Piano World Home Page Forums Our Most Popular Forums Pianist Corner The Lock Outs, the Minnesota Orchestra and the SPCO

Virtually all of those points are responded to in the Orchestral Association's FAQs.

These issues are very complex as are the situations preceding them. Representations by the boards of these organizations to the public may have been only partially reported or may have been improperly reported. I don't think without a deep understanding we can comment on the situation.

Also, many people believed the economy would turn around in 2009, 2010. That has not been the case and non-profits, including these organizations, rely on donations from people who have discretionary income. What they forecast in those years may not have come to fruition. So rather than speculate, it is better to let the parties figure it out. Bad public relations won't help either the musicians or the organizations.

FYI, many books and records of 501(c)(3) organizations are open to the public, but labor negotiations are not.

JessicaB,

Though I agree with you in concept, this matter is of great concern to those who support the arts, or are directly involved in the arts community. Just this morning, there was a report on Public Radio concerning the incurred deficits from the canceled seasons, to date, of both orchestras. Again, the membership of both the MO and SPCO have requested an end to the lock-outs and resume negotians while continuing with the remainder of the seasons under a "Talk and Play" agreement.

The matter is in the public eye, as it should be.

http://minnesota.publicradio.org/display/web/2012/12/05/labor/twin-cities-orchestra-lockout-update/

I cannot agree. You seem to be saying that ordinary music loving individuals should not voice an opinion on the manner in which a non-profit organization is managed. "Rather than speculate," we ought to just trust the integrity and good judgement of the parties.

First of all, some of what we are addressing is direct tax money from the citizens of Minnesota. Secondly, individuals with discretionary income give because it reduces their taxable income. Back in the bad old days, when the economy was good, particularly the 50s and 60s, but in this case, especially the 70s, the decade when the Minnesota Orchestra's endowment was created, wealthy individuals would give to good causes in order to put themselves into a lower tax bracket. Not only were they not taxed on what they gave, the remainder of their income was taxed at a lesser rate. I don't at all mean to impugn their love and dedication to the Minnesota Orchestra, but it must be pointed out that they were forgiven taxes by giving to good causes. In oblique, but certain ways, then, the public has paid pretty much for the whole thing.

I'm a member of that public, and feel duty bound to speak out whenever something seems suspicious or fishy concerning public money and the public good. Those who practice "public relations" will just have to direct their concern over "bad public relations" towards the "public" of "public relations"--that would include me. In that spirit, I will continue to speak out. And something does, indeed, seem "suspicious or fishy" when it comes to the lockout of the Minnesota Orchestra.

First, the Board of the Minnesota Orchestra, knowing a financial crisis was coming, and in the midst of the deepest recession since the Great Depression, chose to, and was able to, raise 52 Million Dollars to redo the lobby of Orchestra Hall. Again, they did this KNOWING A FINANCIAL CRISIS WAS COMING.

Second, in the process of raising the 52 Million Dollars, their reaction to the financial crisis was to demand that the orchestra membership take pay cuts of 30 to 50 percent.

Third, also in the process of raising the 52 Million Dollars, they deliberately deceived the Minnesota State Legislature, and quite likely, some wealthy patrons as well.

What's fishy about all of this? Priorities, priorities, priorities.

I acknowledge that the lobby was in need of an update. It was plain and sparse, and not inviting. But the stairways weren't dangerous, it wasn't a fire hazard, nor was anyone getting sued because they tripped on the carpet. It could have waited--indefinitely, if need be--for a better economic time. But even during a better time, I would question the need to go about it in such an extensive way. 52 Million Dollars, and the kind of construction I see happening downtown on the lobby, seems out of proportion.

Given all of that, the question is still one of priorities. What's more important? The continued artistic integrity of the Minnesota Orchestra, or a redo of a dated and unattractive lobby?

The Board made a very wrong choice on this question. And that is the stumbling block. What can be done at this point? It's a very bad situation. The old lobby is torn down. It's gone. The new one is partially built. We can't go back. We can't rededicate the 52 Million Dollars to the orchestra itself. It's spent.

For starters, I feel the board itself needs to show some contrition for their dishonesty, their royal screw up, and their total lack of good judgement. Perhaps they should resign, or certain members should resign. A new board is needed. At that point, perhaps a deal could be made with the musicians. Take a pay cut of 10 to 25 percent perhaps, and be willing to draw down the endowment one more time to pay that. And then, with fresh and honest faces on the board, they could get to work on rebuilding the endowment. If the current one raised 52 Million Dollars during a recession, they ought to be able to rebuild the endowment if they really try. After all, this state is in better economic shape than is most of the country. The economy overall seems to be improving. There are a few patches of blue sky to be seen. Trust going into the future, and keep your fingers crossed.

The Board has lost credibility with the State Legislature, wealthy donors, and the public at large. The Board is much easier to replace than the unequaled excellence of the Minnesota Orchestra.

Tomasino

I would hope this doesn't turn into a "twinkies" outcome..

This is getting silly.

Warren Buffett didn't know the financial crisis was coming. Neither did anyone else -- including the Orchestral Association trustees. At the time the current contract was adopted and plans for the remodeling were launched, the economy was good.

Second, most of the funds for the remodeling were earmarked and therefor not available for a purpose other than the one for which they were provided: capital improvements of the type specified.

Earmarked funds -- and money appropriated or privately raised for other specific projects -- simply are not available to meet general operating expenses such as salaries. One might wish otherwise, but they aren't.

The truth here is pretty obvious: The business model for the MSO (as for many non-profit institutions) isn't sustainable. The only way to change that is to bring operating revenues in line with operating expenses.

This is not how marginal tax brackets work. The remainder of their income was always being taxed at the lesser rate; it's only that last marginal amount of income above the threshold for the highest bracket that is taxed at the higher rate.

The effect of tax deductible charitable contributions is that a donor can give a certain amount of money at an effectively lower cost to themselves. But it is still a cost. For example, if someone is in a 90% tax bracket, and earning more than $100,000 over the threshold for the tax bracket, then they can give a charitable donation of $100,000 but because of the tax savings, their donation only effectively costs them $10,000. They didn't save money overall: they saved $90,000 on their taxes, and spent $100,000 on the charitable contribution, for a net cost of $10,000.

You're right that that means $90,000 less tax money in the public coffers, but there isn't an add on effect of lesser taxes on the rest of their money. They still pay the same taxes on the rest of that money as they always paid.

Thanks for that, and I accept your correction--it is only the amount above the higher bracket that is taxed a lower rate. I think I got it. Correct me again if I'm wrong.

Am I right, though, in thinking that we often misperceive wealthy donors as contributing much more than really comes out of their pocketbook, and give little or no credit to ourselves for what we are contributing? There is $90.000 less in public coffers, the non-profit has received $100,000, and the patron has effectively put out $10,000. Is this correct? And isn't there a kind of informal and unacknowledged trade-off, where other tax payers--in the aggregate, all of us--kick in that $90,000 which went to the non-profit?

My point is not to challenge the generosity of wealthy patrons and their love of music. Rather, it is to point out that we all make contributions, albeit in a very circuitous way, to non-profit organizations such as symphony orchestras, when the wealthy make contributions. Therefore, (and this was the point I was making to JessicaB above), we all are stakeholders, and have a right and even a duty to speak out if we feel strongly. And not just because we love music, and are a loyal ticket buying public, but because we have sometimes unwittingly, and sometimes unwillingly, contributed more to the non-profit than the price of our ticket.

Tomasino

No, it's not getting silly. It's getting serious.

I agree that not many knew the recession was coming in 2008, and many of the best run endowments lost money.

I also agree that most of the 52 Million Dollars collected for the lobby redo were dedicated, and probably could not have been easily rededicated. Even if it could have been rededicated, at this point it's a dead issue. The old lobby is gone, torn down, the new one is being constructed, and the money is being spent as I type.

Aside from these agreements with you, I still have difficulty with your failure to realize that the prevailing members of the Board were soliciting those dedicated funds for a lobby redo knowing full well that a financial crisis was just over the horizon. Why weren't they soliciting funds with a view to the crisis they knew was coming? Further, these same individuals fudged the books in testimony before the State Legislature to cover up this very unfortunate fact when they were pursuing state money. Two years later, when contract negotiations were on the horizon, they again fudged their books to make it look like the crisis was worse than it was. They planned to commit this double subterfuge in advance, and in the same breath. They knew exactly what they were doing. They knew the ethical and legal implications. They checked it out with lawyers and public relations experts, just to make sure. It's in the Board's minutes.These actions call into serious question both their judgement and their integrity.

As I say, this is not silly. This is serious. A trust has been broken. Trust is important. And how can the musicians, how can the state and city government, the patrons, and the concert going public, ever trust them again. If we are to work our way out of this here in Minnesota, Trust must be reestablished.

I see only one solution. Dissident members of the board, large donors and other influential individuals, must force out the major players of this fiasco, and quickly get in fresh and qualified people to make a deal with the orchestra: cutbacks of say 10 to 25%, an agreement to fund the salaries one more time by drawing on the endowment, and to rededicate themselves to do what boards are supposed to do--to raise money, and to rebuild the endowment.

I believe this can be done in a state like Minnesota. There is a tradition here of business getting along quite amicably with labor unions--a tradition built on generations of trust. Further, it would seem that if we can raise and spend 52 Million Dollars on a lobby redo in the midst of a deep recession, we ought to be able to reestablish the endowment now that times seem to be getting better, and we have a clearer picture of what the real issue is. It's a matter of self-confidence, trust in the future, and keeping our fingers crossed.

This is the only way I can see of ever bringing "operating revenues in line with operating expenses." Attempting to do so in an instant, by fiat, by subterfuge, or by demanding salary cuts of 30 to 50%, is not acceptable. Such a solution, in my opinion, would result in the orchestra eventually being reduced, over time, to a second rate pops orchestra.

Andre Rieu playing the "Beatles Greatest Hits" with the remnants of the once glorious Minnesota Orchestra five or ten years from now is...well...just forget it.

Tomasino

There's a certain amount of irony in the MSO's just-announced nomination for a Grammy in the "Best Orchestral Performance" category. Not that the classical part of the Grammys are taken seriously, but still...

That's probably exactly what the board was telling itself in 2008.

You're right, K. But the solution they came up with was based on math using erroneous numbers and the arrogance of power, all else to be ignored, or dealt with by fiat, or simply ignored for awhile. They did not consider the culture of Minnesota, the pride we take in our orchestra, and the quality we have come to expect, they did not consider the culture of music and the arts, they did not realistically consider the fact that they had a union to deal with, and they did not consider that both the State Legislature and the musicians could only be dealt with in a straightforward and honest. Consquently, their solution was absurdly foolish. Anyone who expected such a plan, implemented by edict, and ratified by trust in the future, was fooling themselves while attempting to fool others. It didn't work. We're on to them.

And look at the mess they've made.

We need realistic people, people of trust, integrity and judgement to deal with the problem as it stands now.Then we can again look to the future with an element of hope. I've still got my fingers crossed.

Tomasino

Congratulations are in order to Conductor Osmo Vanska and the MINNESOTA ORCHESTRA. Last evening they won a Grammy nomination for their recent recording of Sibelius symphonies number 2 and 5.

http://www.startribune.com/entertainment/182299481.html?refer=y&refer=y

Tomasino

Representative Kahn says core issue in Minnesota Orchestra dispute is values, not budgets:

"One of the chief reasons I am proud to be a Minnesotan is the value we have historically placed on culture and the arts. It is from this core value that we have been successful in developing and maintaining one of the world’s most renowned orchestras: the Minnesota Orchestra.

Unfortunately, I am afraid that this Minnesota value is one that will soon be compromised by a desire of the Minnesota Orchestra’s Board of Directors to transform it into a corporate structure, rather than a state tradition. Instead of engaging in thoughtful conversations with all stakeholders about how to efficiently trim their budget, the board would rather leave the heavy lifting to its musicians — cutting their pay considerably."

Here's the full article:

http://www.minnpost.com/community-v...-mn-orchestra-lockout-values-not-budgets

Tomasino

My point was that the negotiations themselves are private - there is give and take. I have been involved in negotiations, and there is a lot of misinformation that is presented to the public through unreliable sources. Usually, the more the parties can focus on what is going at the table itself, the quicker these issues are resolved and the more favorably for both parties. Ultimately, if the parties cannot come to a resolution, the organizations fail and no one wins.

For those of you who are following this situation, here is another development in the ongoing saga:

http://minnesota.cbslocal.com/2012/12/20/lawmakers-call-for-hearing-into-minn-orchestra-finances/

Hopefully there's no long term damage to the orchestra. Though I only went there a couple times growing up, I prefer it to my current location's (Seattle) orchestra and venue.