Over 30 million Americans will take to the roads this Memorial Day weekend, and it’s all but guaranteed that many of them will be unhappy about the price of gas.  But while it’s easy to get frustrated by high prices at the pump, it’s also important that motorists realize gas taxes are not to blame for those high prices, and that gas taxes are absolutely essential to the safety and efficiency of the infrastructure we use everyday.

As the Institute on Taxation and Economic Policy ( ITEP) explains in a pair of new policy briefs, federal and state gas taxes are the main sources of funding for the roads, bridges, and transit systems that keep our economy moving (and that make our summer vacations possible).  Roughly 90 percent of federal transportation revenues come from the federal gas tax, while state gas taxes are the single most important source of transportation revenue under the control of state lawmakers.

Moreover, the amount of money we’re spending on gas taxes is much lower than what we used to pay. Families today are spending a smaller share of their household budgets on gas taxes than they have in about three decades—and that share is continuing to decline.

Of course, a low gas tax has a cost.  The federal government is increasingly using borrowed money to pay for our roads and bridges, while states that lack the luxury of borrowing are taking money away from education and other priorities in order to fund basic road repairs.  Meanwhile, even with these infusions of cash, the condition of our transportation infrastructure is continuing to decline.

ITEP’s new policy briefs put this issue into perspective by explaining how gas taxes work, their importance as a transportation revenue source, the specific problems confronting gas taxes, and the types of gas tax reforms that are needed to overcome these problems.

Read More:

• The Federal Gas Tax: Long Overdue for Reform (2-page brief)
• State Gasoline Taxes: Built to Fail, But Fixable (2-page brief)
• Building a Better Gas Tax (ITEP’s 50-state report from December 2011)

Photo of man pumping gas via Teresia Creative Commons Attribution License 2.0

Today, Governor Sam Brownback signed into law a radical tax bill that is projected to cost more than $2 billion over the next five years.  It also means the poorest 20 percent of Kansas taxpayers will pay 1.3 percent more of their income in taxes each year, or an average increase of $148, while the wealthiest one percent of Kansans will see their state income taxes drop by about $21,087 on average.  (See ITEP’s analysis of the Senate plan here for more figures.)

In terms of fairness, the legislation is tragic. Kansas is one of a few states that taxes food, but the Food Sales Tax Rebate (FSTR) has, until now, given targeted relief to taxpayers that are hit hardest by this regressive tax. By eliminating the FSTR, this new law makes it that much harder for low-income people to make ends meet.

The legislation also exempts from taxation all business income that companies “pass through” to owners  – something that no other state that taxes business income does. It’s likely that tax avoidance will increase as a result of companies reorganizing their corporate structure to take advantage of this loophole, which was, of course, billed as a tax cut for small businesses. If lawmakers wanted to offer assistance to small business owners, there are more targeted ways to do just that, through credits or limiting exemptions.

Other provisions of the bill include reducing tax rates down to 3.0 and 4.9 percent; increasing the standard deduction for head of household filers and married couples; and eliminating the Homestead Property Tax Refund for renters.

Proponents of the bill and Governor Brownback himself have said that the tax cuts will pay for themselves because of increased economic activity, but these supply side arguments are groundless.  As the Wichita Eagle opines, this “extreme makeover” of the state’s tax system is a “huge gamble,” and the odds are against Kansas recovering any time soon.

Photo of Governor Sam Brownback via King Content Creative Commons Attribution License 2.0

The accounting firm Ernst and Young (E&Y) just released a report, commissioned by the Motion Picture Association of America (MPAA), the purpose of which is to show that there are economic benefits for states that offer tax credits to film productions.  And since there are some economic benefits from almost every kind of business activity – including activity not getting tax subsidies – it shouldn’t be too hard to do.

The report, with its very un-Hollywood title, “Evaluating the effectiveness of state film tax credit programs: Issues that need to be considered,” however, is so riddled with wiggle words like can, could, may and might, you have to wonder if there is any evidence to support the claim that states reap economic development benefits when they give away tax credits to the film industry.  It’s as if the MPAA hired E&Y but then didn’t let them see any industry numbers.

For example, the section called, Case study of a credit program’s impact, is not a case study at all; rather, it’s a discussion of how a hypothetical $10 million production would result in nearly $19 million in economic activity, $ 4.4 million in wages and over half a million in new tax revenues – but it shows no calculations for how they reached these figures. For that level of detail, we are referred to an appendix, which has about the same information, adding only a little more detail about how a $10 million movie budget breaks down and some payroll averages. 

The only hard numbers from a real life example come from three instances in which a permanent film production facility was established. But the authors include an important caveat: “A state must reach a critical mass of productions to attract a studio investment, and not every state will be able to do so. Those that are able to attract a significant amount of production activity may [our emphasis] realize this benefit.”

Tax breaks for movies are like tax breaks for any kind of industry. Regardless of whether anyone can document the demonstrable economic benefits to the state, there is always a measurable cost of the tax deal itself, and the revenues not spent on public infrastructure.

The fiscal conservatives at the Tax Foundation read this same MPAA report and conclude, “The fact that E&Y's report is unwilling to call these programs successful, but rather limit itself to listing possible benefits, is telling. Their tepid conclusion should alert officials that even a paid-for study by a reputable firm can't prove something that's not true.”  The Tax Foundation also reports more states are abandoning tax credits for film production, realizing they don’t offer much economic bang for the fiscal buck.  Absent evidence that they do work – or at least some transparency about how well they work – elimination of these so-called incentives can’t come soon enough.

• On the controversial film tax credit front, movie goers should be thanking New Mexico taxpayers who gave away $22 million in tax credits to the Avengers movie – which has earned over $1 billion so far. The state doled out a total of $96 million in film tax credits last year.
• Stop the presses! There is public support for introducing corporate and personal income taxes in South Dakota. Read about it here.
• The list of tax cuts being promised by Indiana Gubernatorial candidate John Gregg continues to grow.  In addition to his earlier plan ,Gregg now promises to eliminate the corporate income tax for any company headquartered in Indiana, and to offer a variety of new “job-creation” tax credits to certain businesses, and to pay for it by asking online retailers to collect a sales tax from Hoosiers (despite the current governor’s agreement with Amazon.com to postpone such a tax until 2014).
• Yet another income tax cut proposal has been unveiled in Oklahoma, this time by Senate leadership.  In it, low-income families would fare poorly because it repeals the Earned Income Tax Credit and scales back the grocery sales tax credit.

May 16, 2 PM UPDATE: The House has passed SB1302 and it now heads to Gov. O’Malley’s desk, where he is expected to sign it.

Maryland lawmakers are on the verge of bucking a national trend.  While most of the biggest state tax debates in 2012 have focused on proposals that would cut taxes and tilt state tax systems even more heavily in favor of the wealthy, Maryland appears poised to do exactly the opposite.  On Tuesday, the state Senate voted to raise tax rates and limit tax exemptions for single Marylanders earning over $100,000 and for married couples earning over $150,000 per year.  The House is expected to follow suit by passing the same bill (SB1302) as early as Wednesday.

If enacted into law, these changes will allow the state to avoid a variety of cuts to vital public services, as detailed by the Maryland Budget and Tax Policy Institute.  But in addition to improving the adequacy of Maryland’s tax system, a new analysis from our sister-organization, the Institute on Taxation and Economic Policy ( ITEP), shows that the income tax changes contained in SB1302 would also lessen the unfairness of a regressive tax system that allows Maryland’s wealthiest residents to pay less of their income in tax than any other group.  Among ITEP’s findings:

• Because the income tax changes are limited to taxpayers earning over $100,000 or $150,000 per year, only 11 percent of Maryland taxpayers would face an income tax increase in 2012 as a result of SB1302.  (It’s worth noting, however, that increases in tobacco taxes, fees, and other provisions would affect additional taxpayers—though these increases make up just 3 percent of the bill’s total revenue.)
• 54 percent of the income tax revenue raised by SB1302 would come from the wealthiest 1 percent of state taxpayers—a group with an average income of nearly $1.6 million per year.  87 percent of the revenue would come from the top 5 percent of taxpayers.
• The changes in families’ income tax bills—even at the top of the income distribution—would be very modest.  After considering the "f ederal offset" effect, the tax increase faced by the top 1 percent of taxpayers would equal just 0.16 percent of their total household income, and taxpayers outside of the top 1 percent would face an even smaller increase.  Given the small size of these tax changes, Maryland’s tax system would undoubtedly remain regressive overall.
• The progressive nature of SB1302 means that it’s well suited to take advantage of the “ federal offset” effect mentioned above, whereby wealthier taxpayers write-off their state tax payments and receive a federal tax cut in return.  17 percent of the revenue raised by SB1032—or $28 million in tax year 2012—would come not from Marylanders, but from the federal government in the form of new federal tax cuts for Maryland taxpayers.

See ITEP’s full analysis here.

• Michigan Governor Rick Snyder is voicing support for federal legislation that would allow states to collect sales taxes owed on purchases made over the Internet, but he has little interest in pursuing a state-level law that would allow Michigan to begin chipping away at the problem.

• The Gazette has an article about the failure of Maryland legislators to raise the gas tax during their recently concluded regular session.  It cites research from the Institute on Taxation and Economic Policy ( ITEP) showing that the state’s gas tax rate would need to rise by 15.8 cents just to offset the last two decades of construction cost inflation.  In the article, Governor O’Malley explains the obvious: high gas prices caused lawmakers to delay this overdue reform, again.

• Legislators in New Hampshire were well on the way to eliminating a tax on internet access, until a flap between the House and Senate over other provisions in the legislation derailed it. Still, leadership in both chambers remain committed to eliminating the tax that appears on consumers’ broadband and wireless bills.  But the New Hampshire Fiscal Policy Institute ( NHFPI) warns against eliminating the tax in a recent report which explains that $12 million in annual revenues are a stake, and that better, more targeted options for reducing taxes on New Hampshire families are available.

• This week, New Hampshire gubernatorial candidate Bill Kennedy came out with his own proposal to reduce property and businesses taxes and make up for the loss of those revenues by introducing a personal income tax in the state, which is one of nine states that doesn’t levy one. At the same time, the Granite State’s Senate is about to take up a radical and constraining proposal to amend their constitution to make sure no personal income tax can ever be levied. Stay tuned.

Virginia Governor Bob McDonnell wants to make tax reform a top priority during his upcoming (and final) year as Governor, according to the Associated Press (AP).  But while Virginia’s tax code is no doubt in need of reform, it’s hard to tell from the AP article what kind of change Virginians can realistically expect.

Virginia currently foregoes some $12.5 billion in tax revenue every year as a result of special breaks buried in the state tax code—almost as much as the $14.3 billion in annual revenues the Commonwealth takes in.  McDonnell said, “I think it’s time to take a look at all those tax preferences, both in income and sales, and see if there is not some way … we can save some money and put it into transportation.”

While such a development would be a positive one, McDonnell contradicts himself when he says that raising revenue is out of the question, and that the tax reform he has in mind might even reduce revenue overall.  Given that commitment, Virginians might expect the condition of their ailing transportation system to improve, but at a cost to other state services.

Moreover, there’s reason to be skeptical about how committed McDonnell really is to broadening the tax base.  While he’s right to point out that services like car repairs and pedicures should be subject to the state sales tax, his actual track record is not inspiring. Just two months ago, for example, McDonnell signed into law an expansion of a wasteful corporate tax giveaway that narrowed the tax base, despite very good reasons to doubt its effectiveness.

On transportation funding, too, McDonnell’s track record conflicts with his talk of tax reform. He has consistently refused to support tying—or “indexing”—the state’s stagnant gas tax rate to inflation, but now he says that “there may be a way to do that in the overall context of tax reform.”

That’s hardly a ringing endorsement of the idea, but at least it’s a start.  The Institute on Taxation and Economic Policy ( ITEP) recently found that only Alaska has gone longer than Virginia without raising its gas tax. And if Virginia lawmakers had indexed the state gas tax to construction costs the last time the tax was raised, annual revenues would be some $578 million higher.

But indexing by itself is not enough to fix the state’s legendary transportation problems.  Indexing helps prevent future construction cost increases from eating into gas tax revenue, but it doesn’t address the cost increases that have already occurred. According to ITEP, Virginia’s gas tax would have to immediately rise by 14.5 cents just to offset the last two and a half decades of transportation cost growth. 

But even if McDonnell believed the state’s gas tax needs to be raised and indexed, his opposition to raising any new revenue overall is almost guaranteed make his reform agenda bad for the state.  That’s because every dollar in new revenue McDonnell might generate for transportation would have to be offset with a dollar in tax cuts elsewhere in the budget—presumably from a tax that funds education, human services, public safety, and other core government functions.  The AP story says McDonnell sees a reformed tax code as his own legacy, but what about the legacy he leaves the Commonwealth?

Photo of Rand Paul via Gage Skidmore Creative Commons Attribution License 2.0

House Ways and Means chair Paul Ryan’s budget proposal drew plaudits from some observers who didn’t notice its fundamental weakness: its utter failure to specify which tax “loopholes” it would close to pay for deficit reduction. As we’ve noted in the past, Ryan has a good reason not to disclose details on the tax side of his plan: they don’t add up. CTJ has shown that the Ryan plan’s promised top income tax rate of 25 percent would be insufficient to pay for federal spending at Reagan-era levels, let alone the current decade. 

Now, as details of Ryan’s plan emerge, it’s becoming clearer that its spending cuts are equally illusory, relying on alleged cost-saving measures that would likely cost more in the long term than they help right now. Case in point: Ryan’s plan to eviscerate the Census Bureau and eliminate its American Community Survey (ACS), an annual survey that provides a rapid-response supplement to the decennial Census.

As Businessweek notes, cuts to Census budgets in the past decade prevented Congress and the Obama administration from being able to quickly diagnose the scope of the financial sector’s collapse in 2007.  One expert observed, “The government saved $8 million, but how many trillions were lost as a result of not being able to see the crisis coming?”

Ironically, as the New York Times explains, the ACS itself was actually created as a sensible cost-cutting strategy, designed to provide more timely data than the decennial Census could.  Even the US Chamber of Commerce has vocally opposed further cuts to Census funding because it helps businesses large and small to inform their planning.  Which is why top conservative policy think tanks support the ACS, too.

An adequately funded Census Bureau is the best vehicle we have for finding a path to sustained economic growth for all of us; there is widespread agreement that without its data, we will be flying blind.

• Rhode Island lawmakers are considering legislation that would help the state better evaluate the nearly $1.6 billion in special tax breaks it hands out every year.  The way the bill couples evaluations of the tax expenditures and sunsets (i.e. expiration dates on tax breaks) is closely in line with what commissions in Massachusetts and Oklahoma have recently proposed.  Testimony from the Economic Progress Institute in support of the bill can be found here.

• Here’s a refreshing piece of news: A Texas judge has ruled that oil and gas companies can’t benefit from a special state sales tax break on equipment designed to aid manufacturers.  Southwest Royalties Inc. apparently tried to argue that removing oil from the ground should count as “manufacturing.”

• Good news in the Sooner State – new polling shows that Oklahomans oppose a regressive cut in the income tax rate, paired with tax credit reductions, by a 42-35 percent margin.  If education cuts are used to pay for the tax cut, the margin of opposition grows to a whopping 81-16 percent.  Oklahoma lawmakers are seriously considering a variety of income tax proposals that would likely require cuts in both tax credits and education spending, so let’s hope that they stop to listen to their constituents first.
• The details of the coming Maryland tax package that we mentioned earlier this week are beginning to take shape.  The Washington Times reports that income taxes will likely be raised on families earning over $100,000 per year, in a manner very similar to what lawmakers almost enacted at the end of the regular session. More as it happens.

• Last Friday, Minnesota Governor Mark Dayton vetoed a tax plan passed by the legislature which would have frozen statewide business property taxes permanently– and cost the state over $2 billion. He called the bill “fiscally irresponsible.” Thursday the Minnesota legislature gave approval to a smaller tax package that, among other things, only froze business property taxes for a single year.  Though the scaled down version is now on its way to the Governor's desk, the  Minnesota Budget Project  writes that the fate of this bill is up in the air:  “The bill may not receive Governor Dayton’s signature, as it still draws upon the state’s budget reserve and adds to future deficits, two things that he has opposed throughout the legislative session.”

It’s no longer news to most Americans that big, profitable corporations from Apple to General Electric are finding creative ways to zero out their income taxes.  Two widely cited recent reports on federal and state taxes from CTJ and ITEP identified dozens of companies that have achieved this dubious goal.

But the big news out of Illinois this week is that at least in the Land of Lincoln, lawmakers are taking positive steps towards doing something about rampant corporate tax avoidance. A bill introduced Wednesday by Senate President John Cullerton would require publicly traded companies to make available some basic information about the amount of state income taxes they pay, and specify which tax breaks reduced their taxes. The bill would also require companies to disclose their profits generated in Illinois, making it easy for lawmakers and the public to know whether these companies are really paying tax at the legal rate.

While the bill was approved by a Senate committee and sent to the Senate floor on Wednesday, its prospects for passage this year remain murky. And identifying the beneficiaries of unwarranted tax breaks is obviously only a first step towards repealing those tax breaks. But this legislation, along with a similar bill championed by the California Tax Reform Association in the Golden State, likely represents the beginning of a shift toward more transparency in corporate taxation—and that can only lead to improvements in the fairness of our overall corporate tax system.

Right now virtually every state (there are a few signs of hope) fails to disclose even the most basic information about corporate tax breaks. The Center on Budget and Policy Priorities’ Michael Mazerov has the dirt on how your state can move in the right direction, as does the encyclopedic Good Jobs First.

Photo from Senator Cullerton's legislative website.

Governor Terry Branstad has made “reforming” (cutting) the property taxes paid by Iowa businesses a top priority since taking office. The good news is that his latest proposal to accomplish that goal seems to have fallen short; unfortunately, this one was coupled with an increase in the state’s earned income tax credit (EITC), so it also fell by the wayside.

Last year we explained that Branstad’s first  proposal would have allowed businesses to shelter a full 40 percent of their property’s value from the property tax (by assessing commercial property at only 60 percent of its actual value for tax purposes). The plan was estimated to cost as much as $500 million annually, but it ultimately failed.

On Tuesday, a Senate bill which offered a targeted property tax credit aimed at small businesses (and in some cases offering more relief to businesses than the Governor’s original proposal) was also narrowly voted down, 24-23. The Senate refused to even vote on a more costly tax cut proposal that passed the House, which would have assessed commercial property taxes at 90 percent of their actual value for tax purposes, taking effect over five years. Reports point to effective lobbying by cities and towns whose leaders came out against drastic cuts to business property taxes. One county, for example, stood to lose $7.3 million in just one year.

Governor Branstad is not giving up, though, and called on Iowans to vote out any legislator who voted against these business tax cuts. For now, it appears that counties and cities can breathe a sigh of relief. The same is not true, however, for the working poor who rely on the EITC to fill gaps in their household budgets; any increase in their tax credit won’t come around again until next year, either.

Maryland Governor Martin O’Malley announced that he will call a special legislative session to start next week.  Lawmakers are widely expected to pass a progressive income tax package in order to avoid massive “doomsday” budget cuts.

Tennessee’s inheritance tax will be eliminated beginning in 2016.  Legislators recently sent Governor Haslam a bill repealing the tax, seduced by bogus claims about the economic benefits of repeal.  Lawmakers also passed two other notable tax cuts: one repealing the gift tax (which The Commercial Appeal says will benefit Gov. Haslam himself, along with other wealthy taxpayers), and another cutting the state sales tax on groceries by a quarter of a percent.

The gubernatorial race in Washington State is heating up and costly tax expenditures are getting long overdue attention from the candidates. But as this piece in the Seattle Times highlights, eliminating spending programs embedded in the tax code is easier said than done.  Read CTJ’s advice for how to do it here.

Finally, check out this timely column describing why Minnesota Governor Mark Dayton should veto a bill passed by the legislature under the guise of job creation. (Hint - it’s really a massive tax cut for business.)

• Florida Governor Rick Scott is attending grand openings of 7-Eleven® stores but a columnist at the Orlando Sentinel observes that “if incentives and low corporate tax rates were working, Florida wouldn't rank 43rd in employment.”  It’s a common sense column worth reading.

• As another massive tax cut for Michigan businesses continues to make its way through the legislature, the Michigan League for Human Services chimes in with a report, blog post, and testimony on why localities can’t afford to foot the bill for state lawmakers’ tax-cutting addiction.
• Bad tax ideas abound in Indiana’s gubernatorial race.  Democratic candidate John Gregg wants to blast a $540 million hole in the state sales tax base by exempting gasoline; he claims he can pay for it by cutting unspecified "waste" from the budget. And Gregg’s Republican opponent, Mike Pence, doesn’t seem to have any better ideas.  So far he’s only offered a " vague proposal" to cut state income, corporate, and estate taxes – without a way to pay for those cuts.

• Kansas lawmakers are feverishly working to meld differing House and Senate tax plans into a single piece of legislation. Governor Sam Brownback has endorsed an initial compromise which includes dropping the top income tax rate and eliminating taxes on business profits. Earlier in the week the Legislative Research Department said the plan would cost $161 million in 2018 and new state estimates say the price tag is more like $700 million in 2018.  Senate leaders have said that they aren’t likely to approve a tax plan that creates a shortfall in the long term. Stay tuned....

• Finally, a USA Today article should give pause to lawmakers hoping that drilling and fracking for natural gas leads to a budgetary bonanza.  It explains how the volatile price of natural gas is creating headaches in energy-producing states like New Mexico, Oklahoma, and Wyoming where a dollar drop in the commodity’s price means a budget hit of tens of millions.

In a span of less than two weeks, commissions in two very different states – Massachusetts and Oklahoma – have issued remarkably similar recommendations on how to deal with the slews of special tax breaks that evade scrutiny and accountability year after year, budget after budget. As CTJ has pointed out, state budget processes are essentially rigged in favor of tax breaks (loopholes, subsidies) and as a result it’s become far too easy for lawmakers to enact (and extend) tax giveaways for virtually any purpose imaginable.

In Massachusetts, the Tax Expenditure Commission just released eight recommendations designed to deal with this very problem.  According to the Commission, lawmakers should clearly specify the purpose of all tax breaks (or “ tax expenditures”) so that analysts can begin evaluating their effectiveness on an ongoing basis and providing realistic policy recommendations to lawmakers.  The Commission further urged that those evaluations be carefully timed to coincide with the state’s normal budget process, and even suggested that some tax expenditures be scheduled to sunset (or expire) so that lawmakers are forced to debate those breaks after the evaluations are complete and the facts are out.

In Oklahoma, the Incentive Review Committee recently released its set of recommendations dealing with one category of tax expenditures in particular: those ostensibly aimed at spurring economic development.  As in Massachusetts, the Oklahoma Committee said that lawmakers need to more clearly articulate the purpose of tax breaks, and that evaluations of those breaks should be done in a rigorous and ongoing fashion. One of the Oklahoma Committee’s more important recommendations might sound obvious at first, but it’s actually often overlooked: good evaluations take time and resources, and the state should adequately fund whichever department is charged with completing the evaluations.

Jon Stewart hilariously skewered the phrase “spending reductions in the tax code” as another way of saying taxes need to be raised. These tax commissions (as well those in Minnesota, Missouri, and Virginia), tasked with realistically assessing state budgets, are forcing Americans to recognize that spending through the tax code exists and that it requires the same level of scrutiny as spending through government programs, as previously outlined by CTJ.

The history of states subsidizing professional sports stadiums with taxpayer dollars is long and, increasingly, controversial. Maryland provided nearly one hundred percent of the financing for the Orioles’ and Ravens’ shiny new facilities in the 1990s. In 2006, the District of Columbia subsidized the Washington Nationals’ new stadium at a cost to taxpayers of about $700 million.  And even though most stadiums are, in the long run, economic washes at best, losers at worst, there are still politicians willing to throw money at them.

Minnesota legislators, for example, are currently grappling with how to fund a new stadium for the Vikings in response to threats that the franchise may leave the state.  But before the legislature gives away nearly a billion dollars, State Senator John Marty raises some excellent points about the math, and morals, behind the proposed taxpayer subsidies for the stadium:

“The legislation would provide public money in an amount equivalent to a $77.30 per ticket subsidy for each of the 65,000 seats at every Vikings home game. That's $77 in taxpayer funds for each ticket, at every game, including preseason ones, for the next 30 years.… Public funds can create construction jobs, but those projects should serve a public purpose, constructing public facilities, not subsidizing private business investors. The need to employ construction workers is not an excuse to subsidize wealthy business owners, especially when there is such great need for public infrastructure work.” 

In  Louisiana, the House of Representatives has gone ahead and approved a ten-year, $36 million tax subsidy  to keep the state’s NBA team, the Hornets, in New Orleans until 2024. Some are asking if the state can really afford it given a $211 million budget gap.  Representative Sam Jones noted that while the state has cut health and education spending, it still found a way to come up with millions of dollars to help out the ”wealthiest man in the state.” That would be Tom Benson, owner of not only the Hornets but the legendary New Orleans Saints football team, whose net worth is $1.1 billion dollars.

In California, however, a different scenario is unfolding. Sacramento Mayor Kevin Johnson just abandoned negotiations with owners of the city’s NBA team, the Kings.  The Kings organization was unwilling to put up any collateral, share any pre-development costs, or commit to a more than a 15 year contract; this would have left the city shouldering all the costs – and all the risks – for developing the $391 million downtown facility.  Mayor Johnson said he’d offered everything he could to the team and it still wasn’t enough, so he pulled the plug. 

Given the high cost and low return (including in terms of jobs) that sports facilities generate, more leaders should follow Minnesota’s Marty and Sacramento’s Johnson and stand up for the taxpayers who pay their salaries.

(Thanks to Field of Schemes and Good Jobs First for keeping tabs on these subsidies!)