In Utah, the Sutherland Institute is leading an effort to stop state support for the Sundance Film Festival. On the organization’s blog Derek Monson writes :
Given the amount of sexual promiscuity that Sundance Film Festival regularly brings to Utah, it seems similarly indecent that Utah’s major economic development agencies basically endorsed the event: providing “critical support” to the festival as a “global branding” opportunity, and being listed under the event’s “Corporate Support” banner.
The institute’s president Paul Mero says that the organization is opposed to all corporate subsidies . From an economic position  — and one of fairness — this makes sense. As Matt has written , subsidies that favor one type of business lead to inefficient investment thereby decreasing economic growth. When Utah policymakers tout the economic benefits that the festival brings to the state, they are ignoring that the festival would likely be held in Park City for its scenic location without a subsidy and the unseen costs of directing taxpayer resources away from what they would otherwise be invested in.
In this case of subsidized art, however, those receiving the subsidies should be as wary as the taxpayers providing them. No one at the Sutherland Institute has suggested placing restrictions on the content of the films allowed at Sundance, rather they object to their tax dollars supporting supporting a film festival, and one that contains films some may find offensive at that. But in many other cases, public funding for art breeds censorship.
In 2010, the Smithsonian’s National Portrait Gallery famously removed a video by David Wojnarowicz which had been a part of an exhibit called Hide/Seek in response to conservative groups and the Catholic League which described the work as as “designed to insult and inflict injury and assault the sensibilities of Christians .” Understandably, these groups protested their tax dollars being spent on art they found offensive, but just as understandably artists participating in the exhibit objected to government censorship of their colleague’s work. In reaction, AA Bronson asked the National Portrait Gallery to remove his work in protest, but his request was denied by the museum .
The many examples of censorship of government-funded art  and art museums provide compelling reasons for art and state to remain separate, both to protect taxpayers  and economic growth along with artists’ freedom of expression.