Kennedy Center staff to lose jobs despite $25 million bailout to save them

The Kennedy Center has a monthly nut of about $6 million, and an annual budget of $270 million to $300 million. Rutter slashed her salary of $1.2 million before cutting staff. However, in the call to staff, she said that the $25 million that was earmarked for The Kennedy Center in the federal stimulus bill is not a bailout, but a “life preserver in a hurricane.” In fact, Kennedy Center administrators never had any intention of using the funds to keep staff employed, but only to ensure that the building would be able to reopen.

“We are really grateful for this $25 million dollars but I will tell you that it does not keep us whole,” Rutter said. She noted that her team worked closely with appropriators to craft language in the bill that would be very clear about this need. “We needed this just to be able to reopen as and when we can reopen. This does not keep us whole along the way.”

“What I do need to say is that this $25 million does not allow us to maintain our current structure,” Rutter said. “We can’t pocket the cash and stay the same way we are today,” Rutter said, announcing extensive furloughs and layoffs. “We are going to have to have furlough, we are going to have to have some lay-offs,” she continued, “and for some, depending on circumstances, we have to have some salary reduction. I have to tell you I’ve never had to go through this and I’m very very very sorry to say that it’s on it’s way.”

Rutter notes that even if there weren’t this money, or the coronavirus, the institution was in trouble anyway. “You all know that we have been living with a structural deficit, using funds from Building the Future to make us whole each year. That structural deficit and that use of that cash has absolutely caught up with us. So I’m glad that we have been talking about this for years so that this is not a surprise to you. But we are right in the vortex of the negative cash flow situation.” She shared this with staff so that they would understand the “magnitude of the situation.” Foundation donations are still coming in as well.

It turns out that like many not for profit companies in the US, The Kennedy Center is not solvent. Without this funding, given the current climate, their backlog of unpaid expenses, without the ability to sell tickets, would have sunk them anyway. Rutter and her team made the choice to use the federal emergency funding to pay debts and ensure that the center is able to open after the pandemic passes, but not to ensure that their employees or featured artists who now will not be performing despite having most likely already signed contracts for spring and summer performances will get either full or partial payment. Moreover, this decision was made before they asked for the money, and that’s how the ask was phrased—for operational expenses, and not for staff.

While those on the left have consistently over the last week decried the administration for giving money to businesses who could use the emergency funding to bolster their reserves, enhance executive bonuses or do stock buybacks, The Kennedy Center has slid under the radar. Big companies are restricted from using this money for operational expenses, and are meant to use it to pay employees so that they can maintain their families and homes, so why does The Kennedy Center get a pass? Is this grand and necessary cultural institution more essential than the livelihoods and solvency of their own employees?

The Kennedy Center receives federal and arts grants to create its vital programming, and the work it presents year after year is of the kind of high quality artistic caliber that Americans expect from this storied institution. But if the Center cannot use this money to bolster its employees during this time of incredible crisis and uncertainty, then it does not deserve to receive this funding.

As painful as it would be to see this legendary organization fold under the weight of its own debt and expense budget, it is more painful to realize that its many employees will be tossed to the wolves of deprivation after their final April 3 paycheck.

A country must maintain cultural institutions that provide arts content, but if the Kennedy Center was already in arrears, in debt, and unable to carry its own weight during the excellent economic circumstances that preceded this crisis, than perhaps their leadership and methods are at fault. Americans treasure their arts institutions, but the Kennedy Center is using coronavirus stimulus funding to deal with their previous cash flow problems, ones that they entered into willingly, and that support staff should not bear the burden of.