Arts funding in America is comprised of public dollars, private support, and earned income that is critical to the economic vitality of state and local communities and to the nation's cultural well-being. To date, most research has focused either on the national level, the local level, or on public opinions regarding the arts. This study attempts to identify factors that explain differences in levels of state funding for the arts by examining changes in state-level funding (1985-2007) and policymaking. The factors identified include: environmental conditions, inputs, institutions, federal aid, and policy. Case studies on New York, Utah, Washington, Pennsylvania, California, and Texas were conducted to examine the actual process of public arts policymaking. This analysis shows that as cultural activities have become infused in business and tourism promotion, local cultural policy communities have been altered, resulting in the creation of new organizations that acknowledge that "culture as development" constitutes its own policy arena.