Several states have adopted
legislation authorizing the use of special tax districts. Several examples are included below.
In 1988, in the face of a regional recession and loss of state and local funding for major cultural institutions, voters in the Denver metro area approved a Scientific & Cultural Facilities District (SCFD).
The goal of SCFD is to "democratize culture" by providing children, people with disabilities, seniors and those below the poverty level access to the region's arts and science institutions. Throughout the year, Denver's museums, botanic gardens, zoo, and performing arts center hold "Free Days." Various organizations offer educational outreach to school children. The fund also supports small art centers and community groups.
Not only have millions enjoyed the cultural and scientific offerings supported by SCFD, but their participation has created a boon to the local economy. In 2005, 14 million individuals attended cultural events in Denver. Among them were 2.4 million visitors from outside the Denver metro area. Altogether, their activities generated $1.4 billion in economic activity, including $387 million in "new" moneyâ€”from tourism, federal government grants and capital spending.
The cultural and scientific institutions have also contributed to local economic growth in other ways. With each passing year since 1988, they contributed more and more money in tax revenues and created more jobs. In 1997, the sector employed 4,700 people and paid $10.2 million in taxes. Nearly a decade later in 2005, the number of jobs more than doubled to 10,800 jobs, and the sector generated $16.3 million in taxes.
Since the establishment of SCFD, voters have elected to re-approve the fund twice. Most recently, in 2004, nearly two-thirds of 600,000 metro county residents supported extending the sales tax to 2018.
The SCFD encompasses seven metro counties and is funded by a voter approved sales tax of one penny per $10. These funds support a wide range of art, music, theater, dance, zoology, botany, natural history and cultural history organizations. In 2005, more than 300 nonprofit recipients received about $38 million. The sales tax generates about $40 million a year, and created $387 million in new "money" which represents a 10 to one return on sales tax investment.
In 1993, the Minnesota State Legislature enacted the Sales Tax Revitalization (STAR) program, a half-cent citywide sales tax to promote economic growth in St. Paul. While 40 percent of revenues from the tax would pay for the St. Paul Civic Center Complex, the St. Paul city council directed the rest of the funds to two new programs -- the Neighborhood and Cultural STAR programs. The STAR program received 10 percent for the arts and cultural sector. That amounts to about $1.5 million a year.
With the Cultural STAR new funds, the city built new facilities including the Science and Children's Museums, a band shell and the new headquarters of the Minnesota Public Radio. Jazz clubs, theater venues and public sculptures sprung up in the downtown area, and in neighborhoods throughout the City from a start-up theater group in one area to a new contemporary art gallery set in an old warehouse in another.
The flourishing of the arts and cultural sector proved a boon to the economy, drawing more than 5.6 million visitors to the city every year and adding over $623 million to its economy. Between 85 to 90 percent of those attending performances and museums in downtown come from outside St. Paul. As a result, new restaurants, bars and other retailers have opened to cater to this new population.
The Cultural STAR program dispenses the money through grants and loans to non-profit arts organizations, libraries, and museums. At least 80 percent of money must be distributed among non-profit organizations in St. Paul's downtown's Cultural District.
During the early 1990s, the city of Pittsburgh sought to establish an alternative to funding Allegheny County's arts, cultural and recreational activities. City leaders also hoped spread the responsibility for funding across the entire region's residents.
In 1993, the Pennsylvania legislature approved the creation of the Allegheny Regional Asset District (RAD). RAD funds libraries, parks, stadiums and arenas, and arts and culture. Almost 60 percent of the funds go to institutions that are free to the public. Nearly 15 million people visited the assets, with the zoo and botanical garden experiencing record attendance. Of those, nearly 800,000 were guests who might not otherwise be able to attend receiving free admission.
The RAD is funded by a one percent sales tax on a ten dollar purchase. Since 1995, RAD has invested $2.8 billion in the region.
St. Louis' Zoo-Museum District (ZMD) is the nation's oldest tax district. It was established in 1971 after the state legislature authorized the city of St. Louis and its surrounding suburbsâ€”which comprise the county of St. Louisâ€”to vote on a property tax to support the Zoo, the St. Louis Art Museum, and St. Louis Science Center. In 1983, voters confirmed their support of the ZMD when they added the Missouri Botanical Garden. Five years later, in 1988, they voted to include the Missouri History Museum in the District as well. There is no sunset clause on the district.
As required by enabling legislation, these museums and parks offer special discounts and free admission days to the public. In 2007, the Zoo had nearly 3 million visitors, nearly 900,000 people went to the Botanical Garden and a half-million people attended the art museum.
The District is funded by a voter approved property tax levy of up to eight cents per $100 assessed valuation for the zoo and the art museum and four cents per $100 assessed valuation for the science center. One year after its creation, the ZMD generated $4 million in tax revenues. Now, it generates $68 million. The funds contribute to the operating costs of the five institutions.
In 2007, the five cultural organizations generated $167 million in revenues and spurred $190 million in local economic activity. They employed 2,600 people, and their operations created an additional 1,800 jobs in other sectors of the economy.