Candidate questions million-dollar incentives for Texas events

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by BYRON HARRIS

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WFAA

Posted on March 14, 2012 at 5:59 PM

Updated Wednesday, Mar 14 at 6:22 PM

NEWS 8 INVESTIGATES

Texas spends tens of millions of dollars a year to encourage special events like the Super Bowl to come to the state. The money comes from special trust funds.

A News 8 investigation two years ago found that the funds' economic benefits are never evaluated after the fact.

Now Jerry Patterson, a Republican candidate for lieutenant governor, is asking the attorney general to look into the way those funds are spent.

State records illustrate some of the events that have benefitted from the state money:

  • The National Cutting Horse Association has received more than $5 million.
  • The Appaloosa Horse Club World Championship got $460,000.
  • The American Miniature Horse Association got $137,000.
  • The Circuit of the Americas Formula 1 race, scheduled for next fall in Austin, in line to get $250 million over 10 years.

The state coughs up money to entice the events to Texas instead of losing the perceived tax revenue to other states. It's an advance on moneys the state anticipates to receive in tax revenue from the events.

But as a News 8 investigation found, Texas never even tries to check if the funds generated by the events make up for the incentives.

"It's become a slush fund where the numbers aren't verified, where we commit a quarter of a billion dollars — that's $25 million a year for 10 years — for a Formula 1 race in Austin, when New Jersey gets one without any money being committed," said Patterson, who currently serves as Texas Land Commissioner.

The 2004 Houston Super Bowl did not generate nearly the income the game's organizing committee said it would. Analysis employed by economist Craig Depken of the University of North Carolina showed taxpayers ended up $2.2 million in the hole, as News 8 first reported in 2010.

Land Commissioner Patterson is making the trust funds one of the issues in his campaign for lieutenant governor.

"It's bogus numbers for what could be argued is a good purpose," Patterson told News 8. "But the purpose is only good if we make more money than we spend, and can it be proven that that occurred. And that's the problem."

Patterson also questions whether many events would really go to other states if Texas offered no incentives. The Texas Versus the Nation football game — obviously an event unique to the Lone Star State — was played for four years in El Paso and got more than $1 million in trust fund money over its final two years there.

The crowds were so sparse the promoter moved the game to San Antonio, and never had to pay back the trust fund money he received.

The trust funds are overseen by the state comptroller's office. Comptroller Susan Combs' office says the funds are properly administered according to state law, and that cities must go through several steps to get the money.

Candidate Patterson wants to see hearings on the process in Austin.

E-mail bharris@wfaa.com

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