Mo. Senate backs incentives for sports events
Wednesday, January 30, 2013
Missouri recently has lost major sports events to other states that offer enticements, but senators intend to get back in the game with legislation that offers up to $3 million annually in sports incentives.
The goal of the bill is to help local communities and sports authorities compete for attractions such as college basketball tournaments, Olympic trials and other amateur sports events.
Although some senators expressed concern about creating a new tax credit, supporters contend that loss would be more than offset by the increased sales tax revenues generated by visiting sports. They also cited the economic boost that major sports events can provide to the bottom line of local restaurants, bars, hotels and retailers.
Senators endorsed the legislation by voice vote Monday. It needs another Senate vote to move to the House.
The bill’s quick endorsement — coming early in the 2013 legislative session — marked a dramatic departure from recent years, when newly proposed tax breaks have stalled in the Senate unless they were rolled into a broader package that also pared back Missouri’s existing tax credit programs. Lawmakers ultimately were unable to pass tax credit bills in recent years.
But this year, Senate leaders are taking a different approach, dealing with the sports incentives and tax credits for benevolent organizations as stand-alone bills in an attempt to show they are capable of breaking logjams. A broader overhaul of existing tax credits is to be heard in a Senate committee Wednesday.
“This is big business, and this is an opportunity to re-assert ourselves as a major player” in sports, said Sen. Eric Schmitt, R-Glendale, the bill’s sponsor and chairman of the Senate Jobs, Economic Development and Local Government Committee.
Some senators said Tuesday that they still have concerns about creating new tax breaks, but are willing to let this bill advance in the spirit of cooperation.
“Every one of these tax credits, I see as the enemy of real tax reform,” such as a reduction or elimination of state income taxes, said Sen. Ed. Emery, R-Lamar.
Under the bill, local governments or nonprofit groups that sponsor amateur sports events could get a state tax credit equal to their full costs or $5 for every ticket sold, whichever is less. The recipients then could sell those tax credits, generating cash to help subsidize the sporting event. The tax credits would be capped at $3 million annually.
Senators voted 25-7 against an amendment by Sen. Brad Lager, R-Savannah, that would have lowered the annual tax credit cap to $2 million.
Schmitt said the hit to tax revenues from the credit would essentially be offset if each visitor to a sports event spent a little over $100 — a figure he said is often far exceeded by out-of-state travelers staying at hotels, dining at restaurants and making other purchases.
He said a Southeastern Conference men’s basketball tournament — the conference the University of Missouri joined this school year — generates about $12.3 million in visitor spending, including about $296 per day per fan. The NCAA men’s Final Four basketball championship draws 92 percent of its fans from out-of-state and generates about $65 million in visitor spending, Schmitt said.
Missouri has hosted numerous NCAA men’s and women’s basketball tournament games in the past, including the 2005 men’s Final Four and the 2001 and 2009 women’s Final Four, all in in St. Louis. Kansas City has hosted the Big 12 Conference basketball tournament and NCAA tournament matches for college volleyball and wrestling.
In 2010, the head of the NCAA’s Division I men’s basketball tournament testified before a Missouri Senate committee that states and cities lacking financial incentives would have a much more difficult time competing for sports events in the future.
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