CPB budget allocation formula, 1981

In 1981, Congress significantly restricted the Corporation for Public Broadcasting’s decision-making on spending, funneling fixed percentages of CPB’s federal appropriation to specific spending categories and types of grantees.

Before then, CPB had faced repeated struggles, including a rift between TV and radio. In 1981, Congress imposed a formula proposed by Rep. Tim Wirth (D-Colo.), then chair of the House telecommunications subcommittee. The 75-25 split between TV and radio was based on experience.

Robben Fleming, then president of CPB, complained that the formula “emasculates” CPB, and his successors periodically have objected to their loss of discretion over spending. Between 1996 and 2004, CPB attempted to evade the formula’s restrictions to undertake an ambitious R&D effort for public TV called the Future Fund and was reprimanded by a General Accounting Office report.

CPB also receives occasionally targeted not governed by the formula: the private Annenberg Foundation donations that supported the Annenberg/CPB projects, separate appropriations for Ready to Learn children’s programs, for station upgrades to digital TV and digital radio (HD Radio) technology, and for periodic overhauls of the TV and radio satellite systems.

CPB budget allocation formula

The net effect of the 1981 amendment to the Public Broadcasting Act was to allocate the percentages named in this chart above. But these are not the actual percentages designated in the law, which spin out into percentages of percentages of percentages, as the legislative language below indicates.

The result each year, though, maintains the major spending proportions.

Here’s the result on the FY2009 CPB budget:

CPB approved budget for fiscal year 2009

Direct TV Grants $200,250,000
TV Programming 71,250,000
Total TV 271,500,000
Direct Radio Grants 62,300,000
Nat. Program Prod. and Acquisition Grants 21,220,000
Radio Program Fund 6,980,000
Total Radio 90,500,000
System Support 24,000,000
CPB Administration 20,000,000
Total Expenses 406,000,000

The allocation formula as described officially in the Public Broadcasting Act

The following provisions are contained in this portion of Section 396 of federal communications law, which establishes CPB. Source: federal law as of Jan. 26, 1998, posted on the web site of the Cornell Law School Legal Information Institute. Below is a portion of U.S. Code 47, Chapter 5, Part IV, Subpart D, Section 396.

  • (3)
    • (A)
      • (i) The Corporation shall establish an annual budget for use in allocating amounts from the Fund. Of the amounts appropriated into the Fund available for allocation for any fiscal year -
    • (I) $10,200,000 shall be available for the administrative expenses of the Corporation for fiscal year 1989, and for each succeeding fiscal year the amount which shall be available for such administrative expenses shall be the sum of the amount made available to the Corporation under this subclause for such expenses in the preceding fiscal year plus the greater of 4 percent of such amount or a percentage of such amount equal to the percentage change in the Consumer Price Index, except that none of the amounts allocated under subclauses (II), (III), and
      CPB admin costs
    • (IV) and clause (v) shall be used for any administrative expenses of the Corporation and not more than 5 percent of all the amounts appropriated into the Fund available for allocation for any fiscal year shall be available for such administrative expenses;
      System support costs
    • (II) 6 percent of such amounts shall be available for expenses incurred by the Corporation for capital costs relating to telecommunications satellites, the payment of programming royalties and other fees, the costs of interconnection facilities and operations (as provided in clause (iv)(I)), and grants which
      the Corporation may make for assistance to stations that broadcast programs in languages other than English or for assistance in the provision of affordable training programs for
      employees at public broadcast stations, and if the available funding level permits, for projects and activities that will enhance public broadcasting;

      Split between TV and radio
    • (III) 75 percent of the remainder (after allocations are made under subclause (I) and subclause (II)) shall be allocated in accordance with clause (ii); and
    • (IV) 25 percent of such remainder shall be allocated in accordance with clause (iii).
      Split between station and CPB discretion in TV
  • (ii) Of the amounts allocated under clause (i)(III) for any fiscal year –
    • (I) 75 percent of such amounts shall be available for distribution among the licensees and permittees of public television stations pursuant to paragraph (6)(B); and
    • (II) 25 percent of such amounts shall be available for distribution under subparagraph (B)(i), and in accordance with any plan implemented under paragraph (6)(A), for national public television programming.
      Split between station and CPB discretion in radio
      • (iii) Of the amounts allocated under clause (i)(IV) for any fiscal year –
        • (I) 70 percent of such amounts shall be available for distribution among the licensees and permittees of public radio stations pursuant to paragraph (6)(B);
        • (II) 7 percent of such amounts shall be available for distribution under subparagraph (B)(i) for public radio programming; and
        • (III) 23 percent of such amounts shall be available for distribution among the licensees and permittees of public radio stations pursuant to paragraph (6)(B), solely to be used for acquiring or producing programming that is to be distributed nationally and is designed to serve the needs of a national audience.
      • (iv)
        • (I) From the amount provided pursuant to clause (i)(II), the Corporation shall defray an amount equal to 50 percent of the total costs of interconnection facilities and operations to facilitate the availability of public television and radio programs among public broadcast stations.
        • (II) Of the amounts received as the result of any contract, lease agreement, or any other arrangement under which the Corporation directly or indirectly makes available interconnection facilities, 50 percent of such amounts shall be distributed to the licensees and permittees of public television stations and public radio stations. The Corporation shall not have any authority to establish any requirements, guidelines, or limitations with respect to the use of such amounts by such licensees and permittees.
      • (v) Of the interest on the amounts appropriated into the Fund which is available for allocation for any fiscal year –
        • (I) 75 percent shall be available for distribution for the purposes referred to in clause (ii)(II); and
        • (II) 25 percent shall be available for distribution for the purposes referred to in clause (iii)(II) and (III).
        • (B)
          • (i) The Corporation shall utilize the funds allocated pursuant to subparagraph (A)(ii)(II) and subparagraph (A)(iii)(II) to make grants for production of public television or radio programs by independent producers and production entities and public telecommunications entities, producers of national children’s educational programming, and producers of programs addressing the needs and interests of minorities, and for acquisition of such programs by public telecommunications entities. The Corporation may make grants to public telecommunications entities and producers for the production of programs in languages other than English. Of the funds utilized pursuant to this clause, a substantial amount shall be distributed to independent producers and production entities, producers of national children’s educational programming, and producers of programming addressing the needs and interests of minorities for the production of programs.
          • (ii) All funds available for distribution under clause (i) shall be distributed to entities outside the Corporation and shall not be used for the general administrative costs of the Corporation, the salaries or related expenses of Corporation personnel and members of the Board, or for expenses of consultants and advisers to the Corporation.
          • (iii)
            • (I) For fiscal year 1990 and succeeding fiscal years, the Corporation shall, in carrying out its obligations under clause (i) with respect to public television programming, provide adequate funds for an independent production service.
            • (II) Such independent production service shall be separate from the Corporation and shall be incorporated under the laws of the District of Columbia for the purpose of contracting with the Corporation for the expenditure of funds for the production of public television programs by independent producers and independent production entities.
            • (III) The Corporation shall work with organizations or associations of independent producers or independent production entities to develop a plan and budget for the operation of such service that is acceptable to the Corporation.
            • (IV) The Corporation shall ensure that the funds provided to such independent production service shall be used exclusively in pursuit of the Corporation’s obligation to expand the diversity and innovativeness of programming available to public broadcasting.
            • (V) The Corporation shall report annually to Congress regarding the activities and expenditures of the independent production service, including carriage and viewing information for programs produced or acquired with funds provided pursuant to subclause (I). At the end of fiscal years 1992, 1993, 1994, and 1995, the Corporation shall submit a report to Congress evaluating the performance of the independent production service in light of its mission to expand the diversity and innovativeness of programming available to public broadcasting.

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