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activity of the highest quality. Television is the best way to bring

this kind of activity to a widening audience of Americans, and a further

allocation of additional Endowment resources into television programming

is among the highest priorities of the National Council on the Arts.

It

is clearly indicated that exposure on television builds audiences and

revenues for performing arts companies. Presentations are planned in

the visual arts, architecture and design, and jazz.

* Music. There is an increase recommended for the Music Program largely

to support and encourage institutions. Some of the increase will go to

support additional symphony orchestras eligible for support under new

Endowment procedures.

In addition, choral groups, chamber and contemporary

ensembles, featuring the work of American composers, and jazz, our

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indigenous American art, would receive substantial new support.

I would also want to mention to the Committee a new initiative in our

Federal-State Partnership Program.

As you know, the Endowment, by law,

provides 20 percent of its program funds to the states and eligible

territories.

But it is my conviction that the Federal-State Partnership

should be strengthened as much as possible. This year, therefore, we

adopted a plan that provides states additional money based on need and

the quality of the application. We are pleased with the effectiveness of this plan and are allocating some additional funds in FY '80 for the Federal-State Partnership Program beyond the required 20 percent.

Mr. Chairman, for Fiscal Year 1980, we are requesting $26,900,000 for

our Challenge Grant Program, the slight decrease reflecting a realignment of accounts and the increase in Treasury Funds discussed earlier. We

continue to be extremely gratified at this innovative effort which seeks to strengthen the financial and administrative capacity of the Nation's cultural institutions while encouraging new commitment to the arts from a variety of non-Federal sources.

Appropriations totalling $57 million have thus far been made as Challenge Grants to 161 applicants benefitting 206 cultural institutions applicants represent consortia of institutions. Thus far, more than

same

$124,000,000 has been raised in new and increased funding for the applicant

institutions. It is already clear that grantees are well ahead of

schedule in raising the non-Federal support unique to this program.

We are already in the middle of the painstaking process of evaluating

and ranking the applications for the third round of the Challenge

Program. As in previous rounds, the number of worthy applications will

far exceed the resources of our request.

I want, Mr. Chairman, to make a special plea for our administrative

budget. The ongoing daily work of the Endowment is carried out by a very dedicated staff, but one whose capacity is now severely stretched.

Should the Congress grant the request now before it, the Arts Endowment's

non-administrative funds will have grown by 81 percent in the past five

years (1976-1980) while administrative funds will have increased by a

far smaller ratio

26 percent.

In comparative terms, in Fiscal Year

1976, administrative support, as a percentage of the total budget, was

9.5 percent. The proposed administrative budget of $10.5 million represents

6.8 percent of the total of the $154.4 million request we seek today.

We point this out with pride because it shows dramatically the increased

efficiency of our staff and procedures. However, it also indicates that

the increase in administrative funds requested for FY '80 can be well

justified. In fact, the increase of $725,000 in administrative funds we

are requesting is indeed a most urgent matter which we bring to your

attention today.

The steps we are taking internally to strengthen our own administrative capacity and to further insure the integrity of the application and grant-making processes are reviewed in detail in the budget submission.

In order to insure timely and effective uses of the funds available to

support the arts; to maximize the impact of these funds; and, most importantly, to insure as much as humanly possible that what is funded

is of excellent caliber and fairly judged, adequate support for the

administrative functions of the Endowment simply must be provided.

Therefore, and in particular, we respectively ask favorable consideration

by the Committee of our full request for $10.5 million in administrative

funds.

Finally, Mr. Chairman, I would like to turn for a moment to a discussion

of the Endowment's support for museums and the larger question of Federal

support in the aggregate.

During the Endowment's last reauthorization, the Congress established

the Institute of Museum Services. Unlike the two Endowments, the Institute

is authorized to provide basic operating support to the whole range of

museums in the country. The Congress set up the Institute as a result

of the extraordinary day-to-day financial needs of the Nation's museums

and, in fact, made clear the help provided by the Institute was in no

way to supplant project aid from the Arts Endowment or from the Humanities

Endowment.

As you know, Mr. Chairman, I am one who believes that there is a virtue

in having a variety of sources of support within the Federal government

for the Nation's museums, so long as the funding sources are serving

separate needs or separate constituencies.

It is, therefore, important

that the purposes and definitions of each funding agency be as clear as

possible. This is a concern voiced by the Committee, that we share with

you. With you, we wish to avoid overlap of funding and duplication of

effort.

While the Endonment's authorizing statute enables the Endowment to make

grants for specific projects to the whole universe of museums, nonethe

less, the general orientation of the Endowment is to support projects of

an artistic nature. As such, the predominant number of applications received by the Museum Program are from art museums or from other

museums sponsoring projects of an artistic nature. I might add that,

predominantly, history museums have tended to apply to the Humanities

Endowment, while science museums have frequently attempted to obtain

support from the National Science Foundation.

What has been at work, then, is a process of natural choice among the

Nation's museums,

with art museums generally applying to the Arts Endow

ment for project support.

To make what has been a natural, but informal process, more regularized,

the Federal Council on the Arts and the Humanities has been at work

evolving a system that more clearly defines the bounds of support of

each funding agency. Applicants to any Federal funding source are now

required to disclose whether they are applying to another Federal funder. Should such instances arise, the agencies judge whether the applicant

museum is seeking funds from two sources for the same purpose, thus

preventing "double funding."

We would anticipate that in the case of the Arts Endowment, the parameters

of our support would be drawn somewhat more tightly than they are now. Specifically, we are planning to confine our museum funding to art

museums and other museums whose projects are artistic in nature.

Further,

after the present round of Challenge Grants, we are planning to limit

Arts Endowment's Challenge Grants solely to art museums.

We would not

expect these changes to seriously alter the make-up of museum applications to the Arts Endowment. Rather, we believe they will sharpen the focus

of our areas of responsibility.

Mr. Chairman, the request we present to you today for Fiscal Year 1980

is an important one.

It will enable the Endowment to maintain our

programming at an effective level while moving forward in key areas of

concern to address critical problems and new opportunities. In the past year, we have sought to make the Endowment increasingly responsive to

the rapidly growing needs it serves.

We have broadened the work of the

National Council, strengthened our panel system of peer review of appli

cations, given careful attention to minority concerns, worked to build a lasting partnership with state arts agencies and to stimulate added nonFederal arts support. We believe that forward momentum is of vital

consequence to this program, a momentum which can serve as an example to

all sources of assistance.

We urge the Canmittee's favorable consideration

of our request.

I shall be happy to answer any questions.

GENERAL EXPLANATION OF INCREASE

Mr. BIDDLE. Thank you. I would like to introduce the three Deputy Chairmen of the Endowment.

On my left is David Searles, who is Deputy Chairman for Policy and Planning. On my right is Mary Ann Tighe, who is the Deputy Chairman for different programs. And on our right, further down, is James Edgy, who is the Deputy Chairman for Intergovernmental Affairs.

That includes relationships with the various State agencies.

As you have said, Mr. Chairman, the budget we are presenting today is $154.4 million, an increase of approximately $5 million over this current fiscal year, or an increase of approximately 3 percent.

But I would like to highlight that figure by saying that we feel it represents a momentum forward, and that that momentum, even in the terms of the 3 percent increase, is of the most vital importance to this program, I believe.

THE TREASURY FUND

As you will note, the increase is in Treasury funds, which increase from $7.5 million to $20 million in the budget presentation, or a $12/2 million increase.

That increase offsets decreases in program moneys and in the Challenge Grant area. But overall, it is nearly a $5 million increase with an administrative increase included.

It is the administration's belief that in a year of fiscal restraint and budgetary limitations, maximum use of the Federal dollar is most desirable and, indeed, necessary.

And we wholeheartedly concur with this. And we feel that the administration of President Carter has made a strong commitment to this program in a time of budgetary restraints.

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