Theaters Resist a Taxing Increase

The Chicago theater community isn’t happy about a proposed 2 percent boost in the city’s amusement tax. The current 6 percent tax is levied on tickets to movies, concerts, major sporting events, and commercial theater in venues larger than 750 seats, including all the major downtown theaters–the Shubert, Chicago, Arie Crown, and Auditorium–where most major national touring companies have traditionally booked their Chicago dates. The increase would add about $6.3 million in revenue to city coffers in 1995.

But certain theater executives argue that a 33 percent increase would severely curtail downtown theater activity. Notes League of Chicago Theatres executive director Tony Sertich: “If the city is trying to raise money with this tax, they are shooting themselves in the foot, because it will only drive away theater producers and reduce the number of playing weeks in the city.” In 1993, when Cameron Mackintosh pulled Miss Saigon out of the Auditorium Theatre earlier than originally planned, he cited the city’s amusement tax as one reason for his decision.

Sertich also contends that any drop in downtown theater activity could mean a commensurate decrease in hotel, restaurant, and other tax revenue. Others in the business share Sertich’s concerns. “I think any increase is bad, especially since the tax already went up from 4 to 6 percent in 1993,” notes Jerry Mickelson of Jam Productions. Cultural commissioner Lois Weisberg spoke out against the amusement tax hike in an impromptu appearance before the City Council’s budget committee. “My opinion is that at this time in history this is a very, very bad time to increase the amusement tax,” said Weisberg. “It makes the Loop dark at a time when we are trying to enliven it.”

Recently Mayor Daley has indicated a willingness to consider altering or eliminating the proposed increase, but for that to happen someone would have to come up with an alternate way to raise several million dollars in revenue. Alderman Bernie Hansen, whose north-side 44th Ward is home to many theater companies, has been working closely with theater executives to find alternative revenue sources. Last Friday Hansen and Royal George Theatre co-owner Robert Perkins offered city budget director Paul Vallas three proposals for eliminating the amusement tax increase. Neither Perkins nor Hansen would elaborate on the proposals. Earlier this week Hansen predicted the increase would be kept to 1 percent, though he’ll continue negotiating to avoid any increase. A final vote on the 1995 city budget isn’t due until next week, and Hansen says last-minute budget amendments may be made as late as the end of November.

With the exception of Denver, which has a 10 percent amusement tax, Chicago is the only major touring market with such a tax on the books. Philadelphia recently abolished its amusement tax. The funds the tax raises can be substantial; the Live Entertainment Corporation of Canada’s production of Joseph and the Amazing Technicolor Dreamcoat, for instance, which has been running for 14 months at the Chicago Theatre with a top ticket of $62.50, will generate an estimated $2 million in amusement tax for the 1994 calendar year.

Sertich and others warn that if an increase goes through, the city could wind up losing theater productions to a new 4,200-seat theater scheduled to open in the fall of 1995 in suburban Rosemont near the Horizon. Rosemont currently levies a tax of only 3 percent on tickets to entertainment events.

Angels Prices Soar

It may not be popular with people intent on seeing Angels in America, but the producers’ decision to raise ticket prices $5 is likely to speed up recoupment of the $1.2 million it cost to mount the seven-hour, two-part production. The new top ticket is $50 for weekend performances. At $45 the old ticket price was already a record high for an off-Loop commercial production. The next highest off-Loop ticket is the $39.50 charged for Neil Simon’s Laughter on the 23rd Floor at the Briar Street Theatre. The new price for Angels in America even bests the $47 top for The Sisters Rosensweig, which just ended a four-week Loop run at the Shubert.

The strong positive critical response to both Millennium Approaches and Perestroika apparently convinced producers the market could bear a price increase. The production’s weekly operating expenses average just under $100,000; royalties paid out to playwright Tony Kushner and others account for nearly a third of this total. Since both parts opened in early October the production has been grossing in the neighborhood of $125,000 to $130,000 a week and clearing $25,000 or more a week in profit. Since the $5 increase boosts the weekly box office potential from approximately $145,000 to $159,000, coproducer Jeffrey McCourt estimates the play’s producers could recoup as much as $800,000 of their original investment by the time Angels in America leaves Chicago in early March to continue its national tour.

CSO in the Black

On Halloween night, the Orchestral Association, the Chicago Symphony Orchestra’s parent organization, held its annual meeting in the elegant ballroom on the second floor of Orchestra Hall. CSO trustees and administrative staffers attempted to deflect attention from the meager $9,000 surplus the orchestra realized on a budget of $36 million. On more than one occasion speakers noted that the surplus, however modest, put the CSO on better footing than most other orchestras around the country, some of which are drowning in red ink.

But the CSO’s financial statements for the fiscal year that ended June 30 indicate that difficulties could lie ahead. Orchestra Hall ticket revenue grew only 2.5 percent this fiscal year, while expenses grew approximately 7.3 percent. Management had expected approximately $13.6 million in ticket revenue for fiscal 1994–about $500,000 more than was actually taken in. Executive director Henry Fogel and the trustees will have to seek revenue from other sources, such as tours, hall rentals, and fund-raising. They’re also facing the added costs of managing the enlarged Orchestra Hall complex, scheduled for completion in about three years. At the annual meeting, CSO trustee William Jentes reported that the $95-million-plus expansion project is on schedule and on budget.

Art accompanying story in printed newspaper (not available in this archive): photo/Loren Santow.