Arts institutions feeling impact of ailing economy

There are similar anxieties at the Joffrey Ballet, which launched a $35-million capital campaign to cover the $24 million in costs of acquiring 48,000-square-feet of space in a new skyscraper in downtown Chicago, said acting executive director Christopher Clinton Conway.

"We always hope for the best and plan for the worst. We haven't needed to cut back in any way as we move into the new building, but we're very carefully watching as to increased expenses," Conway said. "We're being extra careful and conservative in our budget for next year."

Michael Kaiser, president of the Kennedy Center for the Performing Arts in Washington, D.C., said the bond market fluctuations are just one element of the current uncertainty in the economy. He also cited rising energy prices and the effect of a falling stock market on endowments.

Kaiser said that if cultural institutions need to cut costs they should eliminate things like staff training and new computers. He warned against making drastic cuts in programming.

"In periods of recession arts organizations often overreact, cutting the wrong expenses and making it more difficult to recover when the recession ends," he said.

"The focus has to be in creating important art and then marketing that art in an aggressive way. That's what brings money into arts organizations."

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Associated Press Writers Jacob Adelman in Los Angeles, Ryan J. Foley in Madison, Wis. and Tara Burghart in Chicago contributed to this report.