NEWS 8 INVESTIGATES
DALLAS — Next year's Super Bowl in Arlington is getting tens of millions of dollars from taxpayers because of its supposed economic impact.
The predictions come from an economic consultant whose predictions are never checked. Several economists say the impact of such events is either minimal or non-existent.
But it turns out that Super Bowl XLV is not the only event that gets state money on unproven economic assumptions. The Latin Grammy Awards, the American Miniature Horse Association show and the Triton Financial Classic Golf Tournament are all such events who have landed big money. The events have all received, or are scheduled to receive, cash from Texas taxpayers.
It's a flow of dollars described on the Internet as "free money." The cash cow was set up by the Texas legislature in 2002 with the creation of what are now known as "event trust funds," which were created under the assumption that special events generate sales tax dollars from out-of-state visitors. But, the assumption is never proved nor measured.
"There has been a huge hustle passed under this governor for economic benefits for the rich, and this is just one example of it," said Rep. Lon Burnam, (D-Fort Worth).
One big winner of tax dollars has been the National Cutting Horse Association (NCHA) of Fort Worth, an organization with powerful political friends, including Fort Worth Mayor Mike Moncrief and Lt. Gov. David Dewhurst.
The NCHA has received more than $4 million in taxpayer money for its Triple Crown events in Fort Worth. The organization is scheduled to receive another $1.6 million this year, for a total of nearly $6 million since 2006.
The cash started flowing when a consultant reported the events bring $90 million in taxable expenditures each year to Fort Worth. The consultant, TCU journalism professor Gerald Grotta, said he is comfortable with the $90 million estimate.
But, attendance at the event is never counted. In fact, the NCHA doesn't even sell tickets to most of its competitions. The best numbers available are for contestants, which total about 15,000 people over three separate shows. Each of the shows run about 20 days.
Grotta estimates people spend nearly $2 million on boots and western wear during the festivities, which equates to 5,000 pairs of boots at $400 a pair, a high price for a lot of people. He said $3.9 million is spent on saddles and equipment, or 975 saddles at $4,000 each.
"This is based on what we have documented on how many people are there to participate in the events," Grotta said.
Participants are upscale.
Glory Ann Kurtz, who has written about cutting for 30 years, likens the NCHA to a country club.
"They own horses, but it's a good place to socialize," she said. "And, you know who you're socializing with."
Grotta said its too difficult to count the crowd, so he interviews 400 people per show to compile his estimates. He asks them how much they've spent at the Triple Crown and how much they plan to spend. Actual spending is never measured.
He developed his questionnaire with the help of Dr. Don Hoyte of the Texas Comptroller's office.
"He is very cooperative with us as we develop the program," Grotta said. "And each year as the legislation changes, each year we make modifications."
Working with Hoyte, Grotta expanded his consulting business. His studies for the American Paint Horse Association World Championship show garnered more than $1.4 million over three years. His economic impact report for the Appaloosa Horse Club World Championship got $460,000 from the state in the last three years. And, the American Miniature Horse Association, with Grotta's analysis, will receive $137,000 from Texas taxpayers this year.
"It's wrong for the state to accept at face value these numbers being generated by somebody who's paid by somebody to convince the state to give them a lot of money to do a project," Burnam said.
At the comptroller's office in Austin, Hoyte is no longer the man who reviews economic impact statements to award state grants. He's become a consultant himself. His website, TexasTrustFunds.com, says, "We can help you get funding for your event."
Hoyte's economic impact studies got Texas A&M $314,000 in state money for NCAA events in the last two years, according to state records. Lakeway, near Austin, received $138,000 in taxpayers money last year for the Triton Financial Classic PGA Champions tour. The tournament did not return to Lakeway this year.
And, Hoyte was involved in an impact study for the Latin Grammy Awards in Houston two years ago. Originally, the Houston Convention and Visitors Bureau estimated the Latin Grammy's economic impact would be $25 million. Then they hired Hoyte, who said the economic impact would be $33 million. That estimate raked in a half million dollars in taxpayer money.
Hoyte did not return WFAA's phone calls and e-mails.
Never look a gift horse in the mouth, the saying goes. In the case of cutting horses, taxpayer cash goes for prize money, which makes wealthy horse owners wealthier.
Kurtz said that in the case of the NCHA Fort Worth shows, the state is subsidizing a country club for the wealthy. But, there are many horses in the trust fund sweepstakes. There are now four trust funds that give state money to events, and the way the legislature wrote the statutes, all event planners must do to receive funds is submit an economic impact study.