Texas State comptroller authorizes $29.3 million for Formula One
State Comptroller Susan Combs has approved payment of $29.3 million from the state Major Events Trust Fund to organizers of November’s Formula One race, slightly less than what a group affiliated with Circuit of the Americas had requested in July.
The $29.3 million covers expenses related to hosting the U.S. Grand Prix on Nov. 16-18, including traffic management, temporary grandstands, other seating and a sanctioning fee to Formula One Management to host the race.
The amount authorized by Combs isn’t based on actual tax revenue generated by the event. It is an estimation of tax revenue made by the comptroller’s staff and the Circuit Events Local Organizing Committee.
Under trust fund rules, the amount granted to the event organizers should be equal to the amount of additional tax revenues generated by the major event. The comptroller’s staff is required to complete a post-event economic analysis within 18 months of the event.
“We’ll gather that data and start putting it together … as soon as we can,” said Lauren Willis, director of communications for the comptroller’s office.
The tax revenues that will be analyzed include sales, alcohol, hotel rooms and car rentals.
An economic study submitted by the organizing committee in July estimated that the race events would produce about $26.4 million in new tax revenue for the state.
The application to the trust fund sought a total of $30.6 million. The application contained the economic impact study, letters from City of Austin officials and Formula One chief Bernie Ecclestone, and other documents.
Combs sent a letter in August to City Manager Marc Ott saying the state would earmark $29.3 million for the event.
Messages to circuit officials weren’t returned Tuesday.
Although it will be months before reliable tax revenue figures are available, early indications are the event generated a considerable amount of additional economic activity. The question remains, how much activity and did it match the pre-event estimates?
For example, the economic projections submitted by the race organizers estimated $52 million in hotel revenues related to Formula One over the seven days ending on race day.
According to statistics compiled by STR, or Smith Travel Research, which tracks hotel industry data, hotels in the Austin area took in $32 million during the five-day period leading up to the race, which is triple what their revenues were during the same 5-day period a year ago. The Statesman