As State Faces Deep Cuts, Texas Commits $250 Million Of Taxpayer Money To Auto Racing

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"As State Faces Deep Cuts, Texas Commits $250 Million Of Taxpayer Money To Auto Racing"

At a time when Texas is dealing with a record budget deficit by slashing essential services and possibly laying off 97,000 teachers, state lawmakers have committed taxpayers to funding Formula One auto racing at a steep price: $25 million a year for the next 10 years.

The motorsport franchise left the U.S. four years ago because of low attendance, but the effort to bring it back — and base it in Texas — has been spearheaded by B.J. “Red” McCombs, the co-founder of conservative media conglomerate Clear Channel Communications. Despite being consistently ranked as one of Forbes 400 richest Americans — with a net worth last estimated at $1.4 billion — McCombs has gotten state Comptroller Susan Combs to agree to build a racing track in Austin at taxpayer expense. Austin’s city government may also invest an additional $4 million a year in tax revenue to facilitate the plan.

Even some Republicans are questioning the wisdom of committing state resources to bring the event to Texas as the state struggles to close a $27 billion deficit:

“I don’t understand why 25 people in Austin could not put up $1 million each if they thought this was a good opportunity instead of the state making a $25 million commitment,” said Senator Dan Patrick, a Houston Republican. “The developers should find the money through private sources.”

Bloomberg points out that for $25 million a year, “the state could pay more than 500 teachers an average salary of $48,000.”

Corporate backers of the plan and their GOP allies insist that F-1 racing will pump money and jobs into the Texas economy. But sporting experts say the state is betting taxpayer money on an uncertain investment. Michael Cramer, a former president of the Texas Rangers and Dallas Stars, told Bloomberg, “With places struggling, spending that much money on an essentially one-off event is tough to do.”

F-1 races have tried and failed to gain traction in the U.S. in different cities since since the 1970s. Even Bernie Ecclestone, the CEO of the F-1 series admitted that, “No one wanted to hold it,” until the Austin promoters stepped in.

Richard Viktorin, an accountant with Audits in the Public Interest, says his Austin-based group opposes government support for the races because they are a gross misuse of state funds. “It’s off-balance-sheet financing for a rich man’s sport.”

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