Funding for big events under fire
EVENT REIMBURSEMENTS
These Texas events and facilities are among many that have received money from the Major Events Fund:
State government has reimbursed Texas communities more than $200 million since 2004 for hosting events ranging from Super Bowls and Austin’s Formula One race to a convention of Kentucky Fried Chicken franchises.
Although the programs used for disbursing the money initially were to help Texas lure major sporting events in “highly competitive” bidding wars with other states, an iconic Texas event such as the Cotton Bowl, based in Dallas since 1937, qualified for an almost $1 million reimbursement in 2012.
Over the years, the Legislature has expanded the eligibility of the events — both sporting and nonsporting — so much that three Texas senators are now calling for greater scrutiny for the programs under the direction of state Comptroller Susan Combs.
The reimbursements are supposed to come from incremental increases in revenue from sales and hotel taxes,
for example, that can be attributed to the events. But critics are saying that the economic projections used to justify receiving the funding are sometimes inflated and that communities shouldn’t be spending state money to re-roof convention centers or install Jumbotron scoreboards.
The concerns, expressed at a hearing Wednesday, came from both Democrats and Republicans, but there is an undercurrent of GOP intraparty intrigue as Land Commissioner Jerry Patterson is among the critics. Patterson and Combs, both Republicans, are considered possible competitors for higher office next year.
Representatives of sports authorities from Austin, Dallas, Houston and San Antonio showed up Wednesday to oppose the legislation to rein in the programs, but behind the scenes they are already negotiating limits for future events.
State Sen. Robert Deuell, R-Greenville, and two Democratic state senators, Austin’s Kirk Watson and Fort Worth’s Wendy Davis, have legislation addressing the Major Events Trust Fund and its sister account, the Events Trust Fund, which focuses on smaller events.
Looking over a list of events, Davis said the funds have never been audited.
“Anyone who looks at this will feel we’re handing out these things like candy,” she said. “It appears just everybody who asks, gets money.”
She questioned whether the events are generating the money claimed and whether the state is benefiting.
Her Senate Bill 1392 would require an audit by
SJanuary 2015, the start of the next legislative session.
Senate Bills 1678 and 765, by Deuell and Watson, try to address the issue of $8 million Jumbotron scoreboards being purchased for basketball arenas in Dallas and Houston to host recent NBA All-Star games and related events.
The bills would limit the state’s reimbursement for “structural improvements” to expenses tied to a single event. If an improvement, whether it’s a new roof or a scoreboard, is a long-term asset, the reimbursement is capped at 5 percent of the total cost.
Chris Shields, a former lawmaker and lobbyist who originated the event trust fund idea, testified against that proposal. Before the events trust funds were created, Shields said, communities were spending their own money to lure major attractions with no guarantee.
“The state kind of got all the money, and the locals took all the risk,” he said.
Shields argued that the original purpose of the program was to encourage communities to invest in more and better facilities so they could compete for more events. “The best thing we can do is invest in public infrastructure,” he said.
Susan Blackwood, executive director of San Antonio’s sports authority, agreed.
She said San Antonio spends at least 40 percent of its state reimbursements on improving its aging facilities, including the Alamodome and the city’s convention center.
“We’d prefer no cap,” she said.
Critics say that Texas taxpayers, in effect, are subsidizing the facilities. But Blackwood disputes that notion, saying the money produces “incremental increases” in revenue that the state wouldn’t have collected otherwise.
Still, she said supporters of the fund are negotiating “parameters.”
Deuell’s bill also would exclude any events that can’t generate at least $1 million in incremental tax receipts.
Perhaps no person has spent more time digging into the comptroller’s trust funds program than Patterson, who already has announced he’s running for lieutenant governor. Patterson said Combs is “rubberstamping” reimbursements to communities with no real oversight: “If you submitted it, it gets approved.”
He also questioned the economic projections submitted by communities, saying many are bogus.
He cited the economic analysis for the 2011 Super Bowl in Arlington that projected 700,000 visitors for Super Bowl week. The game attendance was slightly more than 103,000.
“That’s a lot of tailgaters,” Patterson said.
He called for an immediate audit to determine if Combs is following the law and for a six-month moratorium on new projects.
Lauren Willis, a Combs spokeswoman, disputed Patterson’s charges, saying all expenses go through a thorough review.
“We strictly follow what the Legislature has outlined in statute,” Willis said. “If lawmakers wish to implement any changes or provisions in statute, such as an audit, we will follow them of course. Our books are open.”
Patterson also said Combs has been “stonewalling” his requests for public records.
Willis said that Patterson is seeking about 100,000 pages of documents and has been given almost 15,000 pages so far. She said the agency has spent more than 2,000 hours, primarily because personal identifying information has to be redacted from the records.