In his May 2025 budget revision, California Governor Gavin Newsom proposed eliminating $11.5 million in funding for the Performing Arts Equitable Payroll Fund (PAEPF), a move that has drawn significant criticism from arts advocates and organizations across the state. The PAEPF, established in 2022 through Senate Bill 1116, was designed to support small nonprofit performing arts organizations by reimbursing payroll expenses, thereby aiding compliance with labor laws and sustaining employment in the arts sector.
The proposed cut comes amid a projected $11.95 billion state budget shortfall, which Newsom attributes to economic challenges such as tariffs and decreased tourism. Despite these fiscal constraints, the elimination of the PAEPF has raised alarms about the potential impact on California’s vibrant arts community, particularly organizations with annual budgets under $2 million that rely heavily on this funding to maintain operations and staff.
Actors’ Equity Association, representing theater professionals nationwide, has been vocal in its opposition to the proposed cuts. President Brooke Shields emphasized the importance of the PAEPF in supporting jobs and arts programs in small and midsized communities, stating that eliminating the fund would result in fewer jobs and diminished access to the arts across the state.
The urgency of the situation is underscored by the overwhelming demand for the PAEPF; when grant applications opened in March 2025, the program received such a high volume of applications that it closed within ten days. This response highlights the critical need for financial support among small arts organizations still recovering from the pandemic’s economic impact.
At the BottleRock Napa Valley music festival on May 24, Governor Newsom addressed the proposed cuts, reaffirming his commitment to supporting the arts despite the challenging budgetary environment. He acknowledged the cultural significance of the arts and the need for free expression, especially during times of political and economic uncertainty.
The proposed elimination of the PAEPF also coincides with recent federal funding reductions from the National Endowment for the Arts (NEA), which has sent termination letters to various arts organizations, citing a shift in funding priorities. The combination of state and federal cuts has intensified concerns about the sustainability of arts programs and the livelihoods of arts workers in California.
Advocates and organizations are mobilizing to oppose the proposed cuts, engaging in letter-writing campaigns, phone banking, and public demonstrations to urge the state legislature to restore the funding. The legislature has until June 15 to finalize the budget, providing a window for stakeholders to influence the outcome and advocate for the preservation of the PAEPF.
The potential loss of the PAEPF has broader implications for California’s economy and cultural landscape. The performing arts sector not only contributes to the state’s economic vitality through job creation and tourism but also plays a crucial role in community engagement and education. Eliminating support for small arts organizations could lead to closures, job losses, and reduced access to the arts, particularly in underserved communities.
As the budget deliberations continue, the arts community remains hopeful that the state legislature will recognize the value of the PAEPF and take action to preserve this essential funding. The outcome will significantly impact the future of California’s arts sector and its ability to thrive in the face of economic challenges.
