(Note: The following is an edited version of testimony delivered by Michael D. LaFaive, Mackinac Center director of Fiscal Policy, before the Michigan House Appropriations Subcommittee on History, Arts and Libraries on March 28, 2006.)

Thank you for inviting me to testify today.

I am director of the Morey Fiscal Policy Initiative with the Mackinac Center for Public Policy. As director, I am generally responsible for conducting research into any one of four major areas of public policy, including taxation and budget concerns. It was my work in these fields that recently led me to publish the essay, "Entertaining Art: To Tax or Not to Tax, That Is the Question."

Before I proceed, I want to make it clear at the outset that I very much enjoy what often falls under the definition of arts and culture. Art is an important element of culture, too important in my view to be denigrated by the kind of exhibitions at public expense that I wrote about. In a free society, what I wrote about should never be banned, but neither should taxpayers (few of whom would ever use their own money in this way) be forced to support it. At a time of fairly serious budget constraints, surely what I wrote about cannot be regarded as a high priority, but more importantly it underscores the importance of art being 1) subjective and 2) a function of civil society, free association, private enterprise, and not of government.

With that being said, allow me to provide a brief history of my budget work and what led me to write "Entertaining Art."

In my position, I have often been called upon to examine the budgets of virtually every unit of government: state budgets, local budgets and school district budgets just to name three. In the past four years, I have been a coauthor for two full state of Michigan budget studies, which you may have read in the past. It is work like this that draws me deep into budget line items, including the Michigan Council for Arts and Cultural Affairs line item, of which I am sure you are familiar.

Last year I looked down a list of grants issued through the MCACA for fiscal 2005 and chose from among them a number to explore further. The grantees included the Interlochen Center for the Arts "Arts, Education, Presentation and Outreach" ($80,000); the Performance Network of Ann Arbor "Professional Season" ($26,100); and the $17,400 grant to the Ann Arbor Film Festival. I took the liberty of ordering from the Department of History, Arts and Libraries the grant applications in the hope of learning more about exactly how the money is used.

Despite the fact that the grant applications were very lengthy (often 45-50 pages), we had few concrete examples of what state tax dollars were actually supporting. That is when my colleague, Daniel Smith, and I discovered the Ann Arbor Film Festival Web page and an archived list of past movie titles. This made our research much easier, so we focused on the AAFF. I began using AAFF films in speeches to highlight the subjective nature of art.

Then, last February, state Sen. Shirley Johnson introduced a proposal to impose a 5 percent excise tax on various entertainment events. I knew that the materials I had collected about AAFF would make for an intriguing interactive, Web-based essay, which I published without fanfare on the Mackinac Center Web site two weeks ago today (March 14, 2006).

I want to stress that the thesis of the essay was about Sen. Johnson’s proposal, not about the Ann Arbor Film Festival per se, and that I am fully aware that the films themselves were not subsidized. It was the festival that promoted them that got state subsidies. Moreover, the artworks I highlighted in my paper were designed to underscore one of four points about why government should not be in the business of providing art subsidies at all, let alone to institutions that promote work many may find objectionable.

This brings me to some of the art highlighted in past film festivals. Before I proceed, I need to know whether or not this subcommittee wants me to show the clips of work that are linked to my article, or should I just describe them?

  • "Chests," an experimental short film showing two men repeatedly bumping their bare chests together. The two-and-a-half-minute film is shot from the waists up and the necks down. The artist refused to let me post a video of her work on our Web site because she supports subsidies and didn’t want me to use her film to make the case against them.

  • "No American Dream," a longer feature and autobiographical in nature. It was a video diary of the director’s months in the United States while marketing a previous documentary called, "Sexjunkie." The filmmaker notes that "the desperate search for the American Dream increasingly turns into a race against time to get at least one good [expletive deleted] in New York."

  • "What is it?" is a movie by Crispin Hellion Glover. Glover is best known for his portrayal of George McFly in the 1985 blockbuster movie, "Back to the Future."

  • The "Sex Workers Art Show" included live performances from people who work in the sex industry, including, among other performers, "Miss Exotic World 2003, the Diva of Danger Miss Satanica and author of ‘I Was a Teenage Dominatrix.’"

  • "America’s Biggest *ick" featuring Dick Cheney speaking at the Republican National Convention. The film short lays an audio track from Al Pacino’s Scarface over Cheney’s actual words

Films shown in previous years at the AAFF included such titles as "Relish," described as "an experimental short aroused by my experience as a teenager diagnosed with obsessive-compulsive disorder. It is an exploration into a world of hand washing, strange eating habits, and excessive sexual desires."

While I was unable to obtain the following works for our site, I did make a point of attending the 2006 Ann Arbor Film Festival last week and sat through a full days showing of movies. In my opinion, some clips were terrific, entertaining, artistic and worthy of my voluntary support; including a wonderful animation put together by 7th graders here in Michigan. Others were either inane or (in the case of an animation about world economics) ignorant and openly hostile to the very market system that makes it possible for the arts to be supported and/or taxed.

But, as with past festivals, the 2006 Ann Arbor Film Festival contained its share of work that many might define as obscene, if not pornographic. For example:

  • The animated short "Tampon Tragedy" was a film about a pair of scissors that chases a tampon around snipping away its parts until the tampon succumbs to a final cut in a tragic and bloody end.

  • "Proteus" was a two-hour prison movie containing about five or six explicit sex scenes that I suspect most objective observers would consider pornographic. I purchased a copy to share with you today, but it has not yet arrived by mail. If you like, I can send you the copy when it arrives and let you be the judge: Is it art?

Even if you do believe it is art — and art worthy of being shown at a state-subsidized festival — its presentation probably violated state rules. Last week, MIRS covered the story of Rep. Leon Drolet’s news release about the festival. They were told by History, Arts and Libraries Director Bill Anderson that (quoting MIRS, not Anderson) the "HAL budget requires all festivals taking MCACA money to sign paperwork pledging that none of their films include displays of human waste on religious symbols, sex acts or U.S. Flag destruction." That’s true.

He is referring to Section 401 (3) of the budget boilerplate language, which actually states: "The MCACA shall not award grants for projects or activities that include …"

The question we must ask is how are HAL officials to know that any grant recipient is being up front about their use of state resources? The MCACA line item distributes money to over 300 grantees. It is reasonable to assume that more than one recipient has or intends to violate any promise made to HAL bureaucrats on the grounds that it is easy to do so. This seemed like such an obvious problem to me that I wrote about it in my original essay. In fact, I said:

One possible reason legislators may have approved such arts spending is because they may have been unaware of its existence. During the appropriations process, legislators frequently don’t vote for a particular line item within a department’s budget. The grant to AAFF is just one of about 300 doled out to arts- and culture-related organizations across the state. It is even possible that Department of History, Arts and Libraries bureaucrats overseeing the program don’t know how the money is used. The AAFF grant application, for example, speaks only of "avant-garde" and experimental films, not cinematic themes that include gay rodeos ("Steers and Queers") and the "Warhol Transvestite Superstar Jackie Curtis."

I could sit here all day and talk about art that might offend one person and not another, but we need not focus on fringe filmmakers showing their wares at a state subsidized festival. If the AAFF did nothing but show G-rated Disney films and "The Sound of Music," I would still be here to explain that subsidies for the festival were unacceptable.

The Mackinac Center has been weighing in on art subsidies for years and we have used many different arts-and-culture vehicles for explaining our opposition. These included everything from the works of Ernest Hemingway to the Detroit Symphony Orchestra and cinematic blockbusters such as "Ernest Goes to Camp." We have also highlighted the Motor City Madman, Ted Nugent.

Regardless of the examples we use, our arguments have always been the same: state arts subsidies are unnecessary and unfair. Even if they could be justified on those grounds, art is probably too subjective for anyone to define. There is no reason anyone should be forced to subsidize what a tiny arts elite in Lansing defines as art and defines as worthy of tax support.

Thank you for your time and I will now be happy to field any questions you may have.

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Michael D. LaFaive is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.