We finally have a number for how much tax money Wyandotte County could hand over to Kansas City Chiefs owner Clark Hunt following last Thursday’s vote to funnel virtually all sales and hotel taxes from a 200-acre stadium district in Kansas City, Kansas to help pay off $2.775 billion in state STAR bonds for stadium and related construction. Or rather, a couple of numbers:
The local tax breaks could total $350 million to $450 million. The Unified Government expects the project to generate $488 million in revenue, netting the county at least $38 million over 30 years.
I have questions! So many questions:
- How did the county estimate $350-450 million in tax expenditure (over 30 years, it sounds like, which would be more like $190-230 million or so in present value) when it’s unknown exactly what the Chiefs plan to build on the 200 acres?
- How did the county come up with that $488 million estimate for new tax revenue, and did it account for money cannibalized from other spending that would have taken place in the county even without a stadium?
- Since the state is planning on going ahead with the stadium regardless of whether Wyandotte County chips in, wouldn’t it get any new tax revenue either way, making the tax breaks a net loss?
Todd LaSala, a private attorney who serves as an economic development consultant for the Unified Government, attempted to answer the last question, at least, speculating that Hunt could build his stadium in a different part of the state if the county didn’t agree to the funding: “If you voted no, it sends an interesting, if not a dismissive message to the Kansas City Chiefs, who want to choose Wyandotte County as their home.” LaSala didn’t indicate why the Chiefs owner would balk at a Wyandotte stadium site when he’d be getting the same amount of STAR bonds for it regardless, but it is important to remember that if you want to remain attractive to the local billionaire, you must never speak your mind and learn how to light his cigar right.
As for the other questions, I’ve gone through all the documents presented for last week’s county commission vote, and I can’t find anything giving details about how those tax break and tax revenue projections were calculated. Given that when the state of Kansas tried a similar exercise with its own $3 billion-plus in Chiefs tax breaks, economists deemed the resulting figures to be “incredibly optimistic,” “insane,” and “just not credible,” it’s probably a good idea to take these latest numbers with a grain of salt — even before considering that these tax subsidies look to be money that Wyandotte County is voluntarily giving up to land a stadium it would get regardless. I’ve reached out to both the county and LaSala with the above questions, and will post an update here if I hear back from them.
NARRATOR VOICE: “They did not, in fact, make money on the deal. But by the time anyone figured that out, everyone who voted for the STAR bonds was long gone.”
Somebody call Will Lyman and Frontline!
I always get the feeling with these “economic impact” reports that everyone who’s involved in manifesting these papers — the ones who “run through” the numbers, the sports agencies who present the report to the public, the politicians who tout them to support the subsidies, the teams who depend on all three to get a deal done as quickly as possible, and media members whose salaries and livelihoods depend on the continued presence of said teams — would rather not even go through the exercise of having to present a financial arguments for a subsidy, knowing full well that the lies of “economic impact” would crumble to the ground under the slightest bit of examination.
They probably would even prefer to resort to full-on emotional blackmail, and rely entirely on the “intangible” benefits of having sports teams in their communities and play up what cities could lose [sic] by having those teams leave town… except they know that tactic won’t be enough to get people on their side in even the most ardent of sports towns.
Has anyone ever defined “economic impact”? I would expect it would mean exactly what Adam Smith wrote against 250 years ago.