Special state incentive programs targeted for extra scrutiny

Posted Friday, May. 03, 2013  comments  Print Reprints

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The Senate on Friday passed legislation by Sen. Wendy Davis that would impose increased scrutiny of major state tax incentive programs that have helped finance the 2011 Super Bowl in Arlington and other high-profile events in Texas.

The 29-1 vote sent the measure to the House. Sen. Donna Campbell, R-San Antonio, cast the dissenting vote.

The three members of Tarrant County's Senate delegation — Republicans Brian Birdwell of Granbury, Kelly Hancock of North Richland Hills and Jane Nelson of Flower Mound — supported the measure.

The bill mandates an audit of trust funds managed by State Comptroller Susan Combs and designed to help Texas cities compete for major sporting and entertainment events – as well as conventions – that supporters say provide a huge boost in prestige and economic benefits.

The funds have come under heightened attention during the current legislative session, with Davis and other senators questioning millions of dollars in state expenditures from the incentives program, including a total of nearly $16 million for the purchase of video score boards at sports arenas in Dallas and Houston.

One of the four incentives programs — the Major Events Trust Fund — provided $31.1 million for the 2011 Super Bowl in Arlington.

Mayor Robert Cluck and other Arlington leaders have made continuation of the fund a top legislative priority to give Metroplex cities financial muscle to compete for high-dollar national events.

Davis, a Fort Worth Democrat, says the programs have never been thoroughly examined to make sure the money is being spent properly.

“Since the events trust funds' original inception,” Davis told senators, “the fund has never been audited by the state auditor to ensure the funds are dispersed properly and according to all rules and regulations.”

Her bill would require a state audit of the Major Events Trust Fund, the Special Events Trust Fund, (NEW the Motor Sports Racing Trust Fund, and the Events Trust Fund to determine “the efficiency and effectiveness” of the programs.

The four funds have collective paid out more than $200 million for events financed through the incentives. The incentives are financed through added revenue generated by the events from sales taxes, hotel taxes, alcoholic beverage taxes and motor vehicle rental taxes.

Cluck says it would be “very difficult” for Arlington and other Metroplex cities to compete for events such as the Super Bowl without the incentives funds.

North Texas projects

In addition to the Super Bowl, the funds have been used to help local communities attract or keep high-profile events such as football bowl games, national swim meets, all-star games and auto races.

Nearly $60 million has been used or authorized for events in Fort Worth and Arlington. The Circuit of the Americas in Austin received $29.3 million to stage Formula 1 racing at a newly completed track in November.

In Fort Worth and Arlington, which offer giant venues such as Cowboys Stadium, Texas Motor Speedway, the Fort Worth Convention Center and Will Rogers Coliseum, the funds have been used to attract bowl games, all-star basketball games, NASCAR races, horse shows and conventions.

The Major Events Trust Fund came under renewed attention this year with a report by Houston's KTRK-TV that $8.1 million from the fund was used to buy a video scoreboard for the American Airlines Center in Dallas, home of the Dallas Mavericks, to attract the NBA All-Star Game to the area in 2010.

The game itself was played at Cowboys Stadium, but All-Star events including the Slam Dunk Contest were held at the American Airlines Center.

A similar amount was used to buy a video screen at the Toyota Center in Houston as part of that city's preparations for this year's NBA All-Star Game, the station reported.

Steve Letson, vice president of operations for the Mavericks, said the video screen purchase was permitted under the state program's rules and was necessary for North Texas to land the All-Star Game.

The bill was the last of a three-part “accountability” package by Davis to clear the Senate.

The other two bills call for an audit of the governor's Texas Enterprise Fund, an incentive program to attract business, and a review of an economic development program that offers school property tax abatements to qualifying companies.

Dave Montgomery is the Star-Telegram’s Austin bureau chief, 512-739-4471

Twitter: @daveymontgomery

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