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DATE News (chronologically)
03/10/12
f1
Questions about  Austin F1 tax money could lead to changes  New questions about whether Formula One races are eligible for state taxpayer money have the potential to affect state funding for other major events, such as future Super Bowls and college basketball tournaments, and could lead to changes in laws governing such funds.

In a request filed March 1, Texas Land Commissioner Jerry Patterson asked Attorney General Greg Abbott for an opinion on whether F1 races planned near Austin are eligible for the Major Events Trust Fund, a state economic development fund administered by Comptroller Susan Combs' office.

Specifically, Patterson claims that because Circuit of the Americas was selected to host races without an application to the state from a local entity, no trust fund money should go toward the race.

It is Patterson's second request relating to the fund and Formula One. In November, he formally requested Abbott's opinion on whether Combs bypassed at least two provisions in state law regarding payments from the fund. Abbott's office has not issued an opinion on the November request.

"In November, I asked, ‘Did she have the authority to do what she did?' " Patterson told the American-Statesman. "This one says, ‘Does she have the authority, and can F1 qualify?' "

Combs' office said that Patterson's interpretation of the law is incorrect and that the statute does not address the timing of applications.

"Cities or counties that want to attract events must follow the application process established by the event's sanctioning organization," a spokesman for Combs' office said in a statement.

Patterson's requests have political overtones, because Combs and Patterson, both Republicans, have indicated they plan to run for lieutenant governor in 2014.

Although Patterson is arguing the legal definitions in the statute, his reading of the law highlights a debate over whether and how taxpayer money should be used to attract and pay for private events, especially in a tight budget environment.

The amount of money and the length of time that state funds would be committed to F1 — $25 million each year for 10 years — made him question the statute, Patterson said.

"A quarter of a billion dollars makes you notice more than $8 million here or there," Patterson said.

In May 2010, Formula One Management announced that Austin will host races for 10 years beginning in November. And although an application from a local entity is required for the event to receive trust fund money, no application had been filed as of Friday.

"Granting tax incentives to F1 for previously selecting the Austin/COTA site without prior solicitation by any authorized local entity is not offering an METF tax incentive ... it is merely giving F1 a gift of tax dollars," Patterson says in his request for an attorney general's opinion.

A spokesman for the circuit declined to comment. The track is under construction near Elroy in southeastern Travis County.

Officials have said it should be ready for the first race Nov. 16-18.

Once an event is over, the trust fund applies revenue from tax collections attributable to the event to pay costs incurred from hosting it.

Several major events have been approved for the funds, including the 2011 Super Bowl in Arlington and the 2011 NCAA men's basketball Final Four in Houston.

Although those venues were selected years in advance, state trust fund law says a local entity cannot apply for the funds more than 12 months before the event.

Patterson's reading of the law would've made those events as well as future events ineligible for the funds.

In 2008, the NCAA selected Cowboys Stadium in Arlington to host the 2014 Final Four and Houston for the 2016 tournament.

"Can we (fund those events)? No," Patterson said. "Should we? If yes, we need to change the statute. You can't make up your idea of events when the statute says this is how it's supposed to happen."

Sen. Kirk Watson, D-Austin, who rewrote part of the trust fund law in part to make Formula One eligible for funds in 2009, said he agrees with some of Patterson's argument.

"If the purpose of the METF is to attract events to the state, then why would we give money to events that are already coming to the state?" Watson said. "If we need to fix it, let's fix it." The Statesman

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