Austin awarded more than $24 million in grants to 731 artists in March — but that was only a fraction of the requests it got for funding. Over 1,600 applicants asked for help, seeking more than $67 million.

“The creative scene in Austin is what put Austin on the international map,” Gina Houston, an actor and chair of the Austin Arts Commission, said during the State of the Arts panel at the inaugural KUT Festival on Saturday. But the cost of living has made it difficult for people to “find the time and resources to create the art that people have in their hearts.”

Real estate prices and the pandemic forced the closure of a number of performance venues and rehearsal spaces. The loss of federal funding last year compounded the issue. Without a space and a sign advertising their existence, art groups have operated underground, said Jason Neulander, a theater artist and playwright on the panel.

“And it’s a doomed feedback loop,” he said. “By being less visible, they then attract less support, until it spirals down into a tiny little dot.”

Houston said it was “unhealthy” for artists to rely only on the city to support their art. Laura Esparza, executive director of the nonprofit local arts agency A3 (Austin Art Alliance), agreed and said funding from the government can be “fickle.”

“There needs to be more than the city of Austin and H-E-B.”

Laura Esparza, executive director of A3

Neulander said he hadn’t relied on city funding for years and instead gets help from private individuals.

“What the city is interested in funding can be kind of a bit of a moving target,” he said.

Esparza said it’s essential for Austin to have more grant-making entities. Her group is opening a round of microgrants this week from money it raised through private fundraising.

“There needs to be more than the city of Austin and H-E-B,” she said.

Still, she and the other panelists agreed the business community needs to step up. The city’s creative scene is what makes people want to live and work in Austin.

“Hundreds of companies have moved into Austin in the last … two decades,” Houston, a lifelong Austinite, said. “I don’t see them creating those relationships with the artistic community so that they feel ownership of the creativity in Austin.”

Esparza suggested the city needs a business council for the arts that would foster partnerships between companies and the arts community, providing benefits to both. She said A3 is currently “networking” the idea — talking to city leaders and the Austin Chamber of Commerce so it can launch once there’s the money and resources.

Houston said it’s not just up to businesses to support the arts community, however.

“We need to engage … the arts-going community to get back into places that they’ve forgotten about,” she said.

She noted entertainment has changed drastically over the last decade.

“It used to be, you didn’t have nothing to do, you went out and saw something,” she said. “But now you always have something to do. There’s always a screen.”

Houston said the pandemic forced people to communicate virtually for several years and led to a sense of “desensitization.” Now, people are making friends with chatbots, she said, and missing a whole community of real people.

“We can’t lose that real-world interaction, because that’s how we feel each other’s heartbeats,” she said.

Neulander said that’s why people need to go out and see art.

“This unstoppable tidal wave toward AI is making live, tactile, in-person experiences with other actual, real human beings maybe the single most important thing happening on the planet,” he said.