VA subcommittee: No state tax money for VA Beach arena, but here’s some state tax money

So those Virginia Beach arena plans aren’t quite as dead as we were led to believe. Apparently there’s still a bill kicking around in the state house, and it passed a subcommittee yesterday and moved on to committee, which is no assurance of anything but is still more progress than anyone expected a couple of weeks ago.

What the bill says, and what legislators say it says, is a hilarious lesson in the rhetoric of public subsidies. From the Virginian-Pilot’s report:

When talks with the [Sacramento] Kings were under way, the proposed deal included $150 million in state support. But Del. Bob Purkey, R-Virginia Beach, said today that local lawmakers made it clear to city officials “there was no chance in hell” of a direct state contribution.

Instead, [Del. Ron] Villanueva’s bill allocates state income and sales tax revenue generated by an arena to pay off the construction bonds.

So, instead of a “direct state contribution,” under Vilanueva’s bill the state would take state money collected at arena events and use it to pay off the cost of construction. (Yes, that’s a TIF.) And just to drive the point home, a legislative staff analysis says that the cost to the state treasury “would likely be significant.” But that’s not a state contribution, oh no. Heaven forfend!

None of the coverage of the new bill discusses how much money would be raised by this TIF, but keep in mind that Seattle’s arena sales tax kickback is only expected to be worth $5.8 million (that’s total, not per year), and income tax kickbacks usually don’t amount to that much either — even if you assume a $70 million NBA payroll, and that Virginia could collect its 5.75% income tax on the entire year’s earnings, not just the part of the year the NBA season was underway, that’s still only about $4 million a year. But, hey, you gotta start somewhere. And at least now the Virginia Beach arena advocates know that some legislators consider some tax dollars to be more public than others.


3 comments on “VA subcommittee: No state tax money for VA Beach arena, but here’s some state tax money

  1. And oddly enough, it could still be the Sacramento Kings. In the remote event the BOG rejects the sale to Hansen, I can see the Maloofs saying, fine, we’ll keep the team, but we’re applying to relocate to VB. So there.

  2. So can I. They’re that spiteful and that desperate. And if VA Beach is still going to provide them with everything it promised the Maloofs would still have their needed cash infusion and would still get to keep the team for sale later.

  3. As a matter of timing, I’d say we’re dealing with two things here:

    1) The SALE of the team to Hansen/Ballmer. This will be dealt with ASAP, and I’d be surprised if that isn’t approved by the end of next week.

    Then:

    2) The application to move the team, which will be filed sometime between the approved purchase and March 1.

    The sale approval will come at the earliest possible convenience, so really, all these Kings fans who think the decisions will be made on or after April 18-19 are simply dreaming.

    In the very remote possibility the BOG does not approve this sale, THEN the Maloofs would apply to move to VB. Virginia has very short legislative sessions. They’ll probably have their funding approved in just a few weeks. So there are at least 3 possibilities now: Seattle, VB or Sacramento. I’d put them in that order, by the way.

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