from the
pandemic but also to really prepare for the long-term if this
does, in fact, become something where we are going to have to
deal with it for another couple years?
Mr. ELROD. Well, thank you very much for the question. I
think one of the things that is interesting is that with COVID-
19, especially with Omicron, we are in a situation where we
have been hit by a tsunami. The tidal wave is in and it has not
gone out. So we do not actually know the negative impact on the
entire creative economy right now. And one of the closest
things we had is that Brookings Institution's report from last
summer, Lost art: Measuring COVID-19's devastating impact on
the creative economy, which measured losses just between April
and June of 2020. And we were talking about $150 billion in
lost sales and 2.7 million unemployed arts workers. So if you
extrapolate that out and just keep multiplying over and over
and over again, you really do think about it in terms of that
star analogy that I used in my opening speech. We are in a
situation where there are possibly, probably many black holes
all over the country with lost art, lost institutions, closed
venues, and arts workers themselves. Ms. Garrett talked about
the workforce leaving and doing other things. And when you
think about who we are, what we do, and what we provide, you
want these 5.2 million workers doing what we do. You want all
673,000 businesses to survive this because they do anchor local
dynamic economies. So what there is to do about it is
absolutely all the interventions that everybody else has been
talking about. But what I was proposing in my opening testimony
is a kind of creative economy super package. If you take every
piece of arts investment legislation that has been introduced
in the last couple of years, put them together, really make
sure there is robust unemployment, you can put together
basically a floor underneath the entire industry, especially
our arts workers and get us to launch into this next phase. But
because there is so much unknown and the wave is still in, that
is why I was recommending maybe a GAO report or a congressional
commission because I think with a $919 billion industry that
has suffered this much damage and continues to suffer this much
damage, we have to take a really deep granular look at what is
happening, what has happened, and what needs to happen for us
to come back.
Ms. BOURDEAUX. Thank you. I am going to run out of time but
I want to just wrap up with this idea. So, for instance, we
have introduced legislation. It is called the Fresh Air Act for
Business, which is to improve ventilation in businesses. And
the idea is we need to restructure for the long haul as opposed
to just give short shots of funding in order to just make it
through the crisis. And so I just want to encourage everybody
to start thinking about this. We do not know for sure that that
is what is going to end up happening but I think we need to
start planning for that and start thinking about what is the
congressional response if, in fact, this is going to be
something that we need to plan for the long haul.
Thank you so much. I yield back.
Ms. CHU. The gentlelady yields back.
And now the gentlelady from Texas, Ms. Van Duyne, is
recognized for 5 minutes.
Ms. VAN DUYNE. Thank you very much, Chairwoman and Ranking
Member Luetkemeyer for holding this hearing.
Early in the pandemic, the effect on the creative economy
was apparent. Shows were halted, venues were shuttered due to
unclear CDC guidance. State and local restrictions were
constantly shifting, making it very hard for small businesses
to reopen and stay open. After a long wait, consumers in many
states, such as Texas where I represent, are now returning to
their pre-pandemic lives. There is no doubt that one of the
keys to a thriving creative economy is an open society. States
and localities across the country should follow Texas's model.
Unfortunately, those eager to return are now faced with new
economic challenges. Everywhere you turn, from the gas pump to
the grocery store, prices are rising the fastest in 4 decades,
and that is if you can even avoid empty shelves.
The Democrats' response continues to be throwing more money
at the problem but at what point do we ask what we are getting
for that money? We spent taxpayer dollars paying people to stay
home from work for much of the pandemic, but it is still
hurting employers. And just last week we had the SBA's OIG
unable to tell us what happens to the billions of dollars of
fraudulent money that is clawed back from SBA's COVID relief
programs, money that could be highly beneficial to the very
businesses that we are discussing today.
The creative sector is part of the small business economy
and all small businesses are in desperate need of solutions to
inflation, supply chain struggles, and employment shortages.
What we do not need is another frivolous, multi-trillion dollar
spending package while we are chasing down at least $100
billion in fraud. The fact is, billions of federal dollars
remain unspent and state governments have so much access to
stimulus money that they are now paying off deficits that were
created by their failure to keep a balanced budget instead of
going toward the pandemic.
I am interested, Mr. Elrod, your business is in New York
City. During the pandemic, state and local governments diverted
in how they handled restrictions in their respective
communities. In each of your communities, well, specifically in
New York, how did your state and local restrictions and
regulations affect your business and ability to operate?
Mr. ELROD. Well, in New York City, I was sitting with a
friend of mine. I was on my way to see a Broadway show on March
11th when we were sitting in a midtown bar and our governor
came on and announced that Broadway was closing. And not far
after that, off-Broadway. And then pretty much the curtain came
down and the lights went out all across New York City. And a
lot of people in retrospect feel that March 11th was too late
and that the response was too slow and that the virus had
already taken hold in New York City, obviously, a very dense
metropolitan area. As an L train rider, I can tell you we were
all in a lot of danger. And so I believe that what happened was
appropriate and prophylactic against----
Ms. VAN DUYNE. So then you are agreeing that shutting down
was the appropriate response. And I also need to ask, did you
understand that New York City, or New York has received over
$272 billion in COVID relief? I am wondering how much of that
$272 billion has been received by the State of New York. Do you
feel like that was appropriately spent on the arts?
Mr. ELROD. Well, part of the efforts I was with earlier in
the year, as Be An #Arts Hero we were deciding do we go to the
state and see if we can get American Rescue Plan funds or do we
continue talking to the federal government? And the answer has
to be both. Because what we are really doing here with Be An
#Arts Hero is we are calling it CELP, the Creative Economy
Literacy Project. And what we are trying to do is talk to
people like you in state and local government and say, hey, we
are in a profound amount of trouble. And if you really want to
build back in an incredible way, we are the way to do it. But
you need to stabilize us, put a floor underneath us, and then
you can harness us as a backbone of a great recovery. So in my
opinion, there is never going to be enough money spent on the
creative economy until everybody understands just what a
phenomenon we are and what an incredible resource is available
to policymakers if they would like to take advantage of us. And
that is why I have proposed this kind of super package to
stabilize us and allow us to, you know, help us to help you
build back on the other side of this. After the plague came the
Renaissance. After the 1918 Flu came the Roaring Twenties.
There is going to be a huge appetite for what we have to offer
so we need to be around to offer it and we will jumpstart this.
Ms. VAN DUYNE. Thank you. My time is done. I yield back.
Thank you.
Mr. ELROD. Thank you.
Ms. CHU. The gentlelady's time has expired.
And now I recognize myself for 5 minutes.
First, I want to thank Chairwoman Velazquez for calling
this important hearing which I was truly looking forward to as
a representative of the Los Angeles area, which is the center
of film, television, and music. It is hard to overstate the
impact that the pandemic has had on the creative economy. To
support a strong, durable recovery for those industries that
employ over 5 million workers nationwide, we need to ensure
that creative professionals are fairly compensated for their
work. And that includes musical artists, like Members of the
Recording Academy who must be fairly compensated, as well as
our actors of film and television.
That is why I am proud to have founded and relaunched the
bipartisan Creative Rights Caucus with my Co-Chair,
Representative Drew Ferguson of Georgia. This caucus will
continue to work to protect the rights of content creators and
I look forward to working with you to further this goal.
I also ask for unanimous consent submit for the record
testimony from the Screen Actors Guild and the American
Federation of TV and Radio Arts (SAG-AFTRA), which represents
160,000 hardworking professionals in the entertainment
industry. And as Chair I say, so ordered.
So now for my question. Ms. Karas and Mr. Elrod, I am proud
to have introduced H.R. 4750, the Performing Artists Tax Parity
Act of 2021. This legislation would modernize the qualified
performing artist tax deduction to ensure that more creative
workers can seek employment without facing steep personal
expenses.
Now, I am proud to have pushed for relief for performers.
For instance, for the Gig Worker Pandemic Unemployment benefit
and for the Mixed Income Unemployment subsidy which were
successfully included in our legislation to relieve us on the
pandemic. And I am also proud that this Committee supported
theaters and venues through the Shuttered Venue Operators
Grant.
But we must do so much more to support the actors,
musicians, and artists who make performances so incredibly
special. The Qualified Performing Artist tax deduction has not
been updated in decades and currently does not meet the needs
of performers.
So Ms. Karas, can you talk more about the purpose of this
tax deduction and why we need legislation to modernize it for
today's economy?
And Mr. Elrod, I have heard from so many performers who
have to pay for extra expenses, like photo and makeup and still
not get the job necessarily. Can you tell us your stories about
the expenses that performers have to face?
Ms. Karas?
Ms. KARAS. Thank you very much, Congresswoman Chu. You
know, we also thank you for your introduction of this bill,
H.R. 4750 and the support that we have gotten so far.
PATPA is a correction to an unintended consequences of what
happens when a bill is created by a president, in this case
Ronald Reagan, recognizing the value of entertainment workers
in the code and the provision itself was not indexed for
inflation. Congress saw fit to leave it in the code with the
last Tax Cuts and Jobs Act tax bill and we were grateful for
that but we realized that the modernization is long overdue.
What this bill dies is it levels the playing field by
equalizing the income that people who work in the performing
arts have against people who do not work in the performing
arts.
I will just give you a little example. You and I are both
single and I am in the performing arts and you work in an
office. And we both earn $80,000. But I am spending about 25
percent of my gross income to pay my agent, my manager, to look
for work, transportation, continuing education and classes,
some equipment, and especially during the pandemic, we have all
had to buy----
Ms. CHU. Ms. Karas, I would like to give time for Mr. Elrod
also to say something.
Mr. ELROD. Thank you very much. I would simply join Ms.
Karas in everything that she was saying. And just on a personal
anecdotal note, of course the challenges of the pandemic have
increased personal costs even while we suffered 15 months and
more of total unemployment, we are expected to have the highest
quality Internet, the highest quality computers and cameras and
microphones. And for the little work that we are able to do
during this time, we are still paying 10 percent agent
commissions. So there are lots and lots of out-of-pocket
expenses that performing artists have to take on. And they have
actually increased during one of the hardest moments for us.
And so something like the passage of the bill that you have
introduced would help us out a lot. And thank you for
introducing it.
Ms. CHU. Thank you so much. My time has expired.
And now the gentleman from Pennsylvania, Mr. Meuser is
recognized for 5 minutes.
Mr. MEUSER. Thank you, Madam Chairwoman. I thank our
Ranking Member very much, Mr. Luetkemeyer, for bringing us all
together. Very interesting subject. Thank you for all being
here.
So I want to just talk a little bit initially about the
general business concerns that your industry has and you as
proprietors and entrepreneurs and stakeholders. You know,
obviously education to create your best workers, your staff,
your talent, education these days is unbelievably high, very
expensive both public and private. So skills development must
be a challenge. Taxes, certain in New York and other cities are
crazy. And the idea of increased tax on small businesses does
not in my view help at all. Keeping your employees happy,
healthy, but as well, safe. You know, because I want to ask
about that a little bit, how public safety weighs in here.
Access to capital, very important. Your cash flow. You have all
been talking about that. Technology I made a note of but that
is something a little bit different. Capital investment was
mentioned about the ventilators just came up briefly. What sort
of additional capital investments were made to handle COVID and
just matters moving forward. I think people are just generally
more health conscious. And your product, of course, creating
that. And your customers.
Now, I understand, see, you folks were shut down, or
Broadway. I am relating this somewhat to Broadway. I cannot
speak for Branson. Shut down for about 18 months, I believe.
Now, Japan was shut down for 6 months, UK was shut down for 12,
and yet even with that build up, you are getting about 66
percent of capacity now. And Japan was very big on the whole
ventilator plan. UK to an extent. They were trying to catch up
afterwards. I am not so sure what was being done on Broadway
and Branson and L.A. and other places.
But the thing is this, look, probably everybody on here has
seen The Phantom, seen Hamilton, seen Wicket and Jersey Boys
and love the theater. So we are very much advocates and
proponents of doing what it takes to help bring this extremely
important industry back. I mean, I have a daughter that lives
in Manhattan and all that is very important.
So the thing is, I want to ask, what would you like to see?
Besides additional PPP or even if that is necessary, or the
Shuttered Venue program, what would you do differently? I mean,
Monday morning quarterback is easy. What would you do? What is
your plan moving forward? Where can we be of assistance?
Because it is also notable that, for instance, the NHL, indoor,
larger arena, understand, but they have had a record year. And
yet, our entertainment industry is struggling big time.
So I will ask Ms. Presley. I know you are Branson, and Mr.
Elrod, I would like to ask you, what have we learned and what
should we do moving forward that will be favorable to you all
and to your business?
Ms. PRESLEY. Well, thank you, Congressman. I appreciate the
question. It is a difficult choice. There is no way around
that. I think consumer confidence is really where we are
focused as an association with NIVA. As we have talked about,
my business is here. We are looking out for our guests and our
customers and our employees. We are encouraging masks and we
are encouraging vaccination but that is where we are here in
Missouri. For other venues across the nation there are
multiple, multiple, rather different views of this. And of
course, going forward with COVID it is very hard to know.
Mr. MEUSER. And Ms. Presley, I am sorry. I probably had too
long of an opening.
Mr. Elrod, could you speak upon New York?
Mr. ELROD. Thank you very much. I think the short answer is
would it not be great to have a secretary of Arts and Culture?
You know, when we have agriculture and it is in trouble, there
is a secretary of Agriculture to say, ``Okay, this is what
needs to be done. Let's take a deep dive analysis.'' If we had
a secretary of the Creative Economy or Arts and Culture,
somebody at the executive level on the Domestic Policy Council
who could say, ``All right, look at this $919 billion industry
and this 5.2 million person workforce, look at the jeopardy
they are in. Let's develop together the guidance of what to
do.'' Right off the top of my head, obviously continuing robust
unemployment for the nation's arts workers would be fantastic.
Mr. MEUSER. Thank you, Mr. Elrod.
I am running out of time. I will make that recommendation
to our governor of Pennsylvania. And I do believe in the Film
Tax Credit and your industry. So thank you very much.
I am sorry, Madam Chair. I yield back.
Ms. CHU. The gentleman's time has expired.
And now the gentleman from New Jersey, Mr. Kim, is
recognized for 5 minutes.
Mr. KIM. Thank you. Thank you, Madam Chair.
I would like to start, Madam Chair, by just asking
unanimous consent to enter a letter from Our Pride New Jersey
into the record.
Ms. CHU. So ordered.
Mr. KIM. Thank you.
Our Pride New Jersey is based in Burlington. It is in my
district. And pre-COVID, there were over 19,000 arts-related
businesses in New Jersey that employed more than 80,000 people.
In our state, every art and cultural patron spends over $33 in
local economies each time they purchase a ticket for a cultural
event. And that translates into over $662 million each year in
economic impact when cultural venues are fully in operation. So
the creative sector clearly is having a real impact in terms of
creating jobs and economic activity.
But I also want to focus on another element here, which is
that it has an impact on our kids. And they have been through
an awful lot over the last couple years.
Back in April I met with the Burlington County Regional
Chamber of Commerce. And they connected me with an organization
called Morristown Theater Company in my district. As a
nonprofit arts organization without their own building, they
were not sure if they were eligible for the Shuttered Venue
Operators Grant. They had to get extra creative during the
pandemic, even producing shows out of a parking lot. My office
was able to work with them to confirm that they were eligible
and encourage them to apply. They ended up getting a $200,000
grant. They also utilized the EIDL, the PPP, employee retention
credits, and assistance form the New Jersey Economic
Development Authority. They report that this grant, along with
others, allowed them to keep their doors open and to keep their
work going forward.
Just yesterday, I checked in and they were starting
rehearsal for an upcoming production of The Little Mermaid
which they are working on with a lot of little kids in the
community. And the kids are incredibly excited that we are
doing this hearing today and shining a light on the arts and
about how it impacts them.
I want these kids and kids all over the country to know
that we are listening to them. That we understand that this is
not just about business. It is about our development and it is
about our education to our kids as well.
So I just wanted to throw this out there. You know, Ms.
Garrett, I know your organization works with professional
artists. But if you are any of the other witnesses would like
to speak to the importance of the arts for our children, what
they have missed during this pandemic, and the benefit of
investing in the arts, experiencing the arts education for our
children and our families, and what it is that we could try to
do to just try to make up for this lost time in terms of being
able to give your kids that opportunity to experience arts but
also to be able to participate in it.
So I just kind of wanted to open it up if anyone wanted.
Ms. Garrett, if you wanted to start off.
Ms. GARRETT. I thank you for the question. You know,
numerous studies have shown repeatedly that arts education
increases student engagement, helps them learn positive habits
and attitudes and creativity and creative problem solving and
teaches critical intellectual skills and observation and helps
them learn languages and mathematics and helps them practice
teamwork and all of that. OSF has been a leader in arts
education for more than 50 years. And like I said during my
opening statement, you know, we have 2,300 education and
engagement programs that were completely shut down but served
communities across the region. We have students that come in
from all over the West Coast to watch our plays, to learn
something from our artists, to engage in activities around
creative art making. And the loss of that is twofold. The first
is that you lose access to all of those wonderful things that
we all get, we all benefit form when we learn in arts education
programs.
But you also lose that pipeline. I started in arts
education programming. Most of us who are arts workers did. We
started there. We learned about a craft and we continued to
focus on it until we mastered it. And so without introducing
children, you do not have enough people on the other end who
are really interested and engaged.
And here is the thing. Most of us in the arts creative
economy, we have transmittable skills. Carpenters can work in
construction. I run a multi-million dollar, multi-lateral
business. I can be a CL of a different kind of company. You
know, you have to sort of thing about it like that, that we
give our skill set to this industry so that everybody can
benefit from it.
Mr. KIM. I think what you raise there about the pipeline.
What you raise there about the pipeline is great. And the last
thing I will just say and I will close is that, you know, I
also felt like with my own kids, I have a 4-year-old and a 6-
year-old, that getting them to engage back in arts has been a
way to socialize them back into society after, you know,
specially half my 4-year-old's life has been in a pandemic. And
getting him to go and sing and dance and other things like that
has been so rewarding.
So thank you for what you do. And Madam Chair, I turn it
back to you.
Ms. CHU. The gentleman's time has expired.
And now the gentlelady from California, Ms. Young Kim, is
recognized for 5 minutes.
Ms. YOUNG KIM. Thank you, Chairwoman, and Ranking Member
Luetkemeyer, for holding this hearing.
I want to thank all our panelists for your time and
engaging in our conversation with us.
First, Ms. Presley, in your testimony you indicated that
your business is struggling with the increased cost of goods
because of inflation. So can you look at your list of expenses
and tell me which are the biggest price increases that you have
noticed in the last 6 months. And as you know, I say this
because these price increases, the inflation, it is expected to
persist until well into the middle of next year. So I wanted to
hear your thoughts and elaborate how this is going to affect
your business and your planning.
Ms. PRESLEY. Thank you, Congresswoman, first.
I wish I could say that I exactly know. We are dark right
now and we will open again in March. But I certainly see
increases coming and shortages as well of the type of
merchandise that we sell. I see that in terms of our concession
supplies. We saw that last fall. Not only just price increases
but we saw inability to secure cups and different things that
we need for our business. We know that is real. It is unknown
yet in terms of insurance costs but we anticipate that that may
happen as well. It is not any one thing I would say. It is just
cumulative and when you run a small business like our
independent venues do, it is the cumulative things that
actually are most difficult to manage.
Ms. YOUNG KIM. Sure. Well, thanks for your answer. I asked
that because if the businesses have to plan and deal with
inflation well into next year and beyond, it is clear that the
problem is not transitory and we have to deal with it; right?
So I just wanted to ask that.
But I also want to ask a question to you, Ms. Presley. I
was intrigued by the statistic that you quote that for every
dollar spent at a small music venue, $12 of economic activity
was generated for area businesses. Can you elaborate on that
study and share with us your unique experience with the local
economic ripple effect of Presley's Theater in Bronson?
Ms. PRESLEY. Well, thank you. Yes, I mean, I suspect if you
think back about the last time you took a vacation, you very
seldom go to do one thing and then leave. So we are cognizant
that when our visitors come to Branson, it is usually a visitor
party of about 3-1/2 people and they spend over $1,100 inside
our community to do things. They buy gas. They eat at the local
restaurant. They for certain go shopping. They are likely to
see more things. People tend to see over three shows when they
come to Branson, Missouri. So I see this with all of our
independent venues and small businesses, whether you be rural
or urban. You go downtown Chicago, you are going to see
something fun at a music venue but you are going to stop before
and after. Maybe you are going to have a drink. You took an
uber to get to your destination. I think that it is easy to see
how we are able to multiply the $1 into economic numbers that
enhance our entire community. Keeps people employed.
Ms. YOUNG KIM. Thank you for your answer. You know, like
Ms. Judy Chu, I represent the State of California where we have
Hollywood and movies and entertainment is really the key, one
of the key industries in our state and we welcome everybody and
we can really expand on that dollar spent and generate that
economic activity that we talked about in Missouri.
The next question I would like to ask is to Ms. Garrett. An
ongoing theme that we have explored in this Committee is the
supply chain crisis. Businesses, especially the small
businesses, are unable to source goods necessary to create
their products or deliver goods to anxious customers because of
the supply chain crisis. And I realize that your businesses,
live entertainment is not a good space business. But have you
seen any impact in this regard in the live entertainment realm?
Ms. GARRETT. Oh, yes. Thank you very much for the question.
So because of the surge and consumer demand and COVID
warehouse closures, we had a whole myriad issues trying to open
up our shows last year and we know we are going to move into
the same problems this year. Cardboard, lumber, containers,
trucks, workers, paint. We canceled early performances because
of supply chain issues for our winter show. And people went on
stage with paint still being wet. The lumber did not arrive in
time. It was still sitting out on the water. The molding
company had a COVID issue so they were not able to get things
through the supply chain. And this is going to be ongoing. And
after nearly 2 years of expenses with no audience revenues, the
performing arts will find themselves facing outsized restart
costs.
Ms. CHU. The gentlelady's time has expired.
And now the gentleman from Pennsylvania, Mr. Evans, is
recognized for 5 minutes.
Mr. EVANS. Thank you, Madam Chair.
Ms. Karas, I hope I get your name right, you submitted
testimony to the House Ways and Means Committee regarding your
views on the Qualified Performance Arts Tax deduction, a
portion of the Tax Cuts and Jobs Act. Would you mind
elaborating on the effect that this tax increase has had on
working middle-class artists?
Ms. KARAS. I appreciate your question, Mr. Congressman.
The very short answer is it has been discouraging. A lot of
our performing arts colleagues have decided to leave the
business because they can no longer sustain the out-of-pocket
costs to remain viable. So they have taken other jobs. They
have gone into other work. And it has been unfortunate that
they have had to leave the industry. Those who have stayed have
struggled because as I was saying before, to have to spend your
out-of-pocket money, a write-off of your gross income and then
be taxed equally the way someone else with the same wages you
have is you are starting behind already. So, for example, if I
spend 25 percent of my gross income on my out-of-pocket show
business expenses just to stay viable and another taxpayer with
the same wages does not have it, we are taxed the same but I
have fewer dollars to spend on my home, my rent, my utilities,
my medical care. If I have a family, on any of those costs. It
is very discouraging. So we are hoping that the Performing
Artists Tax Parity Act will get passed with all due speed to
put us on a level playing field with taxpayers who have the
same income but do not have to spend the same amount of money
to stay in their jobs. This is vital.
And you know, the Tax Cuts and Jobs Act really stressed tax
relief for working middle-class taxpayers. So this is all we
are asking is to be on a level playing field, to pay our fair
share of tax, no more, but certainly no less.
Mr. EVANS. I would like to ask you a follow-up question.
One of our largest exports is entertainment. Can you talk about
how important it is, both for America and for the rest of the
world, that we support the creative economy for this reason?
Ms. KARAS. Thank you. Yes. It is rather astounding, the
export of entertainment around the world. Those of us who are
in the United States take it for granted that we can just have
all of this content at our fingertips. A lot of it is recorded.
Much of it is live. Some of the live has been streamed over the
pandemic. But when you think of the amount, the billions and
billions of dollars that is sold internationally, it is
astounding. Code Section 181 to help the employers, the
production costs, the tax subsidies, you know, we would hope
that the cap would be raised on that at some point to help
those employers because the more help they have, the more
production they generate.
Well, as I said before, 4.3 percent of the GDP is the
entertainment sector. That is astounding. Most people do not
even think about it because it is ephemeral. There is no
durable goods there. So we are thankful for the support and we
hope for all of it from this Committee as well for the PATPA so
that we can enjoy the same level of spending if our tax burdens
are equalized with those who do not have the burdens that we
do.
Mr. EVANS. Very quickly I would like to follow up with Mr.
Elrod on that same question and his response to it.
Mr. Elrod on that question?
Mr. ELROD. I think what is important is obviously there is
the socioeconomic or the economic impact of the export but
there is also the identity of America and the idea of American
soft power throughout the world. As people consume our content,
our movies, as they visit our cities, 68 percent of all tourism
is for arts and cultural activities. When people come here from
around the world and they take part in our creative economy, it
gives them a sense of pride and wonder and awe about the power
and strength of America inside their collective imaginations.
And then they take that back throughout the world.
Ms. CHU. The gentleman's time has expired.
Mr. EVANS. Thank you, Madam Chair.
Ms. CHU. Thank you.
And now I recognize the gentlelady from New York, Ms.
Tenney, for 5 minutes.
Ms. TENNEY. Thank you, Madam Chair, and Ranking Member
Luetkemeyer. And thanks for holding this hearing. And we
appreciate the insight and time of the witnesses as well. And I
am honored to represent Upstate New York, which has a strong
history and culture relating to the arts. I also always wanted
to be an artist, but here I am, a politician now. We need a
very strong ecosystem of manufacturers, designers, venues that
serve artists and musicians in our greater community, including
many historic sites. A lot of people do not realize that my
hometown of Utica is where Dick Clark went to school and got
his start. Annette Funicello of Mouseketeer fame. Joe
Bonamassa, the great musician, Sawyer Fredericks, and so many
others have come from our small city, our region, who have done
an amazing job.
But another thing is on the manufacturing sector, a lot of
people do not realize that the golden artist colors you see
when anyone who is an artist knows what they are, were actually
started in my district in New Berlin--we say New Berlin, not
New Berlin--New York. And I have provided a wide arrange of
oil, acrylic, watercolor paints for earnest for many years. We
also have a lot of printing companies, including my own, but
another one I would like to mention is Curcio Printing in
Vestal, New York, where there is a lot of graphic design. And
people do not realize I owned a newspaper, but there is a lot
of artistic venues with newspapers, designing ads designing
creative production items for customers. And we did a lot of
that.
My concern is that in so much of this, and what has
happened in my community with these great venues and great
artists, is during the pandemic these industries have suffered.
If they had not been designated essential, they were forced to
shut down, forced to lose. And thankfully for the PPP program
we were able to get some back. But a lot of these lockdowns are
continuing. And even in an unscientific way which is really put
I think a real problem with especially a lot of our event
spaces which we have many people who come to perform in our
region. And it concerns me that if we continue with these
lockdowns, we are not going to get the reopening and the need
for even performing artists, musicians, and others to be able
to get back on stage and we will have to rely on remote
learning. And as we know, there is nothing like being there in
person.
So I first wanted to ask Mr. Elrod, since you were very
passionate about this, I had heard from a lot of these event
space owners about the shutdowns or inability to have
consistency and what the rules are and how to enforce those and
guidance as how to deal with this.
From your experience in theater and performance space, do
you think that this sort of continuation of this arbitrary
decision-making and, you know, this process is helping the
creative economy. How would you make a uninformed standard so
that everywhere that our artists perform, whether they are in
my community or in New York, they know what is predictable and
how to invest so they do not waste money on resources. I am
trying to protect themselves and their audiences.
Mr. ELROD. That is a really good question. And thanks for
all that prelude. My first professional job was at the Hangar
Theater in Ithaca, New York, so I am familiar with upstate and
it is close and dear to me.
You know, just anecdotally from my point of view and my
experience is at the beginning the shutdowns were intended to
keep people safe from the transmission of COVID-19 and those
government lockdowns did lead to this 15 to 18 month in forced
unemployment for so many arts workers. And again, when we talk
about FPUC, et cetera, it was not that arts workers were lazy
and did not want to go to work. We could not. So those were the
first rounds of shutdowns.
Now, the shutdowns that I am experiencing, or at least the
ones that I am seeing now, are not necessarily happening
because of arbitrary government imposition but because the
workforce are getting sick. So like in my neighborhood of
Bushwick, Brooklyn, I follow everybody on Instagram and I was
going to go see a rock and roll concert on New Year's Eve.
Well, most of the staff of the venue got sick. They shut the
venue down. And there are a lot of really cool rock and roll
clubs, et cetera, that I would love to see. And they are all
just closed because----
Ms. TENNEY. Okay. Can I reclaim my time? I just want to say
it is great, okay, so your position is the shutdowns.
I want to just ask Ms. Presley if you could weigh in on
that. You know, on inflation or the supply chain.
Representative Kim got into that a little bit with you. Can you
just kind of elaborate? Is it just people are sick or is it
inflation and supply chain that is affecting your industry? You
have got 10 seconds.
Ms. PRESLEY. I have to say it is both. We certainly have
seen increased illness here this last month but we are hopeful
in the next month that we will see some of that wane. But
consumer confidence is still the driver and whether or not our
visitors feel safe both from the virus and to travel.
Ms. TENNEY. Thank you.
Ms. CHU. The gentlelady's time has expired.
And now the gentlelady form Pennsylvania, Ms. Houlahan, is
recognized for 5 minutes.
Ms. HOULAHAN. Hi, thank you, Madam Chair. And thank you so
much for the panelists and their testimony today. This topic is
very, very personal to me because my daughter is, indeed, a
director of theater. A professional director of theater. In
fact, she worked out at OSF when Bill Roush was there and Jacob
Padron is one of her mentors. And so hello out there to OSF.
The creative economy plays a really large role in my
community, too, with 296 small businesses involved in the arts,
entertainment, recreation within Pennsylvania's 6th
Congressional District, which is just outside of Philadelphia.
And many people have mentioned the Shuttered Venue Operators
Grant program having been a lifeline during this time. With
that said, especially with Omicron, I know that many business
workers in the creative economy are still especially vulnerable
during this public health crisis.
As Congress is trying to understand the needs for
additional COVID relief, I think we need to be smart about
improving these programs and learning from the challenges that
we have experienced in the programs we have rolled out.
With that said, I have heard from employers in my
community, like Science Explorers, which is an organization in
my district which has applied for the Paycheck Protection
Program grant and the Shuttered Venue Operators Grant. The
business reached out to my office to express their frustration
because the SVOG process was very complex and they found it to
be very time consuming and burdensome.
So my first question is to Ms. Nataki Garrett. I understand
that similar to Science Explorers at the Oregon Shakespeare
Festival also applied for both PPP and SVOG grants. Can you
please describe your experiences with the Paycheck Protection
Program application compared to the Shuttered Venue Operators
Grant program. Particularly, I am wondering if there are ways
where we could be improving the SVOG program to be streamlined
and approved.
Ms. GARRETT. Thank you for the question. Just to be honest
with you, I think the biggest problem was that there was not
enough information. And so our banks did not have enough
information and so they could not pass on enough information to
us. And then the other thing was the information from the SBA
kept shifting. And so we thought we would have something under
control and then we were given something else. And then we had
to submit this paper and get this thing done.
We had a little bit of leeway because we had received some
CARES Act funding as well through the state. And so we had a
little bit of a buffer but a lot of my colleagues really
suffered in that time waiting for information to be clarified.
It was different from state to state and it was different
actually from bank to bank. And so I think streamlining the
process would be really beneficial. And especially if Congress
were to be willing to release the $2 billion additional funds
that are left over from the SVOG back into circulation to
streamline a process so that we could have access to that
money, now that we have already gone through a process it would
be really, really helpful.
Ms. HOULAHAN. Thank you. And my next question is sort of a
follow-on to that to Mr. Carson Elrod. You had mentioned in
your testimony that the SVOG grants are a lifeline and that
live entertainment venue sector is a small fraction of the
large and fragile creative economy at large. And so I have
heard similar sentiments from businesses like my own, Science
Explorers, which was ultimately deemed ineligible for SVOG
relief despite having had to cancel 500 programs of their own
at the start of the pandemic. How can the SVOG program,
assuming that we are able to shake loose some more resources,
increase or enhance the eligibility requirements to be able to
be improving so that more businesses like that business that I
am mentioning could be able to receive the relief that they
need in these challenging times. Is there a way to expand the
definition or what would you recommend?
Mr. ELROD. I recommend doing exactly that. And thank you so
much for the question.
One of the earliest collaborators we had at Be An #Arts
Hero was Brian Blythe. And he works in John Kristiansen's
costume shop in Manhattan. And he started the Costume Industry
Coalition, which represents over 60 highly skilled, artisanal
workers, and their whole job is to supply costumes to the
entire ecosystem of the creative economy. That is cruise lines,
operas, rock and roll shows, theater. I mean, they are a
cornerstone of the creative economy nationally. And they had to
close down completely at the beginning of everything. All of
their orders dried up. After the short rounds of PPP, they had
to lay everybody off. And they have been essentially doing, you
know, kind of Go Fund Me and charities. And they were one of
the industries that fell through the cracks because the SVOG
grants did not really contemplate the entirety of the creative
economy. And it is really important that everybody know that
that intervention is a watershed moment in American history
between Congress and the creative economy. And there is nobody
in the creative economy that is not appreciative of what #Save
Our Stages and SVOG represents. What would be amazing is to
superfund it, expand it, and make sure that it really is a
floor for the entirety of the creative economy to get us
through this moment and into the next one.
Ms. HOULAHAN. Thank you. I appreciate it.
My time has run out and I yield back, Madam Chair.
Ms. CHU. The gentlelady's time has expired.
And now the gentleman from New York, Mr. Garbarino, is
recognized for 5 minutes.
Mr. GARBARINO. Thank you, Madam Chair. I appreciate the
opportunity to speak, and thank you to the Ranking Member for
having this hearing today.
Mr. Elrod, my question was similar to what Ms. Houlahan
just asked. By the way, loved you in Wedding Crashers.
I was going to ask you about the other business. I am from
Long Island, New York. You know, everybody goes to Broadway.
Everybody goes, you know, they come in and they go restaurants
and not so we had the Restaurant Revitalization Program that
tried to help some of these restaurants. But there are other
parts of the creative ecosystem. You just talked about a
costume supplier. We had a lot of people that were hurt in New
York City when the film industry and Broadway was shut down.
Can you go a little further with what you were just saying?
You talked about costumes. Who else do we need to expand it to
if there was another tranche of money coming, like who was left
out?
Mr. ELROD. Oh, well, I think that is one of the things
where I would like to pivot towards like a GAO report or a
congressional commission so that you can hear from more than
just four of us. To like really get the Brian Blythes of the
world in front of you to like really talk about who was there
and who was left out. I think that would be the most important
thing to do because I think one of the problems is we do not
even know what we do not know as I was saying. The wave has
come in and the damage is not yet knowable. Also our NAICS
codes do not appropriately include the entirety of the creative
economy. And so without understanding the fullness of the
creative economy, we also do not know who slipped through the
cracks.
Mr. GARBARINO. Yeah. So the dust has not completely settled
yet and you will not know probably at least until everything is
up and running again at full speed, what is missing? Okay. I
understand that.
I was in the state legislature for New York for 8 years.
New York had very generous, I thought, tax program to help
bring moves and TV shows to the state to get film credits.
Congress here, we did PPP. We did the Shuttered Venue Operators
grant program. And there are a couple people from a couple
different states here. Can you talk about what the states have
done? Because we also sent them a lot of money to help with
more local issues and we have Oregon, I think, and Missouri and
New York. Have any of those states done anything since the
pandemic shut everything down to help your industries in
addition to what Congress has done?
Ms. Garrett?
Ms. GARRETT. Thank you very much for the question. Yes. So
very early in the pandemic, a group of arts organizations that
were much more highly resourced. Some of our smaller
organizations got together and lobbied for CARES Act funding.
So we received as a coalition of performing arts theaters,
performing arts venues, the ballet, the symphony, the opera.
OSF at another theater called Portland Center stage. We lobbied
for $8 million in CARES Act funding. And that was actually the
thing that buoyed us and actually brought me to lobby with the
Professional Nonprofit Theater Coalition, lobby for access to
SVOG funding. So once we knew we could do it, we did it again.
And we were really grateful for the CARES Act funding. We
talked to some of our other colleagues across the country to
try to help them figure out ways to lobby for some of those
resources. In these times, every little dime, every little bit
counts.
I also wanted to go back to your question to Carson. There
are a lot of theater workers who are not recognized as such--
carpenters, stitchers, ushers. A lot of those folks are only
paid when shows are running. And so they were not necessarily
affected by industry-specific funds. And so being really clear
about the full impact across the industry, you know, our ushers
work every single time a show gets up ad they are just as
important as the people who stand on page. But there is no way
to fund them except through unemployment during the pandemic.
Those are the things that we have to think about.
Whereas, when we did do the streaming of the shows, we paid
everybody. Everybody was a part of this production. We paid
every single person. But we were not able to pay the ushers and
the carpenters did not receive any kind of funding for that.
Mr. GARBARINO. Mr. Elrod, you said you wanted to further
answer something?
Mr. Carson?
Mr. ELROD. Basically, exactly what Ms. Garrett said. I was
thinking of the Small Business Committee, so I think I was
thinking of small businesses but I probably forgot to leave out
the real group of people that has been left out are the arts
workers themselves. And that is why expanded unemployment is
important. That is why something like the Creative Economy
Revitalization Act which would give money directly to arts
workers to apply their trade and bring them into the public
sphere and make festivals and murals and public works of Art
and the Arts education for All Act. There are so many things
that are in front of Congress right now that would help so many
of those people that have fallen through. And I was embarrassed
that it slipped my mind. Of course, the arts workers themselves
are the most important people that have kind of been left out
of the equation.
Ms. CHU. The gentleman's time has expired.
And we have now reached to the end of our Member questions.
So I will now do my closing statement.
I want to thank our panel again for being here today. Your
stories of preserving through the pandemic demonstrate the
resilience and fortitude of your industry. But it is very clear
that you still face many challenges today.
For our economy to fully recover, we must work together to
overcome the hardships and challenges facing the creative
economy. Unfortunately, we cannot reverse the damage overnight.
It will take sustained support and investment to bring these
businesses back to where they once were. We must work together
to advance policies that drive recovery in the near-term and
pave the way for future success. The American Creative Economy
is one of our most significant resources and we cannot afford
to leave it behind.
With that, I would ask unanimous consent that Members have
5 legislative days to submit statements and supporting
materials for the record.
Without objection, so ordered.
And if there is no further business to come before the
Committee, we are adjourned. Thank you.
[Whereupon, at 12:03 p.m., the committee was adjourned.]
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