No doubt pricey bond lawyers will tell the legislature that using voters’ 1968 bond authorization to help the Haslams would be totally OK.
But an Ohioan has to ask her- or himself whether voters who backed the bond authorization had a clue that it might be trundled out decades later by deal-making state legislators to subsidize professional teams’ owners.
The state’s official handout on the 1968 bond plan said it earmarked $500 million for highways. The rest would:
— fight water pollution;
— fund education buildings, juvenile jails, and parks and airports; and ... oh yeah ... finance other state buildings and structures, including those for police and fire training.” (Emphasis added.)
Those same voters agreed such undertakings would “directly or indirectly create jobs, enhance employment opportunities, and improve the economic welfare of the people of the state.”
But there’s robust debate over whether stadiums and other subsidized sports operations actually generate net new growth cannibalize entertainment spending a locality already produces.
No, Ohioans haven’t been shy about approving state-backed bond-issues. And it’s also worth noting that thanks to Republican Gov. Mike DeWine’s stewardship of Ohio’s finances, the state has earned top-notch ratings from the national bond-rating agencies.
Still, if, as seems likely, Ohio’s lobbyist-lubed General Assembly opts to sell bonds to help the Haslams, that – long range – is far more expensive to taxpayers that what DeWine has suggested.
Rather than rack up more debt, he wants to double Ohio’s 20% Sports Gambling Receipts Tax – paid by sports gambling companies, not gamblers – to 40%. (In 2022, legislators initially set the Gambling Receipts Tax rate at 10%. Effective in July 2023, in 2023-24’s state budget, the General Assembly boosted the tax rate to 20%.)
Doubling the Gambling Receipts Tax’s rate to 40% to help pay for a Brown stadium (and fund state aid for new venues likely demanded by owners of Ohio’s other professional sports franchises) would be demonstrably cheaper than paying bondholders interest for 25 years, plus accompanying legal fees and bond falderal.
Republican legislators’ plan would instead repay the Browns’ stadium bonds by pooling state taxes collected inside the Brook Park Browns enclave. The legal double-talk: “[The] incremental major sports facility mixed-use project district state tax revenues [that are] expected to be generated by the transformational major sports facility mixed-use project.” Note: “Expected.”
Meaning: Taxpayers statewide wouldn’t – in theory – be on the hook because state taxes on any hospitality, meals, merchandise, etc., bought and paid for inside the Browns’ Brook Park enclave wouldn’t go into Ohio’s treasury. Instead, that money – assuming it’s enough – would be pooled to pay off the bonds; Sounds like a Rube Goldberg gizmo.
Forget for now that the Haslams’ Brook Park plan snubs Cleveland and its ties to the Browns. Meanwhile, a General Assembly that won’t fairly fund public schools, yet lavishes tax money on private schools, and which offers no relief to Ohio homeowners crushed by skyrocketing property taxes, just can’t do enough to comfort Ohio’s financially powerful and politically connected.
Thomas Suddes is a former legislative reporter with The Plain Dealer in Cleveland and writes from Ohio University. You can reach him at tsuddes@gmail.com.
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