Arts Advocacy Update — FY2023 Budget, SVOG, ERTC, International Artistry
Biden-Harris Administration Releases its FY2023 Budget Request for Consideration by Congress; $203.55 Million for NEA
The Biden-Harris administration released its $5.8 trillion FY2023 budget request to Congress on March 28 to commence the FY2023 federal budget and appropriations processes. Both the U.S. House and Senate Budget Committees will consider the administration’s request when determining top-line numbers for potential funding of the federal government and its various agencies for the next fiscal year, starting October 1. The budget request proposes about $1.64 trillion in discretionary funding — $130 billion higher than the FY2022 enacted funding level — to provide more funding for the administration’s domestic priorities, including climate change and education.
Specifically, the administration is requesting $203.55 million for the National Endowment for the Arts (NEA), which is $2.55 million higher than its FY2022 request of $201 million. Currently, the NEA is funded at $180 million for FY2022. The FY2023 request document indicates that the federal agency will “build on operations to further incorporate the principles of racial equity, civil rights, racial justice, and equal opportunity, as reflected in Executive Order 13985, by engaging proactively with underserved communities, including those in rural America, through grant programs and national initiatives. In 2023, support will continue for Creative Forces: NEA Military Healing Arts Network, a partnership with the Departments of Defense and Veterans Affairs and the state and local arts agencies that seeks to improve the health, wellness, and quality of life for military and veteran populations exposed to trauma, as well as their families and caregivers. In 2023, the NEA will continue to implement programming funded by the $135 million provided in the American Rescue Plan.” Further information about NEA’s appropriations history can be found here. The NEA’s statement concerning the administration’s FY2023 request can be found here.
The administration is requesting $201 million for the National Endowment for the Humanities ($21 million higher than the FY2022-enacted funding level).
OPERA America will advocate for “at least 203.55 million” for the NEA before Congress to ensure that the federal agency continues to support the arts and cultural sector. The federal agency has been historically underfunded, and a significant increase is necessary to ensure equitable access to grantmaking opportunities, programs, and resources across the arts and cultural sector. OPERA America continues to collaborate on advocacy efforts with its partners across the arts and cultural sector and will provide specific opportunities for its members and interested stakeholders to engage their federal elected officials to urge support.
The U.S. Small Business Administration (SBA) continues to implement the $16 billion Shuttered Venue Operators Grant (SVOG) program, specifically the reconsideration 2.0 phase and the supplemental grant award 1.0 phase. OPERA America continues to meet with the SBA on a regular basis to receive updates and to share OPERA America members’ experiences and concerns. The SBA has awarded $14.25 billion to date. Here are the latest program progress report (as of March 21) and public data report (as of March 28).
The federal agency is transitioning to the program’s active grantee management phase, specifically assisting grantees as they expend their grant funding and submit financial reports to the federal agency. The SBA will be sending grantees an action item through the SVOG program portal on a rolling basis to submit final financial reports. This action item will be an opportunity for grantees to forecast and submit their expenditures. Please note that this will not be the only opportunity to submit expenditures. Grantees will have additional opportunities to amend or include additional expenditures in the future. The SBA released post-award guidance (as of February 28) and will also be releasing additional webinars for office hours to provide more technical assistance for grantees. The SBA held recent office hours in December concerning post-award compliance.
Below are specific aspects of the active grant management phase.
- Introducing Grants Management Specialists — The SBA will assign dedicated grants management specialists to serve as a single point of contact for the SVOG grantees once a grantee’s award has been finalized. This will enable the federal agency to provide enhanced customer support and continuity as grantees complete the remainder of the grant spending and closeout periods. Grants management specialists will be reaching out to grantees on a rolling basis over the next few weeks.
- Next Processing Steps: Expense Report Action Item — Once final budgets are approved by the SBA, the next step for grantees will be to complete their Expense Report Action Item.
- Grantees have the remainder of their grant term to prepare for this Action Item.
- Submitting the expense report will indicate that grantees have expended all funds and are ready to initial closeout.
- Instructional videos related to the upcoming Expense Report Action Item will be posted on SBA’s website during the week of April 4. Grantees are encouraged to review this information before completing their Expense Report Action Item.
- Office Hours: Expense Report, Closeout, and Information About Connecting with Grants Management Specialists — Separate sessions are designed to accommodate different schedules. The SBA recommends only attending one session, as the content will be the same across sessions. Sessions will also be recorded and archived on the SBA website.
OPERA America urges its members to continue to monitor their statuses on the SVOG program portal for any changes and to complete any pending action items. The SBA is directing grantees to reach out to the SVOG program team at SVOGApplicationInquiries@sba.gov for specific issues and concerns. Please direct any specific inquiries concerning the SVOG program to Tony Shivers, OPERA America's director of government affairs, at TShivers@operaamerica.org, if you are unable to resolve any issues directly with the SBA.
OPERA America continues to advocate for passage of bipartisan legislation — Save Our Stages Extension Act (H.R. 5429 and S. 2889) — to extend the time frame that SVOG grantees can expend their grants to cover their expenses to March 11, 2023. OPERA America is a national organizational supporter of the legislation.
The opera community can continue to leverage the benefits of the Employee Retention Tax Credit (ERTC) program for the 2020 taxable year and for the first three quarters of 2021. The ERTC program was extended and expanded for the 2021 taxable year under the $1.9 trillion American Rescue Plan Act of 2021 enacted in March. Employers, including tax-exempt organizations, are eligible for the credit if they have operated during calendar year 2020 and experienced either of the following:
- A partial or full suspension of their operations during any calendar quarter because of governmental orders limiting commerce, travel, or group meetings due to COVID-19, or
- A significant decline in gross receipts.
The credit applies to qualified wages (including certain health plan expenses) paid during this period or any calendar quarter in which operations were suspended. Employers can access the credit by reducing upcoming deposits or requesting an advance credit from the Internal Revenue Service. It is important to note that businesses and nonprofit organizations that received either a Paycheck Protection Program loan and/or a Shuttered Venue Operators Grant (SVOG) program grant can claim the ERTC.
Unfortunately, the fourth-quarter ERTC was eliminated to help pay for the $1.2 trillion Infrastructure Investment and Jobs Act of 2021 that was enacted in November 2021 to invest in the nation’s “traditional” infrastructure, including roads, bridges, utilities, ports, and broadband network. OPERA America continues to aggressively engage Congress and work with its partners across the arts and cultural sector and charitable nonprofit sector to reinstate the ERTC for the fourth quarter of 2021. There is bipartisan legislation in the U.S. House and Senate to reinstate the ERTC for the fourht quarter of 2021 — H.R. 6161 and S. 3625. OPERA America signed onto a signatory support letter sent to congressional leadership on September 1 by the charitable nonprofit sector to reinstate the ERTC for the fourth quarter of 2021 and extend the ERTC for 2022. OPERA America members can lean in with their voices, as well, with this Action Alert to urge their federal elected officials to pass this important legislation.
The U.S. House Ways and Means Committee held an Internal Revenue Service oversight hearing on Thursday, March 17 concerning the 2022 tax season. The virtual hearing is recorded and archived for those unable to attend live. The IRA Commissioner addressed the status of ERTC program implementation during the hearing.
OPERA America continues to engage Congress and the Biden-Harris administration concerning various international artistry issues impacting the ability of its members and the overall arts and cultural sector to bring international artists to the U.S. OPERA America is an active member of the Performing Arts Visa Working Group (PAVWG), which consists of other key partners within the arts and cultural sector, to address various issues with the U.S. Department of State and U.S. Department of Homeland Security. The working group sent a letter in May 2021 to U.S. Secretary of State Antony Blinken and a letter to U.S. Secretary of Homeland Security Alejandro Mayorkas in September 2021 urging that these federal agencies address specific issues concerning international artists. This remains a top priority as various opera companies resume their public performances and events in earnest as the nation moves beyond the current pandemic. The letters indicate that specific clarification is necessary to ensure that opportunities for the National Interest Exception are made equitably available to arts beneficiaries across all consular locations. Additionally, as consulates resume issuing visas, consideration should be given to the time- and date-specific nature of arts events. The working group also urges the State Department to provide flexibility for those artists who received visa approvals prior to the onset of COVID-19 and who now need to alter the dates for U.S.-based performances.
A reminder that OPERA America co-hosted a webinar in September 2021 to provide an update on U.S. artist visas and international travel during the current pandemic as presented by the Association of Performing Arts Professionals, League of America Orchestras, and Tamizdat. The webinar provided information on the process to secure U.S. artist visas, how to navigate current U.S. travel restrictions prior to the ease in restrictions effective this November, and what the current and long-term environment means for seeking more equitable opportunities to support international cultural activity. The webinar was recorded and is available here. The PAVWG is working with the U.S. Department of State and the U.S. Department of Homeland Security to provide additional webinars concerning the visa petition process and to solicit feedback later this spring and summer.
The opera community in the U.S. should note the current various traveling advisories concerning other countries. International travelers coming to the U.S. will be required to show proof of a negative COVID-19 test taken within one calendar day of their arrival flight. This requirement is also applicable to U.S. citizens and permanent residents.
The U.S. Department of State also announced an immediate expansion of its policy permitting U.S. consulates to waive in-person appointments/interviews for visa applications. This waiver allows qualified applicants to apply for their visa by mailing in their passport instead of appearing in person for an interview, though the DS-160 form and application fee would still be required. O and P international guest artists (as well as applicants for other classifications, including F and M students) may be eligible to apply for this in-person waiver under the following conditions:
- The artist has been issued a U.S. visa, in any visa category, at any time in the past;
- The artist has NOT been approved for a U.S. visa before but is a citizen of a country that participates in the Visa Waiver Program (VWP); and
- Has also traveled to the U.S. at least once before under ESTA (Electronic System for Travel Authorization).
In addition to the conditions above, applicants must have their visa petition already approved by USCIS by the time they submit their passport to a consulate. Furthermore, applicants must apply in their “country of nationality or residence.” Successful applicants will not have been refused a visa in the past unless such refusal was overcome or waived, and it is assumed that current waiver applicants will not have “apparent ineligibility or potential ineligibility.”
As always, consulates have a high level of discretion when implementing policies and may place limits based on staff capacity, so it is crucial to check with specific consular websites and read the guidelines for a particular location before proceeding. Please note that consulates are unable to guarantee visa processing times, so artists should consider their international travel schedules when deciding when and how to apply for their visas. For more information, please check the website of the desired U.S. embassy or consulate.
Further information concerning international artist issues can be found on the Artists from Abroad website.
Bipartisan legislation in the U.S House and Senate continues to receive additional support from individual representatives and senators to reinstate and extend the universal non-itemized charitable deduction for cash contributions. The bipartisan legislation, the Universal Giving Pandemic Response and Recovery Act (S. 618, H.R. 1704), would raise the $300/$600 cap on the 2021 deduction (expired December 31) to roughly $4,000 for individuals/$8,000 for joint filers, extend the availability of the deduction to the 2022 tax year, and eliminate the current exclusion of gifts to donor-advised funds. OPERA America is part of the Charitable Giving Coalition, which is working to build support for the legislation and to secure passage by Congress.
The House Ways and Means Committee unanimously approved the Securing a Strong Retirement Act of 2021 - Secure 2.0 (H.R. 2954), a retirement savings bill that includes a modified version of the Legacy IRA Act. The Legacy IRA Act would enable seniors to make tax-free contributions from their individual retirement accounts (IRA) to charitable nonprofits through life-income plans (charitable gift annuities or charitable remainder trusts) as a one-time qualified charitable distribution up to $50,000.
OPERA America continues to advocate before Congress and collaborate with its charitable nonprofit sector partners to enact this legislation. OPERA America is a signatory on support letters sent to congressional leadership by the charitable nonprofit sector urging support for this legislation and other legislation that will support the nonprofit during and beyond the current pandemic.
The U.S. Senate Finance Committee held a hearing on Thursday, March 17 titled "Examining Charitable Giving and Trends in the Nonprofit Sector." The virtual hearing is recorded and archived for those unable to watch live. Among the hearing witnesses is leadership from the Independent Sector, a national membership organization consisting of various national stakeholder organizations, including OPERA America. OPERA America will be submitting written testimony in support of bipartisan legislation introduced in the House and Senate that reinstates, extends, and expands federal incentives for charitable giving, including the Charitable Giving Tax Deduction Act (H.R. 1081) and the Universal Giving Pandemic Response and Recovery Act (S. 618, H.R. 1704).
Unfortunately, this bipartisan legislation introduced in the House and Senate were not included in the recently-passed FY2022 omnibus appropriations bill (H.R. 2471) that funds various federal agencies until the remainder of FY2022, ending September 30, 2022, after significant collaborative advocacy efforts across the arts and cultural sector and nonprofit sector. OPERA America is encouraging its members and interested stakeholders to communicate with their federal elected officials using this Action Alert to urge passage of legislation to provide federal incentives for charitable giving. The Charitable Giving Coalition also developed a one-pager to highlight the importance of charitable giving. The Coalition also sent a letter to U.S. Treasury Secretary Janet Yellen to urge additional tax relief.
A reminder that there are major pieces of legislation that benefit the overall arts and cultural sector for which OPERA America is urging passage during this session of Congress :
- Universal Giving Pandemic Response and Recovery Act — H.R. 1704/S.618 — Reinstates and expands universal non-itemized charitable deduction for cash contributions to $4,000 for individuals/$8,000 for joint filers.
- Employee Retention Tax Credit (ERTC) Reinstatement Act — H.R. 6161 — Senate companion bill is scheduled to be introduced on February 10. Reinstates the ERTC for the fourth quarter of 2021.
- Performing Artist Tax Parity Act of 2021 — H.R. 4750/S. 2872 — Modifies the tax deduction for the expenses of performing artists (including commissions paid to managers or agents) to provide for a phaseout of such deduction for taxpayers whose adjusted gross income exceeds $100,000 ($200,000 for joint return filers). The $100,000 phaseout threshold is adjusted for inflation annually for taxable years beginning after 2021.
- Save Our Stages Extension Act — H.R. 5429/S. 2889 — Extends to March 11, 2023, the time frame during which Shuttered Venue Operators Grant (SVOG) recipients may use grant funds to cover their expenses.
- Creative Economy Revitalization Act (CERA) — H.R. 5019/S. 2858 — Establishes a federal grant program geared toward workforce development of creative workers at the state and local levels.
- Work Opportunities and Resources to Keep Nonprofit Organizations Well (WORK NOW) Act — H.R. 1987/S. 740 — Supports nonprofit organizations so they can retain their employees, scale their service delivery, and put newly unemployed people back to work serving their communities.
- Promoting Local Arts and Creative Economy Workforce (PLACE) Act — H.R. 7487/S. 3232 — Bolsters local creative economies and empowers workers to find sustainable jobs in creative and cultural industries.
- Comprehensive Resources for Entrepreneurs in the Arts to Transform the Economy (CREATE) Act OF 2022 — H.R. 6381/S. 3521 — Establishes and expands support for the creative economy and art entrepreneurs.
- Arts Education for All Act — H.R. 5581 — Provides students greater access to various arts programs.
A reminder that the $1.9 trillion American Rescue Plan of 2021, enacted last March, provides $350 billion for eligible state, local, territorial, and tribal governments to respond to the current pandemic and to preserve jobs. It is important to note that the enacted law also allows governors to provide economic support to those hardest-hit industries within their states.
It is important for OPERA America members and interested stakeholders to engage their state and local elected officials to ensure that sufficient federal funding is provided to the arts and cultural sector, including state arts agencies, regional arts organizations, local arts communities, and individual arts-related businesses and nonprofit organizations. Advocates have important data and other information at their disposal from the National Endowment for the Arts and U.S. Department of Commerce. Further information, including state and local allocations, can be found on the U.S. Department of Treasury website. The National Conference of State Legislatures is tracking state actions with their federal share of pandemic relief, including investments in arts, culture, and tourism. The National League of Cities is tracking local actions concerning federal pandemic relief.
Please allow OPERA America to be a resource concerning advocacy efforts at all levels. Questions can be directed to Tony Shivers, OPERA America's director of government affairs, at TShivers@operaamerica.org.