Weep away dingbat, but what is being offered is not propaganda any more than yours is. As for "funding community good", that is a decision made by the community because if the community does not like it it is not good. 
Now, as to your frustration about the "Piss Christ". That type of "art" is done to inflame the audience. It is not an artistic impression, it is a political statement posing as art. And the ire it caused was intentional. So if you do something intended to irritate people, it might be a good idea to expect them to get irritated.
Finally, government financing of art is not " the very thing that separates us from our myriad brethren on the evolutionary tree."