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EDITORIAL: NO NEW TAXES ON STADIUM? THINK AGAIN
STADIUM

Editorial: Nixon's 'no new tax burden' pledge on stadium rings hollow(er)

nixon stadium cartoon
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Two summers ago, Gov. Jay Nixon traveled the state making an argument he has repeated many times about how contradictory Missouri’s budget priorities sometimes are.

Mr. Nixon and the school superintendents who were backing him applied political pressure on local lawmakers so they wouldn’t override his veto of a massive tax cut bill supported by wealthy Republican campaign donor Rex Sinquefield.

The governor won on the strength of this argument: You can be for education, he said. Or you can be for the tax cuts for the wealthy. But you can’t be for both.

He was right. But now that argument is coming back to haunt Mr. Nixon as he peddles the falsehood that a proposed new NFL football stadium along the north riverfront in St. Louis would come with “no new tax burden.”

In fact, that “new tax burden” would be extensive, and some of that money would undoubtedly come at the expense of funding public schools, already underfunded by at least $400 million, according to state law.

On Thursday, in a story that outlined the latest breakdown of proposed costs in the nearly $1 billion stadium, the Post-Dispatch’s Tim Bryant revealed that Mr. Nixon’s plan involves seeking $50 million in tax credits from the Missouri Development Finance Board.

The board is stacked with Nixon appointees so approval is all but guaranteed, but that’s not the point. The concept of intellectual honesty — already strained by the idea of rolling over existing Edward Jones Dome bonds to cover a new stadium — takes another hit if the governor and other stadium backers are going to suggest that $50 million in tax credits isn’t a new burden on taxpayers.

Here’s how tax credits work:

Once issued by a state agency, or the Legislature, depending on the form of tax credit, the entity that receives the credits sells them through third-party brokers at a discounted rate to investors looking to offset income taxes otherwise owed the state.

Generally, wealthy individuals or corporations with big tax bills can get a dollar’s worth of tax credits for around 92 cents.

The end result, in this case, is $50 million less in the state’s general revenue coffers when those credits are redeemed.

That money must come from somewhere.

When he was opposing Mr. Sinquefield’s income tax cut, Mr. Nixon correctly said the money would likely come from schools. That’s the same argument former state Sen. Jason Crowell, a conservative Republican from Cape Girardeau, made in seeking Legislative authority over tax credits a few years ago.

The way Mr. Crowell saw it, the spending of tax credits should be determined hand in hand with other budget decisions. If it’s a tight year, issuing of tax credits should be weighed against funding schools, for instance. But Mr. Crowell lost that battle, so that’s not how the state budget works.

Developers, and owners of other tax credits, get their tax credit money off the top, before other state needs are addressed. Education is the biggest of those needs.

So in seeking $50 million in tax credits to help finance an NFL stadium, Mr. Nixon has backed himself into a corner. You see, he can be for schools. Or he can be for stadiums. But he can’t be for both.

If Mr. Nixon wants to get out of that corner, he needs to come clean.

This page has maintained that there is enough economic benefit from redeveloping the north riverfront, keeping the NFL in the city, and building a new stadium, that the stadium project might be worth the investment, but only if voters have a say in the new tax revenue they will be committing.

Extending hundreds of millions of dollars worth of bonds originally intended to build a convention center is most definitely a “new tax burden.” So is $50 million in new state tax credits. In their rush to convince the NFL that St. Louis is “an NFL city,” Mr. Nixon and his minions flunked a fundamental test of good government: public transparency.

Had Mr. Nixon and other stadium backers, including St. Louis Mayor Francis Slay, sought a public vote, as they should have, that vote could have been held Aug. 4, in plenty of time before the NFL makes its decision.

As it stands currently, voters will have no say over the new taxes public officials might commit them to in the name of reducing a billionaire’s new stadium burden.

Of course, that was by design. As emails from Mr. Slay’s former chief of staff Jeff Rainford have shown, the stadium discussions began with civic leaders conspiring to avoid scrutiny by skirting state Sunshine Laws. Dumb move.

To borrow a metaphor from the NFL’s own recent issues with integrity, there is still time for Mr. Nixon and friends to put the deflated footballs away and play the second half clean.

Tell the truth. Have a public debate. And let the stadium football bounce where it may.

Tony Messenger • 314-340-8382

@tonymess on Twitter

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