Meeting of the Board of Regents | June 2007

SUMMARY

Issue for Discussion

                The Cultural Education Account, which supports all of the Office of Cultural Education’s institutions, may soon be at the limit of its capacity to support the needs of the programs and collections.

Reason(s) for Consideration

              An understanding of the status of the key funding source for cultural education programs will help the Regents advise the Office of Cultural Education on how to address future funding needs.

Proposed Handling

The June 2007 meeting of the Cultural Education Committee in its trusteeship role will briefly review the financial status of the Cultural Education Account. 

Procedural History

Reports on revenue supporting the cultural education programs have been presented at previous meetings of the committee.

Background Information

                The Cultural Education Account was created by statute in 2002 and all OCE functions previously supported by State General Fund operations appropriations were transferred to this funding source.  It now provides the majority of operational funding for the State Museum, all of the funding for the Office of Public Broadcasting and Educational Television, and a substantial portion of the funding for the State Archives and the State Library, including the book budget.  In establishing the Cultural Education Account, the Legislature followed the successful model of the Local Government Records Management Improvement Fund (LGRMIF) which had provided a steady stream of funding for local government grants and related operations since 1989.  LGRMIF is funded by collection of a county surcharge of $5.00 for recording, entering, indexing, or endorsing a certificate on any instrument or for assigning an index number to actions pending in County or Supreme Court.  The 2002 statutory change kept the LGRMIF charge in place and applied an additional $15.00 surcharge to support the new Cultural Education Account.  Counties retain $.25 of each LGRMIF surcharge and $.75 of each Cultural Education Account surcharge to defray their collection expenses.

Annual revenue rose to an all-time peak in 2003 -2004 and has declined by more than 12% since then as a result of changes in market conditions.  At the same time, expenses have risen and several annual revenue transfers to support other non-OCE programs have also been increased.  The direct funding of the gallery renewal project with $20 million from this fund and the transfer of an additional $20 million for the collection stewardship facility project will drain almost the entire cash surplus that was accumulated in the fund during high revenue periods.

Recommendation

The Regents should direct the Department to consider alternative methods of funding cultural education program and collection requirements.

Timetable for Implementation

              As soon as practicable.