Maryland legislative leaders called on Gov. Larry Hogan Friday to release $1.6 million in funding set aside for the Baltimore Symphony Orchestra — even as they criticized orchestra management for failing to disclose earlier the depth of the organization’s financial problems.
A day after the symphony abruptly canceled its summer concert series and said it would move to cut musicians’ pay and vacation time, leaders in the legislature said they wanted answers from both orchestra management and the governor.
“The BSO is important not only to the city, but to the region,” said House of Delegates Speaker Adrienne A. Jones, a Baltimore County Democrat. “I would hope the governor would release the funds.”
The Maryland General Assembly this year passed a bill sponsored by Del. Maggie McIntosh, a Baltimore Democrat, that would award the orchestra an additional $3.2 million in state funding for the next two fiscal years amid its fiscal difficulties. Orchestra officials were hoping they could use the money to secure a bank loan to pay the musicians over the next few months.
The money for the BSO is part of nearly $300 million in funds the Democratic-controlled legislature “fenced off” this session for its priorities, including $127 million for school construction. Hogan has discretion to either spend that money on the initiatives selected by the legislature or keep it in state coffers.
Other fenced off items include: $3.5 million to test rape kits; $1 million for Baltimore’s YouthWorks program, and $7 million for technology updates at the Baltimore Police Department.
While deciding what to do with the “fenced off” funds, the Hogan administration is considering projections that the state will face a $961 million deficit in the next fiscal year. Administration officials argue the restricted money could be needed if the economic forecast does not improve.
Mike Ricci, a spokesman for Hogan, noted the BSO is the largest single recipient of the Maryland State Arts Council grants program. Between fiscal years 2016 and 2019, the orchestra received $8.7 million in state funding.
Ricci also said state officials are in discussions with the BSO to provide a $1 million bridge loan to the organization.
"Governor Hogan is a great supporter of the BSO, which receives more grant money from the state than any arts organization,” Ricci said. “In addition, we provided a bonus grant to the BSO last year, we are currently in active discussions about a bridge loan, and we are reviewing the funding that was fenced off by the legislature."
House Republican leaders wrote a letter Friday to Hogan, arguing he should withhold the funding until the BSO gets its fiscal house in order.
"While we all appreciated the history and importance of the BSO, and want to see it thrive, the state cannot throw taxpayer money at the problem,” said House Minority Leader Del. Nic Kipke of Anne Arundel County. “There is clearly a serious problem within the BSO and that needs to be addressed before any more funding is provided by the state."
The Republicans noted that the state has spent $100 million for the construction and renovation of the Strathmore performing arts center in Montgomery County, whose primary tenant is the BSO.
"That the BSO could still lose millions of dollars even while being supplemented by taxpayer dollars leads us to believe we must now tread carefully when considering investing additional taxpayer dollars," said House Minority Whip Del. Kathy Szeliga of Baltimore County.
Sen. Antonio Hayes, a Democrat who is chairman of the Baltimore’s Senate delegation, said he believed if Hogan could come through with money, he could help the orchestra immensely.
“The governor could be a real hero if he acted fast and they reversed the decision to cancel the summer season,” Hayes said. “I would hope the governor would be in line with the legislature. It’s a chance for him to save this important cultural opportunity for the city of Baltimore and the region.”
Baltimore County Executive Johnny Olszewski Jr. wrote on social media that the county is “already actively working to get the popular summer spectacular back on the books for this July here in #BaltimoreCounty.”
Spokesman T.J. Smith said Sunday that Olszewski was not referring to any specific plans, but that the county is looking at alternative means of funding to aid the orchestra.
Del. Cheryl Glenn, a Democrat who is chairwoman of Baltimore’s House delegation, said she was disappointed to learn that Hogan was considering not releasing the money.
Governor Larry Hogan is expected to sign a bill granting an additional $3.2 million to the Baltimore Symphony Orchestra for the next two years — a potentially crucial step towards resolving a contentious labor dispute and allowing the the organization to remain a 52-week ensemble.
The Baltimore Sun obtained financial documents showing the orchestra’s fiscal health is in dire straits. Even factoring in additional state funding, the orchestra is projected to barely make payroll in July and August, according to cash forecasts for a 52-week season.
The BSO’s CEO Peter Kjome said in an interview Friday the orchestra’s deficit is due to a number of factors. He said increased ticket sales, charitable donations and government grants or a larger endowment could help bolster revenues. But he argued expenses — such as nine weeks of paid vacation time for musicians — also needed to shrink.
“In hindsight, we feel we could have shared more information over the years about the financial problems we’ve had,” Kjome said. “We wanted to present a summer season, as we typically do, but summer season has not proven to be financially viable.”
Kjome added that even if Hogan releases the money, it alone would not solve the BSO’s fiscal problems. The organization needs to grow its endowment by about $40 million to be sustainable, he said.
Part of the legislature’s bill this year created a task force to come up with recommendations to bolster the BSO’s long-term fiscal health.
BSO musicians released a statement Friday strongly criticizing management, while calling on Hogan to release the funding.
Maryland’s government now expects to receive hundreds of millions less in revenue than officials previously forecast, members of a state fiscal panel said. The Board of Revenue Estimates reports the state is expecting about $138 million less than anticipated for the fiscal year 2019 budget.
“It is a hallmark of truly great cities to have institutions that enrich the cultural landscape and keep the arts alive and flourishing for generations to come,” the musicians wrote. “A vital orchestra is just as essential to a thriving metropolitan area as museums, aquariums, theaters and stadiums.”
The musicians wrote that the cuts proposed by management — which need to be negotiated with the musicians — would result in 20 percent lower play for the performers.
“Now, we will be unemployed while the management that caused this debacle will go on collecting their paychecks,” they wrote. “The BSO’s president and CEO Peter Kjome and Board Chair Barbara Bozzuto have done all of this after stating publicly that they would not lock out the musicians. We find this disingenuous, unconscionable and irresponsible. We urge Governor Hogan to release the funds allocated in [McIntosh’s bill] with a provision that the BSO cannot lock out or impose cuts on the musicians and that senior management will not be paid if the musicians are not paid.”
Because of the organization’s financial woes, Bozzuto said the board felt forced to proceed with a plan to cut operations to 40 weeks per year.
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“We board members have the fiduciary responsibility to manage our funds wisely and prudently,” she said. “This is the last of our actions we’re taking to be solvent and fiscally responsible.”
She added that “orchestras around the country are facing this same problem.”
“The board feels very, very strongly we have an outstanding orchestra. We in no way want to stymie their creativity,” Bozzuto said. “We are hoping for a way forward together.”
Baltimore Mayor Bernard C. “Jack” Young said he hopes that the Baltimore Symphony Orchestra’s financial problems can be resolved. Young said he hopes the orchestra can avoid permanent cutbacks or closing up shop altogether.
“The BSO is very important to Baltimore. We want to see it remain in Baltimore and see it funded,” Young said. “It would be a significant loss, in my opinion, and I’m hoping that the musicians and the board can resolve this so we can move forward.”