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Argues that the recent cuts in state arts agencies' budgets are a product of the agencies' political weakness rather than just a one-time response to fiscal crisis, and proposes a solution plus salient issues that must be addressed. Numerous U.S. state and jurisdictional governments cut their arts budgets in 2003 and 2004. The author argues that the reason for these cuts is not just a one-time fiscal crisis, but the political weakness of state arts agencies that has arisen because of a growing mismatch between their roles and structures and the cultural and political realities they face. A shift in the arts agencies' focus and funding may be a solution, but it cannot take place until important conceptual and practical issues are resolved.