'If anyone wants to refer to me as czar," said Gary Steuer, gesturing toward one of his flaking office walls, "they can look at the peeling paint."

The city's new arts czar chuckled in a hearty, if mildly wistful, way.

Just six weeks into his job in the newly constituted and robustly labeled Office of Arts, Culture and the Creative Economy, Steuer maintains a sense of humor in the face of metastasizing challenges.

You could say he thought he knew what he was getting into when he accepted Mayor Nutter's offer to resuscitate an office that Mayor John Street killed in a 2004 round of budget-cutting.

But that was July. What did anyone know in July?

Steuer started on Oct. 1, and a whole new bottomless world had opened up by then.

"Even so, I was told clearly from the beginning that if you expect a big staff and a functioning office, this is not the job for you," said Steuer, who had been a vice president of Americans for the Arts, a large nonprofit arts service and lobbying group in New York and Washington.

"To me, it was an exciting opportunity. The reestablishing of this office is an acknowledgment of the importance of arts and culture and that it was very much part of the mayor's platform."

That said, no one quite expected what would greet Steuer when he arrived at his small office on City Hall's seventh floor: a staff of one part-time assistant.

"Welcome to Philly," said a colleague.

Steuer, 52, came to his $165,000-a-year job - though with recently announced cuts the figure is lower - after spending the last 20 years in New York seeking ways to integrate arts organizations into the broader community of politics, business and private enterprise. He started his career as a producer and performance maven, running two theater companies, but grew increasingly involved in broader arts management and policy issues.

"He understands how business interacts with the arts in various communities," said Karen Davis, head of the Arts and Business Council of Greater Philadelphia. "He's not just coming from the arts side."

Mara Walker, chief planning officer for Americans for the Arts, said Steuer understood the intricate ecology of arts organisms in an urban environment.

"He understands all the infrastructure it takes to develop the arts," she said. "He knows how the arts works."

With virtually no staff, Steuer has been presented with a desiccated bureaucratic landscape. In the round of cuts most recently announced by the administration, the Philadelphia Cultural Fund, which provides seed money and fuel to hundreds of organizations, will be reduced 24 percent in fiscal 2009, to $3.2 million.

Subsidies for the Philadelphia Museum of Art, the African American Museum of Philadelphia, and the Atwater Kent Museum have been cut by 20 percent (a total of $725,000 in operating funds). The Mural Arts Program will be cut by $500,000.

Support for the Avenue of the Arts, the Greater Philadelphia Film Office, and Historic Philadelphia will be reduced by $35,000 each.

Other arts-related programs, including Steuer's office, will be hit by general salary and staff reductions.

"It's a mess for everybody, not just for him," said Davis, who supported Steuer's appointment, and then felt awful when the budget crisis hit at the onset of his tenure. "To have him in this situation was embarrassing."

Steuer seems unembarrassed himself; indeed, he appears to relish the task at hand.

"It hasn't all been downhill," he said. "For all the challenges of the current financial situation and the limitations it places on my grander dreams, I feel that it's more important than ever that I be here and that this office exists because now there's a voice at the table for these issues when the [fiscal] decisions are made."

Steuer's position is at the level of the mayor's cabinet. He participated in the recent intense budget discussions, and brought to them the only broad overview of all of the city's cultural programs.

Why is that significant? For one thing, the city has arts-related programs and projects in several departments - from Commerce to Recreation to the Department of Public Property.

Within each agency, the arts programs may seem insignificant and thus prime fat to be trimmed. Steuer, however, was in a position to point out how Public Property's funding of the city's public art supported related programs at Fairmount Park, the Redevelopment Authority, the School District and the Recreation Department. The whole represents something far more significant than the fragmented parts.

"I can't say what would have happened were I not in place," said Steuer, unwilling to identify any orphans saved from the storm. "But without someone looking at all of these and looking at them as a cohesive whole, you are left with how these [separate programs] are viewed within individual agencies where they might not be a priority."

For local arts officials, Steuer's arrival is cause for some optimism, despite the reordering of priorities brought on by the cratering economy.

Peggy Amsterdam, president of the Greater Philadelphia Cultural Alliance, said big subjects like the pursuit of regional arts policies had been put on hold for the moment. No one knows how deep or how long the fiscal malaise will last.

"I think there needs to be priority-setting," she said. "We're at the point where we can't keep doing business in the same way we have been in the past. We need to find ways for residents to take advantage of the arts.

"There are many things - stemming the high school dropout rates, neighborhood and economic development. The arts community can say, 'We can help. We can create a groundswell of support to help this city be on a strong trajectory as a livable place.' "

Steuer shares this view. A lifelong New Yorker, he has spent virtually all his free time in the last six weeks visiting with local arts groups and officials, attending performances, visiting exhibitions, talking with museum officials, soaking up all things Philadelphia.

He has been particularly taken with the strong African American cultural presence here - and by the opportunity latent in the heritage represented by that presence.

He also sees opportunity in the city's theater community, its wealth of public art, and the possibilities for creating enticing temporary art exhibitions and performances.

"I feel I've become this incredible booster of culture in Philadelphia - in a way that only someone with fresh eyes can be," he said. "I've just been extremely impressed with the depth, breadth and quality of what's going on here."

Contact culture writer Stephan Salisbury at 215-854-5594 or ssalisbury@phillynews.com