Council: Good for Austin Is Bad for Texas

F1 at the Circuit of the Americas

Photo by John Anderson

Last week's final City Council meeting of the year, Dec. 13, was officially anticlimactic, with plenty of predictable postponements to January and February. But one last-minute rush matter didn't get postponed, and it wasn't the fee waivers for the 2013 HOPE Market at Plaza Saltillo (that passed on consent). It was the resolution authorizing the Circuit Events Local Organizing Committee, aka CELOC, to apply to the state of Texas for funding from the state's Major Events Trust Fund for four more 2013 racing events (MotoGP, V8 Supercars, American Le Mans Series, and World Endurance Championship) at the Circuit of the Americas track in what is now officially annexed as far Southeast Austin. The new applications follow on the heels of Comptroller Susan Combs release of state funds (roughly $29 million) for Novem­ber's Formula One event, and the resolution means city staff will negotiate with CELOC an agreement along the lines of the earlier one signed for F1 – under which the state reimburses the promoters for expenses associated with hosting the event (estimated for these events in the $2-3 million range).

Although the resolution and the METF rules stipulate that the money is reimbursed from the state's portion of the increased event sales tax receipts, opponents on and off the dais described the arrangement as a shell game that overestimates the event income and thereby threatens city revenues. That was the line of argument taken up by Council Member Laura Morrison, who questioned city staff and attorneys closely on whether any state reimbursement would diminish city sales tax revenues; no, she was told, unless Council chose to do something to alter the current arrangement. Morrison had other objections to the deal, as did Kathie Tovo, who criticized Council's indirect acquiescence in the state's willingness to subsidize for-profit events while simultaneously slashing the budgets for public education and health care. "If I were representing Wichita Falls," Bill Spelman countered, he would also be objecting to the state's beneficence, which he described bluntly as a bad deal for the state, but a good one for Austin. "We get all the benefits of these events," he said, and only Morrison and Tovo disagreed: The resolution passed 5-2.

In other actions, Council also directed City Manager Marc Ott to determine whether he could find $10 million to pursue "near-term opportunities" for new affordable housing projects, despite (or because of) the recent defeat of Prop. 15, the affordable housing bond, by local voters. After some questioning by Chris Riley over environmental efficiency, Council voted to authorize purchase of 97 new police vehicles ($2.8 million). And in an attempt to combine sustainability and affordability, they voted to make future Austin Energy rebates for multifamily ­energy efficiency projects conditional on not raising rents – a condition, suggested Mayor Lee Leffingwell, that might undermine the program altogether.

See you in January.