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Detroit Institute of Arts Fights for Survival with a Local Tax

by Jillian Steinhauer on August 3, 2012

Detroit Institute of Arts

The Detroit Institute of Arts (photo by Colin Darke)

This coming Tuesday, August 7, voters in the Metro Detroit area will decide not just the outcome of the usual political races, but also the future of the area’s beloved art museum, the Detroit Institute of Arts.

The DIA, which has been struggling financially for years, has proposed a 10-year millage (tax) on homeowners in three counties, Wayne, Oakland and Macomb. A recent poll shows that 7 out of 10 voters in the election support the millage, but the fight over it represents an ongoing larger battle in this country about how we fund the arts.

The story of the millage actually begins in the 1990s, when both city and state funding for the museum began to dwindle. From its founding in 1893, the museum had been supported at least in part by public funds, but increased economic troubles in Michigan led to a lessening, and eventual drying up, of that money. Today, even though its art collection is owned by the city of Detroit, the DIA doesn’t receive any funds from the state, city or county.

For decades, then, the museum has relied on fundraising and private money, and it’s done a remarkably good job. According to Mark Stryker, writing in the Detroit Free Press, the museum has raised $321 million in the 20 years since its public funding disappeared. But, as Stryker explains, “most of it covered the operating gaps left by the state cuts.”

He continues:

If even $200 million had gone instead to building the endowment — an investment fund that seeds the bottom line — it would mean an extra $10 million a year for operations (per a standard 5% draw), and there would be no need for a millage. Responsible nonprofits don’t spend endowment principal on operations because it burns through the nest egg, leaving nothing to provide for the future.

The DIA knows the private fundraising model isn’t sustainable; according to Annmarie Erickson, the museum’s COO, who spoke with Hyperallergic about the millage, they’ve known for years. “It was really kind of a long, slow march to a millage campaign,” Erickson said. After the museum renovated its building in 2007, “we took deep breath and thought, now the next step is to collect our financial model, because we knew we couldn’t continue to cope with dwindling government support and fundraising 2/3 of our operating budget every year,” said Erickson. (This even before the recession, in the wake of which the DIA reduced its budget, benefits and programs drastically.)

In 2008, the Detroit Zoo passed a similar, successful millage. DIA leadership actually wanted to combine forces with the zoo at that time to levy the millage together, but the zoo wasn’t interested. So the museum waited. “We knew there had to be some breathing room between the zoo’s ask and our ask,” Erickson said.

The proposed tax on the upcoming August 7 ballot levies .2 mil on homeowners in the three counties for the next ten years. That amounts to $15 a year for a homeowner whose house is valued at $150,000. The museum estimates it will bring in $23 million a year. In return, all residents in the participating counties will receive free unlimited general admission, including for students on field trips.

There are some outspoken opponents of the millage, who ask why taxpayers should be funding a public museum and are suspicious of the museum’s leadership misusing the money. Some argue that if the DIA has done so well fundraising thus far, it should be able to continue doing so. And despite the free admission offer, many opponents argue that the taxpayers won’t receive any tangible benefits from the milllage. “In return for giving DIA at least 230 million dollars Tri County residents will get practically nothing,” wrote a Bloomfield Hills resident in a letter to the editor of the Bloomfield–Bloomfield Hills Patch.

One of Diego Rivera's "Detroit Industry" murals at the DIA

One of Diego Rivera’s “Detroit Industry” murals at the DIA (photo by the author)

At heart, the question is how one defines “benefits.” Are the benefits of having a world-class, encyclopedic art museum easily and freely accessible, offering public and student programs, quantifiable in terms of monetary value? Is the public and artistic service that the DIA provides worth $15 a year to local homeowners? Hyperallergic contributor Colin Darke outlined for us some of the DIA’s achievements:

Among other leadership roles, it purchased the first paintings by a US Museum by Vincent van Gogh and Henri Matisse; commissioned the “Detroit Industry” mural — even though it was a politically unpopular move — by Diego Rivera (and he considered the mural his best work); it is the only encyclopedic fine arts museum to have a curatorial department dedicated solely to African American arts; and it continues to purchase significant contemporary art pieces.

In the long run, the museum hopes to use the millage to fund operations for the next ten years, which would meanwhile allow it to build up its unrestricted operating endowment. “Hopefully after 10 years we’ll no longer be dependent on millage or government funding,” Erickson said.

And if the millage doesn’t pass? According to Erickson:

We will not close our doors on August 8, however, we will have immediate meetings to begin reducing our budget further. We have contracts for two exhibitions, and we have determined that we will honor those contracts — it’s not fair to the museum and the individual artist. After that, I anticipate there would be a broad range of layoffs, we would cut programs further and we would begin compressing museum operations to as little they can be. Eventually that will run out too, and we will close.

That’s a bleak outlook for the future, and one that I hope Metro Detroit residents will choose to avoid on August 7.

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  • Colin Darke

    I am happy to report that the millage to save the DIA passed!

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