After spending most of yesterday not meeting and instead haggling behind the scenes, the Missouri state senate finally reconvened its special session last night and then voted at 2:30 am to approve Gov. Mike Kehoe’s stadium subsidy bill. The vote was 19-13, with seven of the senate’s 10 Democrats joining 12 of its 24 Republicans in favor.
The Democrats were won over after Kehoe added $125 million in disaster relief and housing for tornado victims, funding for a new mental health hospital, and other items that had previously been left out of the state budget. He also agreed to freeze property taxes in some counties, a measure that some Republicans were holding out for but some Democrats complained would reduce funding for local school districts.
In exchange, the senate approved one of the most sweeping tax subsidy schemes for sports stadiums in U.S. history: Whereas more typical funding plans might kick back increased sales or property taxes from a project to help pay off construction costs, Kehoe’s bill would collect all tax money being received currently at a stadium and kick it back to the team that plays there, up to a maximum of 50% of any construction or renovation costs. (If you need a reminder of why tax money paid at stadiums doesn’t really belong to the teams, Oscar Madison has got you covered.) With Kansas City Chiefs owner Clark Hunt talking about $1.15 billion in renovations to Arrowhead Stadium and Royals owner John Sherman looking at a new stadium costing between $1 billion and $2 billion, this means at least $1 billion in state tax money would go to the team owners, and likely much more — especially since they could come back and demand more state money down the road so long as they were spending at least $500 million on future upgrades.
The middle-of-the-night vote does not mean that the Chiefs and Royals stadium plans are immediately a go: The bill has to pass the Missouri house first, and though it already approved the stadium measure once, if it rejects the other last-minute goodies Kehoe tacked on to win votes, the bill could be kicked back to reconciliation talks with the senate. Plus, as team lobbyists pointed out on Tuesday, they still want even more public money from city and county governments before agreeing to any stadium deals. It doesn’t seem likely that all this will be hashed out by the end of the month when the teams’ offer of stadium funding from Kansas is set to expire, but that hardly matters at this point: Assuming the Missouri house and senate can work out final bill language, the owners of the Chiefs and Royals — and the St. Louis Cardinals if they want, and potentially a new St. Louis NFL team if it ever gets one — now have an endless slush fund of state tax money to tap into anytime they want a new or renovated stadium, which is one hell of a blank check.
The takeaway here: Getting neighboring states into bidding wars works, as does offering political opponents spending items they want in exchange for holding their noses and voting for something they don’t like. Neither of which should be a surprise to anyone who’s followed U.S. legislative history, but it’s still a depressing reminder of the state of the political world in which we live.
Missouri voters voted to expand medicaid, the legislature ignored it. They voted to expand abortion access, the legislature is ignoring it, they voted to expand sick days, legislature is ignoring it. And they voted no on spending on Chiefs/Royals stadium, also ignored. Must be sweet to not have to answer to voters.
Missouri legislators are limited to 8 years in the Senate and 8 years in the House. They don’t need to listen to voters because they are in and out so quickly. Then they can move on to be corporate executives or lobbyists for more money.
But they don’t listen to voters in states that don’t have term limits. Gerrymandering is a hell of drug.
Wrong! The Missouri legislature did not ignore the people. They gave the people a strong “FU” answer. Our legislators in Ohio do the same thing . . .
That’s the thing about these so-called “red states.” The overwhelming majority of people there might vote along partisan lines in either direction, but they’re far more progressive on standalone issues than they get credit for being. It’s just that the former helps make it easy for legislature to deny the reality of the latter.
The whole “you get what you voted for” scolding you hear from the (supposed) “blue state” liberals is only moderately true, if that.
This. The marijuana legalization and abortion rights amendments that were just recently on the ballot in Florida were defeated only because constitutional amendment referenda require a 60% majority (a requirement that was itself instituted by an amendment passed by less than 60% of voters). Both measures got well more than 50% of the vote, and significantly outperformed any Democratic candidate in a statewide election in years. That means there were people who looked at the ballot and said, “Gee, I really believe in abortion rights and in legalizing marijuana, but boy do I want Rick Scott to continue to serve in the Senate.”
When you get people to weigh in on specific issues and not on vibes, sound bites, and party tribalism, even a lot of hardcore Trumpies sound like Bernie Sanders.
Why do they always bother with these kickback schemes?
Why not just say “We are so desperate to keep you here and to build a ‘ballpark village,’ or whateverthehell, that we’ll just not tax you at all—but we don’t want to be seen subsidizing anyone, so you have to pay for it yourself?”
That would essentially treat pro teams as if they are The Church (I mean the ancient religious institution, not the Australian band that had a couple of MTV-era hits), which is consistent with how many politicians and fans think about their local pro teams.
They do provide tax exemptions, all the time. But just exempting teams from the taxes *they* pay wouldn’t be enough to pay for the stadiums the Chiefs and Royals want — so the state is kicking back taxes their customers and employees pay as well.
I wouldn’t worry about all this business of elected officials (maybe elected, maybe not…) ignoring the public’s stated wishes and best interest to funnel state assets to the ultra wealthy.
Given that the second American revolution appears as though it’s going to look quite a bit like it’s roughly contemporaneous french cousin… this will all work itself out.
Of course, the french revolution of the late 1700s was, um, a little messy… so it’s likely that none of us should be looking forward to a near term future full of wonder, justice and prosperity for all.
Grisly and widespread revenge might be a more likely short term outcome.
Now, let me turn on the morning news and find out what I am supposed to be terrified of/appalled by for the next few hours…
If Chiefs And Royals leave and Missouri loses all the athlete and entertainer taxes they generate. Missouri also loses all the ancillary taxes they collect from bars, restaurants, hotels, shops, etc. Tourism money.
If the Chiefs and Royals stay in Missouri, the state loses the athlete and entertainer tax but keeps all of the ancillary taxes we currently get(and more with new developments around the stadium).
Which is better for Missouri?
“If Chiefs And Royals leave and Missouri loses all the athlete and entertainer taxes they generate.”
That’s the team owners’ theory, but it turns out not to be borne out by actual evidence:
https://www.fieldofschemes.com/2016/01/14/10419/stadium-spending-is-bad-for-humans-and-other-living-things-thursday-edition/
In your article they referenced areas that have multiple teams in close proximity. I’d agree that a stadium wouldn’t do much for local business when most of the attendees are already local.
But I’d argue that the Royals and more so the Chiefs have an export market. Meaning most of their attendees are made up of ppl driving into the city, thus exporting their goods and services to people traveling in. Non locals coming in for the games. That is where the economic impact is.
That’s potentially an impact for the city. For the state, which is who just put up the $1B+, the only way there’s a net impact is if a shit-ton of people are driving in from neighboring states and dropping a load of money, and that’s almost never the case.
Are you suggesting that Missouri would be better off losing the Chiefs, which provide at a minimum $28.8 million dollars per year in state tax revenue AND the taxes from the $572 million in activity they generate in just Jackson County? You have to remember, this isn’t just about the sports teams, it is always about the concerts that are held in the stadiums…and all the money they bring in.
Every economist in the country will tell you that Missouri would be much better off losing any tax revenue that results from the Chiefs than giving them half a billion dollars. (Happy to see source info on those numbers you’re claiming, btw, because they don’t match anything I’ve seen anywhere.)
And LOL the mammoth economic impact of concerts at football stadiums, unless Taylor Swift is planning on performing a weekly residency in KC until she’s 70…
Unless you are looking at the Jackson County Sports Authority report and independent audit, your information is most likely wrong.
I found where your numbers are from, and they’re not from any economic impact study by the sports authority or an independent auditor or anyone else. They’re from a consultant hired by the Chiefs, who declared that the team and the stadium “generate $28.8 million in direct, indirect and induced tax revenue for the State of Missouri annually.” (The supposed $572 million is just “economic activity,” and the $28.8 million is the presumed taxes on that; if you include both, you’re double-counting.)
So, we already have Missouri spending $500 million in order to save $28.8 million a year, which would be a negative return on investment right there. But where does that $28.8m figure come from? The Chiefs consultants, Econsult Solutions, only released a one-pager with no footnotes or other methodology, so we have no idea:
https://www.chiefs.com/news/chiefs-release-record-economic-impact-of-nearly-1-billion-for-the-kansas-city-region
Most importantly, we have no idea if Econsult included money that would otherwise be spent elsewhere in Missouri if the Chiefs left. Is that all of it? No, of course not. Is it enough that it would reduce the $28.8m a year in new taxes to a level where Missouri would be better off if the Chiefs left? Given that Missouri would be better off even if the real number were $28.8m a year, yeah, that’s a near certainty.
But there’s an easier way to figure this out than guesstimating where people would be spending their money in some hypothetical situation: Look at cities that have gained or lost teams, and see what happens to local tax revenues. Innumerable economists have now done this, and found that the resulting losses are somewhere between 1) nothing and 2) next to nothing. (It’s actually worse than that: Some cities brought in *more* tax revenue without a team.) And that’s cities — the numbers are going to look even worse for states, since you can’t even make it up by stealing tax revenues from the suburbs.
No matter how you slice it, the numbers show that at the price points we’re talking about, $500m and up, there is no way on earth for local governments to do better with the teams than without. You can wish it were otherwise — and team owners will certainly hire people to claim that it’s so — but good luck finding any data to support your case.
What is 28 million multiplied by 30 years (The lifetime of this deal) and beyond? And you can also go cross reference numbers put out by Marr and Company, PC. Scroll to the bottom and look at Truman Sports Complex.
Missouri Witholding
Missouri Sales Tax
Missouri Income
Missouri Use Tax
County Sales Tax
County Amusement Tax
County Property Tax
KC Sales Tax
KC Earnings and Profits Tax
KC Business License
KC Use Tax
KC Health Department Fees
All of the above comes out to
TOTAL ECONOMIC IMPACT
$55,803,337.00
(This is for the year 2023)
So it looks like the 28mil per year we were discussing is quite low. So take $55mil x 30.
$1.65 billion – I’d say that is a net positive, wouldn’t you?
Money 30 years from now is not worth the same as money today. (If you disagree, I have $10,000 I’d like to borrow from you at 0% interest.) Present value of $28.8m a year over 30 years is:
$442.73 million
https://www.calculator.net/present-value-calculator.html?cyearsv=30&cinterestratev=5&ccontributeamountv=28.8&ciadditionat1=end&x=Calculate#periodical-deposits
As for that laundry list of taxes, you’re falling for the classic logical fallacy that I mentioned above: That all tax money is *new* tax money. You’re also including county and city tax revenues, but not including the county and city costs that the Chiefs have already said they’ll be looking for. So, no, it’s not a net positive, not even close.
Thanks for the questions, though, this is providing a great object lesson in why team economic claims are full of crap!
Billions are being spent on two sports teams in a city that doesn’t come close to matching St. Louis’s economic output. Meanwhile, only $100 million is allocated to help rebuild an area not only devastated by a tornado but also historically neglected and redlined—despite this region contributing 43.6% of the state’s GDP. Classic Missouri.
I’m starting to think it’s a good time to revisit this:
https://licensing.andrewsmcmeel.com/features/td?date=2017-10-12
And we don’t really have much to go on by way of the economic impact when the Rams left, because the NFL paid out 790million in a lawsuit… wonder why?
It was still 2:30AM here in KC, STL & JeffCity. (Albany, later.)
The GOB network is everywhere, gobbling it up, as usual, for the last 2 decades in MO. Again.
The “Good Ol’ Boys.” Vote the Good Ol’ Boys
out of Jeff City! Ye gobs.