In Rhode Island, Size Often Matters… Even When It Comes to Cultural Districts

Posted by Mr. Randall Rosenbaum, Feb 06, 2015 0 comments

Size drives a lot of policy discussions in Rhode Island. We are, after all, a unit of measure. “That iceberg off the coast of Nova Scotia is about the size of Rhode Island.” But for Rhode Islanders we take pride in how our small state is an intimate place, and we discuss ways we can use that intimacy to our advantage.

Twenty-plus years ago we were one of the first states in the nation to establish cultural districts in select communities. These districts had two distinct but complimentary goals: the first was to attract an art-buying (and money-spending) public, and the second was to encourage artists to live and work in areas that would benefit greatly from their presence.

TAXFREE_LOGO_WHITEA creative use of the tax code helped us to advance both goals. The sale of art in any of the cultural districts was exempt from state sales tax, an effort to attract people to buy art and, while they’re at it, buy other stuff that WAS taxable. To encourage artists to populate these districts, and by their presence transform them, Rhode Island said that if you live and create work within one of these districts, not only could you sell that work tax-free, but any income you received from your work as an artist would be exempt from state personal income tax.

Both strategies worked, but in some instances not as well as we might have hoped. A number of galleries took advantage of the sales tax exemption, and new galleries sprung up, particularly in the tourist destinations of Providence and Newport. But given the way tourism works in Rhode Island, it was difficult to coordinate a message with the various tourism entities, and no one (not least of which, the state arts council) had the money to properly promote this tax-free art-buying opportunity.

Artists began to move into the arts districts and contribute to the revitalization of areas that were deliberately chosen as places where cultural vitality would contribute to community development. People noticed the changes. The New York Times, for example, featured an article on the rebirth of the west side of Providence thanks, in large part, to an artistic infusion. The City of Pawtucket designated an individual in their Planning Department as “the arts guy”, and he was responsible for working with artists and pairing them with developers, all of which resulted in positive growth through the arts. But other communities didn’t make a similar effort, and their districts did not show similar results.

In spite of it all, the cultural districts were incredibly popular, and each year bills were introduced in the Rhode Island General Assembly to create new districts. In February 2013 we held an “Arts Charrette” here in Rhode Island, an effort led by our Senate President, Teresa Paiva Weed, and were joined by our Governor and Speaker of the House to explore ways in which the arts could directly contribute to our state’s economic development efforts. Government and business leaders joined members of the arts community (two days after a major blizzard) to discuss a variety of strategies. Our recently-passed $35 million cultural facilities and historic preservation bond initiative emerged from the charrette discussions, as did proposals to expand arts education opportunities.

One of the suggestions from the gathering was a proposal to expand the cultural districts statewide and to use the sales tax exemption to attract an art-buying public to Rhode Island. It was introduced as a bill sponsored by the Speaker and the Senate President, and passed overwhelmingly by our General Assembly. It charged the State Arts Council with managing this initiative, and gave us the ability to work with the tourism community to promote the program and (importantly) the State Division of Taxation to track its success.

The program took effect in December 2013, and we’re just now working with the Division of Taxation on gathering a set of baseline information for our first report to the General Assembly. After one year we have approved close to 800 artists and galleries for the exemption, with more applications coming in weekly. And this doesn’t count the many artists, some from outside our state, that take advantage of the sales tax exemption for art by selling work at one of our many arts festivals and fairs under an exemption through the festival promoter’s license.

We’re still cash-poor on the promotion side, and need to be doing much more to attract people to our state through this program. But our new governor considers tourism a priority, so we’re optimistic that this can become a centerpiece of a “Buy Rhode Island” initiative.

For now, we’re excited by all the potential that these initiatives provide. We look at Rhode Island not as a series of cultural districts acting as isolated pockets of art, but work to promote our entire state as a destination for art and culture.

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