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Newsom Signs Nonprofit Theater Bill

First published in the Oct. 1 print issue of the Burbank Leader.

The show will go on for many small theaters struggling to meet payroll costs. Senate Bill 1116, which seeks to create a payroll fund to support small nonprofit performing arts venues, was signed into law Thursday, Sept. 29 by Gov. Gavin Newsom. The effort comes at a time when small community theaters are struggling financially in the aftermath of the pandemic.
“I am ecstatic and grateful that Gov. Newsom recognized the importance of live performing arts in California. This vibrant community drives much of California’s creative economy. Despite strong community support, neighborhood theaters have suffered from under-investment and COVID-19 shutdown impacts,” state Sen. Anthony Portantino, author of SB 1116, said in a statement.
Prior to the pandemic, California ranked 28th in state arts funding per capita. This chronic long-term underfunding of the industry amounted to a double-hit when the pandemic shut down much of the live arts. Johns Hopkins University reports that, as of October 2021, the percentage of job losses at nonprofit arts organizations remains more than three times worse than the average of all nonprofits.
“This means all our tweets, social media posts, emails, and letters to the governor and other senators have paid off,” said Maria Gobetti, co-founder of the Victory Theatre Center in Burbank. “Great news for all small arts organizations who have suffered through the pandemic and who now have a chance for a future … Unfortunately, SB 1116 did not get into the budget this year so the next legislative year’s work is to get funding but we’ll have a program in place because of this law. The Victory Theatre celebrates.”
SB 1116 establishes a grant program designed to support live performances and workers directly by providing reimbursements of payroll expenses. This program will support jobs for anyone hired as an employee by a nonprofit theater, including both production and non-production employees and administrative staff.
“This bill is an important step forward for California’s live arts industry and the thousands of arts workers who have still not fully recovered from the COVID shutdown,” said Kate Shindle, President of Actors’ Equity Association. “In signing this bill, Gov. Newsom clearly understands that the live arts are a huge economic driver in communities across California. Our work is not over, as we must now secure funding for this program in the next session.”
According to a press statement from Portantino’s office, the grant program established by SB 1116 will be enacted immediately, hopefully preventing more closures and helping nonprofits grow quickly to self-sustainability. Grant funds will provide the greatest percent reimbursement to the smallest organizations. Since labor costs in the performing arts are relatively flat, these historically underfunded organizations are the hardest hit and most at risk. As small theaters grow, the percentage of payroll expenses that is reimbursed decreases as organizations are better able to absorb these costs. When a theater organization reaches $2 million in expenses, they graduate out of the program.
“Once funded, the Equitable Payroll Fund will save hundreds of vibrant theater, music and dance organizations that are currently in great jeopardy of shutting down,” said Martha Demson, Board President of the Theatre Producers of Southern California. “The investment will lead directly to thousands of jobs for artists; it will create access and a path to upward mobility for underrepresented creative workers; and it will ensure that our small nonprofit performing arts organizations remain an engine for economic growth and well-being in local communities.”

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