Cincinnati pols eye school funds to cover deficit on sports stadiums

The Saint ReportInvestment, NIMBY, Planning and Zoning, Property Development, saintblog, Urban planning0 Comments

By Steve Shepherd,
Vice President for communications, The Saint Consulting Group

great american ballparkWhile folks in Arlington, Texas, bust their buttons with hometown pride over the billion-dollar football stadium they helped Jerry Jones build for his Dallas Cowboys, taxpayers in Hamilton County, Ohio, have a serious case of buyer’s remorse over their 1996 vote to fund new stadiums for the Cincinnati Bengals and Reds.

Hamilton County voters 13 years ago approved a half-cent sales tax increase to fund not paul brown stadiumonly the stadiums, it turns out, but extravagant lease deals for the millionaire owners of the professional football and baseball franchises.
Political backers of the stadiums bought support for the giveaways with a golden carrot: the tax increase would also pay for a rollback of property taxes.

A tax increase for a tax break? Yee-haw! And the voters bought it.

Besides, they didn’t want the rest of America to think Cincinnati was a hick town if the professional sports teams moved away.
Now voters who fell for the cynical deal feel like rubes played for suckers at the carnival, because they’re on the hook for what looks like a $13 million deficit next year in the stadium fund that pays off construction debt for Paul Brown Stadium and Great American Ball Park.
The deficit might be even more — possibly $92 million by 2014 if nothing is done.

Loath to increase property taxes — or, as they put it, eliminate the ‘rollback’ — politicians are looking at Cincinnati’s public school budget for a chunk of the money.
The Reds and Bengals, meanwhile, are reported to have no interest in renegotiating the sweet deals they got. (The county actually pays the Bengals $8.5 million a year to lease and operate the stadium it built for them. The Reds pay rent now, but the county will have to start paying them in 2012.)

Back when it was sold to voters, the stadium funding assumed sales tax revenue would grow 3 percent a year — called a ‘conservative’ estimate at the time. Alas, revenue has averaged only 1.65 percent growth since 1996 and declined five of the last nine years.
The annual Saint Index© survey of American attitudes toward land use and real estate development has consistently found high levels of cynicism about the process by which what does and doesn’t get built is decided. And selling taxpayer funding of new sports stadiums by promising voters a property tax rollback certainly qualifies as a cynical pitch.
But the voters of Hamilton County, Ohio, can only kick themselves for buying the scam. To now make the school system pay the price? That would be a truly cynical deal.
Links to stories about it:
http://www.bizjournals.com/cincinnati/stories/2009/08/24/daily5.html
http://news.cincinnati.com/article/20090824/NEWS0108/308240095/Taxpayers+will+owe++13M+to+stadium+fund
http://www.bondbuyer.com/article.html?id=20090831VQFK8A86

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