Arizona Theater Group Finds Arts Funds Tight

THE Arizona Theater Company very narrowly avoided going under. The reason, say members of the Arizona Commission on the Arts, can be traced to the Arizona Interstate Bank and Savings and Loan Act that took effect almost three years ago. It enabled jumbo out-of-state banks to acquire Arizona's prime banks. Critics say that means funding decisions are made elsewhere, spelling bad news for local arts organizations.

The ATC had announced that it had to raise $972,000 by June 30 to pay off part of its debt and begin the next season. By the deadline, it managed to collect $1,003,415,the vast majority from individuals, an ATC spokesman says.

The ATC's donations from banks have gotten smaller and smaller. In June 1988, its board was forced to reduce the season's budget from $3.1 million to $2.8 million and then, as expectations continued to decline, to $2.5 million.

With the absence of a good deal of local bank decisionmaking, Arizona arts managers complain of a leadership vacuum in their communities.

Before the banking law took effect Oct. 1, 1986, the state had 53 banks, all locally owned. Today, after mergers and acquisitions, it has 47, with the biggest 23 owned out-of-state.

The only bank of significant size still owned by Arizonans is the state's largest, Valley National of Phoenix (nearly $9 billion in deposits), ranked 33rd in the United States. The others are held by such goliaths as Citicorp, Chase Manhattan, Security Pacific of Los Angeles, and Continental Illinois.

Arizona isn't the only state where arts organizations are feeling a pinch, however. Alvin Reiss, editor and publisher of Arts Management Newsletter, says the squeeze is true across the country.

He believes several phenomena have changed patterns of giving by banks and other corporations: Mergers and acquisitions have reduced the number of businesses willing to make donations to the arts; demands for funding have increased, especially in the area of human needs (``life-and-death situations, like the homeless and AIDS have risen''), and today big corporations are more likely to give money where it helps their marketing.

In Arizona, very little of the banks' largess has been bestowed upon local arts organizations, according to a supporter of the ATC, who has asked not to be identified.

Mary Short, a former state superintendent of banks, says banks were always the traditional business leaders, ``the pillars of the community.''

Arizona bankers are not unanimous in their opinions about the impact of the interstate banking law.

``I have no reason to believe [fund-raising is more difficult]. I raise a lot of money [for arts groups] and I haven't run into that. I spend 20 per cent of my working hours on fund-raisers,'' says Gene Rice, chairman and chief executive officer of MeraBank in Phoenix.

And Jos'e Rondstadt, spokesman for Security Pacific of Phoenix, an out-of-state owned bank, agreed that the change in the bank's ownership has had no impact on its fund-giving policy.

Tucson banker Jack Davis has a different perception. Mr. Davis, former vice-chairman of United Bank, now owned by Security Pacific, said, ``If the CEO ... resides in the community, there's going to be a higher level of participation in both personal and physical resources as opposed to a branch. Branches are just not going to give the same attention and level of commitment to the community that home offices do.''

When asked about the impact of the state banking law on the Arizona bank scene, Davis, presently vice-chairman of locally owned Valley National Bank, said, ``I used to think the positives would outweigh the negatives. I've now changed my opinion and I believe that's not the case any more. I think the negatives probably outweigh the positives.''

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