Yesterday’s New York Times reported on the budget crisis looming at the Museum of Contemporary Art in Los Angeles, one of the most important centres for contemporary art on the west coast of the US:

The museum has operated at a deficit in six of the last eight years, and its endowment has shrunk to about $6 million from nearly $50 million in 1999, according to people who have been briefed on the finances.

Now the California attorney general has begun an audit to determine if the museum broke laws governing the use of restricted money by nonprofit organizations. And local artists, curators and collectors, including current and former board members, are lobbying to remove the museum’s director, Jeremy Strick, its board, or both.

The museum’s tailspin has brought an outpouring of grief and disbelief in a city that has recently cast itself as a rival to New York as the nation’s art capital. The closing of such a respected museum, or even its merger into another institution, would leave a formidable hole not only in the city’s psyche but in the national cultural landscape as well.

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The philanthropist Eli Broad wrote an opinion piece in the LA Times in November offering $30 million to the museum, if his donation could be matched by other donors– but so far, no bites. The LA Times’ arts blog CultureMonster has been keeping tabs on developments, with interesting comments from the blogosphere following quickly on its heels. Will this be the first major museum to face closure in the economic downturn?

The New York Times reported yesterday on the preparations of some major US museums for a possible dive in individual and corporate support of the arts– including donations of personal collections, rates of museum membership, and exhibition financing:

“There is bound to be belt-tightening across the board,” said Michael Govan, director of the Los Angeles County Museum of Art. “I imagine a lot of donors who are leveraged will probably be postponing decisions until the first of the year. A lot of people are waiting to see what happens, which means things will be put on hold.”

Mr. Govan said that he also wondered how the economic crisis would affect memberships, a crucial revenue stream for all museums. “We’re competing with buying gas and going out to dinner,” he said.

The Los Angeles museum’s memberships, which bring in about $8 million a year, range from $25 at the student level to $50,000 for members of the Director’s Circle (a status that affords what the museum terms “intimate dinners with artists and the director”).

In New York, meanwhile, Mayor Michael R. Bloomberg’s office has asked the department of cultural affairs, which decides how much city money each museum receives, along with other city agencies, to reduce its spending by 2.5 percent in the current fiscal year, which ends June 30, and make an additional 5 percent cut in the next one.

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