Adopted by the 2000 Session of the General Assembly, HJR 285 establishes a 10-member commission (five members of the House of Delegates, three members of the Senate, and two citizen members) to study the feasibility and appropriateness of creating public-private partnerships for the operation of nonstate museums and other educational and cultural entities in the Commonwealth.

In conducting its study, the commission is to examine:

(i) public-private partnerships in other states;
(ii) the feasibility and appropriateness of implementing any such partnerships in the Commonwealth on a pilot project basis;
(iii) current state and nonstate museum funding and operational practices; and
(iv) such other issues as it deems appropriate.

In addition, the commission may want to explore other concepts, such as any relevant constitutional, financial, and policy issues regarding the creation of "hybrid" public-private cultural entities through the transformation of existing private institutions or through the establishment of new entities; the governance and funding of existing public-private state entities in the Commonwealth; and appropriate revenue sources for nonstate or "hybrid" agencies. The commission is to complete its work in time to submit its written findings and recommendations to the Governor and the 2001 Session of the General Assembly.

STATE FUNDING FOR MUSEUMS: ENSURING ACCOUNTABILITY AND CONSISTENCY

A variety of public sources supplement private donations to nonstate museums nationwide. Federal support may be derived indirectly through tax deductions and other benefits or directly through government agencies such as the National Endowment for the Arts (NEA). The states themselves model their support of these institutions similarly; tax deductions and appropriations -- whether funneled through a state arts agency or directly to the institution -- support countless private educational and cultural entities. Designated revenue streams provide additional stability for this funding in some states. In New Jersey, the Educational Research and Museum Development Act supports not only the development of public museums, but their nonprofit counterparts as well. The Colorado General Assembly authorized the creation of a special tax district in the Denver area and created a sales tax of 0.1 percent. Cultural trusts have been created in several states, including Missouri and Texas.

SUPPORTING NONSTATE CULTURAL AND EDUCATIONAL INSTITUTIONS IN VIRGINIA

Virginia's longstanding commitment to supporting the multi-faceted missions of its educational and cultural institutions is evidenced by many legislative and executive branch initiatives spanning the past two decades. Direct appropriations to nonstate museums, legislative enactments and studies, tax credits and exemptions, and funding from the Virginia Commission for the Arts, as well as specific study initiatives, have supported the missions of many nonstate cultural and educational institutions.

The past decade has witnessed renewed interest in state support for Virginia's nonstate cultural entities at the legislative and executive branch levels. In 1992, the Governor's Task Force on Promotion of the Arts reaffirmed support for the Commission for the Arts, articulating a state-funding goal of $1 per citizen for the Commission. In 1993, the General Assembly created a joint legislative study committee to "conduct a comprehensive study of educational museums and the appropriate level of public support to be provided to such institutions." (HJR 453) The study continued for two additional years, and its legislation creating the Virginia Educational and Cultural Entities Fund was carried over by the 1996 Session. Recommendations of a subsequent study committee were adopted in 1997, reaffirming the General Assembly's goal to appropriate one dollar per capita for the support of the Virginia Commission for the Arts and creating the Virginia Arts Foundation. Special license plates support this Foundation.

During the past 10 years, line item appropriations to nonstate agencies have continued to be a staple of the Commonwealth's budget. Appropriations to these entities must be supported by certification to the Secretary of Finance that cash or in-kind contributions are available to match equally all or part of the appropriation. This past Session, the General Assembly adopted a biennial budget appropriating $33,989,834 in general funds to nonstate agencies in 2000-2002. With limited exceptions, these applicant organizations must provide matching funds in the form of cash or in-kind contributions.

ISSUES FOR STUDY

Examination of public-private partnerships for the operation of nonstate museums and other educational and cultural entities in the Commonwealth necessitates consideration of a plethora of fiscal and policy issues. Perhaps warranting particular consideration are the creation and operation of several unique public-private collaborations, such as the Center for Innovative Technology, a nonstock corporation whose creation was authorized by the Innovative Technology Authority Act. The corporation shall "not be deemed to be a state or governmental agency, advisory agency, public body or agency or instrumentality" for purposes of various state procurement, personnel, and other statutes. Also worthy of consideration is the model presented by the Virginia Tourism Authority, a political subdivision of the Commonwealth that is empowered to "enter into agreements with public or private entities that provide participating funding to establish and operate tourism centers, funded jointly by the entity and the Authority...." Whether exploring the acquisition of existing museums, the creation of "hybrid" entities, or other unique public-private ventures, the committee may wish to examine any state constitutional debt requirements that may be implicated. Further, the adequacy of current state funding levels for nonstate museums and for the Virginia Commission for the Arts and the designation of a specific revenue source for nonstate educational entities may merit committee consideration.

During its study, the Commission sought the input of nonstate as well as state agency museums to identify current effective partnerships, funding needs, and other issues. Admission fees, memberships, earned income, facility rentals, shop sales, and food service sales have supported many nonstate museums and cultural entities. A variety of public-private partnerships among Virginia's cultural and educational entities enhance these resources. A Virginia Association of Museums' survey conducted in 1999 (193 of 400 museums responding) indicated that public sources--federal, state, and local--accounted for about 26 percent of funding ($61 million of $235 million). Private individual, foundation, and corporate contributions added another 14 percent to museum coffers. Earned income accounted for 60 percent of total revenues.

Stability of revenue sources remains a concern for museums nationwide, as does the method of procuring public funds; some entities rely on funds from state re-granting agencies, while others may be able to secure budget appropriations through legislative requests. This duality has prompted concern among some entities that funds may be awarded not necessarily on the basis of need or merit, but upon the relative influence of the particular legislator. Other issues of concern are fairness of access, accountability for funds, and the challenge of maintaining public access to museum programs and services, while setting appropriate admissions fees.

The Commission also received testimony regarding collaborations between state agency and nonstate agency museums. State support for and collaborations with nonstate museums amplify the cultural and educational resources available to Virginians; for example, the work of nonstate science centers in the Tidewater and Roanoke areas and state entities in Richmond, Danville, and Martinsville allows the Science Museum of Virginia to address underserved areas in Northern Virginia, the Blue Ridge, and Bristol.

Funding fluctuations can cripple programming and contribute to staff attrition in state agency museums as well. Offered as suggestions for increasing accountability in museum funding were (i) using state museums as peer review agencies to assist in oversight and liaison efforts; (ii) distinguishing between annual, recurring state grants and one-time appropriations (possibly differentiating between funding for operations and funding for capital projects and identifying those entities relying on each type of grant); and (iii) considering how the particular nonstate entity requesting funds supports state initiatives, such as the Standards of Learning.

Other state support for nonstate museums is largely undocumented, but may include consulting services, joint programming, exhibit fabrication, educational materials, website hosting, and traveling exhibits. In Virginia, public-private collaborations include the Virginia Association of Museums, the Richmond Council of Museum Directors, the Virginia Aviation History Trail, and the Museums on the Boulevard (MOB) (Maymont, Virginia Museum of Fine Arts (VMFA), Virginia Historical Society, Virginia Department of Historic Resources, Children's Museum of Richmond, Science Museum of Virginia, and Lewis Ginter Botanical Garden). Commission discussion also focused on capping the state contribution to any nonstate agency operating budget to encourage continued diversification in funding sources and examining state policy regarding recurring applications.