Reality-BasedTM Political Numbers from Nicholas Beaudrot
Electoral Math
Reality-BasedTM Political Numbers from Nicholas Beaudrot
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Thursday's P-I included a chart covering the various funding sources for proposed Renton Arena for the Sonics. To recap, new Sonics owner Clay Bennett went to the state leg' asking for $300M in public financing, plus another $100M from the City of Renton.
The good news is, the House Ways & Means Committee funds the Arena entirely by extending existing taxes put in place to help pay for other pro-sport sites, not by raising new taxes. What's more, hotel tax and car rental tax are a classic tax on other people's money and a tax on some of the "winners" from the new arena. The [restaurant] food and beverage tax doesn't fall directly on the winners.
The biggest political obstacle is the sales tax credit, dedicating a portion of state sales tax revenue to Arena construction. This represents money that might otherwise go to another region in the state, or go to other priorities like education and health care. In the context of a state's entire budget, it's not a huge amount of money—$155 million over 9 years works out to $17.2 million per year, in a state that spends almost $6 billion per year on K-12 education (pdf). It's probably enough to build and staff one or two schools. Every little bit helps, though, so I wouldn't scoff at Speaker Chopp's desire not to spend money on a stadium.
The other kicker is Bennett's suggestion of $100 million from the City of Renton, which has an annual budget of approximately $170 million with capital expenditures near $25 million. Spreading the financing over the 20 year life of the stadium, the Sonics are asking for a 3% increase in city expenses, and a 20% increase in capital improvements. This would imply a serious tax increase in the city, unless Renton decides to raise the cost of its permits & fees to help pay for the arena. To get an additional $5 million/year out of the sales tax or property tax would mean an overall increase of around 12.5%—if Renton's rates were 100 mills and 4%, they could raise them to 112 mills and 4.5%, respectively. I'm not sure how the homeowners, landlords, and residents of Renton feel about that, pro or con.
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updated by Nicholas Beaudrot on 11:34 18 February 2007
