John Wright and Owen Laughlin passed the NBA giveaway test

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In two statewide primary races, the leading Republican contenders were both members of the Oklahoma Legislature in 2008. The top candidates for the GOP nominations for Lieutenant Governor and State Treasurer were on opposite sides of the 2008 expansion of the Oklahoma Quality Jobs Act to include professional sports franchises, part of the effort to "lure" the Oklahoma City residents who owned the Seattle SuperSonics to bring the team to Oklahoma City.

State Rep. John Wright and State Sen. Owen Laughlin were wise and principled enough to vote against the giveaway; State Sen. Todd Lamb and State Rep. Ken Miller voted for it.

(In case you're wondering, State Sen. Randy Brogdon also voted against the NBA giveaway. Anyone remember whether Congresswoman Mary Fallin backed Maps for Millionaires or SB 1819?)

According to a February 2009 press release from the Oklahoma Department of Commerce, the Professional Basketball Club LLC, owners of the Oklahoma City Thunder, qualify for a maximum benefit of over $100 million dollars over 10 years. That's money that the Thunder owners would otherwise be paying into the state treasury.

The idea behind the Oklahoma Quality Jobs Act, passed in the 1990s, is to offset some of the costs that businesses face when adding new employees and to make Oklahoma more attractive for companies to relocate or expand. Certain types of jobs and businesses are targeted -- mainly jobs involving skilled labor or high technology and companies which bring new dollars into the state by selling their products and services out of state. (Here's the Oklahoma Department of Commerce guidebook on the program.)

Expanding this act to subsidize an NBA team completely subverts the original purpose of the act, and I was disgusted that so many Republicans -- particularly Tulsa Republicans -- voted in favor of the expansion (SB 1819, 2008 legislative session). I wrote at the time:

The idea [behind the Quality Jobs Act] is that these companies are bringing dollars and good jobs into the state, and the resulting increase in payroll and consumer spending will bring in more than enough new revenue to the state treasury to compensate for the payroll rebates.

An NBA team doesn't fit those criteria, no matter how much it may boost our state's self-esteem. Instead of bringing new revenue in from out of state, a pro basketball team will merely reapportion the way Oklahoma City residents spend their disposable income.

Study after study shows that a major league sports team doesn't grow the local economic pie; it simply competes with other entertainment and leisure businesses for a share of the same pie. The Sonics owners made that very case in a Seattle courtroom, as part of their effort to break the lease on Seattle's Key Arena, arguing that the team had a negligible impact on the local economy.

It gets worse:

A couple of special provisions were added to the Quality Jobs Act to make it an even sweeter deal for the Sonics and a much worse deal for taxpayers. While the tax rebate usually only applies to salaries that are taxable in Oklahoma, the Sonics will still get the rebate "regardless of whether Oklahoma income tax is or will be due on such wages." So we'll be paying the subsidy on a player's salary, even if he maintains residency and gets paid in Washington state, which has no state income tax.

And while Quality Jobs rebates are limited to 10 years for all other industries, sports teams get rebates for 15 years. All this for 41 home games a year....

[A press] release [from Speaker Chris Benge] reveals we're paying a high price for [national] exposure: In return for the $60 million subsidy, "[i]t is estimated that local and state tax revenue to the state over a 15 year period will be $11.2 million." That's a revenue loss of $48.8 million.

I've known John Wright for many years and know him to be a consistent, across-the-board conservative and an honorable man, so I was already inclined to support him for Lt. Governor. His vote against SB 1819 confirms my judgment that he will make decisions in the best interest of all Oklahoma taxpayers. He won't be swept away by emotional appeals or lobbyist pressure.

I was undecided in the State Treasurer's race, not knowing either candidate personally. Both claim to be fiscal hawks.

Owen Laughlin voted against SB 1819 and for fiscal sanity. In the current campaign, he offers a plan to improve the state's budget by $100 million a year, without raising taxes.

Ken Miller says he "has never supported a tax increase," but by voting to give money to the Thunder, he certainly made life harder for the vast majority of Oklahomans who will never see any fiscal or cultural benefit from an NBA team. Miller says on his campaign website, "The best thing the state government can do to encourage economic growth is to simply stay out of the way of private citizens," but his vote for SB 1819 undercuts his claim to that creed. Thunder co-owner Clay Bennett's endorsement is prominently featured on Miller's site.

While Miller and Lamb would both represent an improvement over the current Democratic occupants of the offices they seek, they failed a crucial test on an issue that will only grow in importance during these tight financial times -- how should government be involved in encouraging private business expansion.

Way back in 2008, I wrote:

None of the supporters of SB 1819 are likely to pay come election day -- the benefits are concentrated and the costs are diffuse -- but I will be keeping this vote in mind should any of them seek higher office. How someone voted on SB 1819 is an indication of that legislator's susceptibility to lobbyist pressure and view of the proper role of government in economic development.

BACKGROUND: This BatesLine entry includes an excerpt from a study showing that having a pro sports franchise tends to decrease a community's per capita income. Why does this happen?

First, consumer spending on sports may simply substitute for spending on other types of entertainment--and on other goods and services generally--so there is very little new income or employment generated. Sports fans that attend a game may reduce their visits to the movies or to restaurants to free up finances for game tickets and concessions. Patrons of local restaurants and bars who come to watch the games on television also are likely to cut back on their other entertainment spending.

Second, compared to the alternative goods and services that sports fans may purchase, spending related to stadium attendance has a relatively small multiplier effect. This is because spending at the stadium translates into salaries for wealthy athletes, many of whom live outside the city where they play. High-income individuals generally spend a smaller fraction of their income than low- and middle-income people--and much of the spending professional athletes do occurs in a different community than where they earned it. So the money paid to players does not circulate as widely or abundantly as it would were it paid to people with less wealth and more attachment to the city.

MORE: Earlier this year, State Rep. Ben Sharrer (D-Pryor Creek) explained his vote against the NBA giveaway:

Two years ago I represented your interests by fighting against extending the [Quality Jobs] Act to professional basketball franchises. I just didn't think it seemed right that your tax dollars should be sent to wealthy businesspeople for a team in Oklahoma City when most my constituents would never see a game from courtside or a luxury box, much less a seat in the nosebleed section....

You don't get credit as being an owner, but I've heard your tax dollars will pay the Thunder owners nearly $6 million this year. Gee, that amount of money would have saved nutrition programs for senior citizens across our state this year.

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This page contains a single entry by Michael Bates published on July 20, 2010 12:18 AM.

Urban history online: Retro Metro OKC, Tulsa 1927 was the previous entry in this blog.

Mary Fallin disparages following the Constitution as "the easy way out!" is the next entry in this blog.

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