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Sports subsidies in Texas: lotsa bucks, little bang

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LM Otero/AP/File

(Read caption) Boise State's David Mikell (3), Mike MacLeod (66) and Kellen Wright (59) carry a trophy after beating TCU in the inaugural Fort Worth Bowl in Fort Worth, Texas, in 2003. Texas officials don't follow up to see if sports events bring cities the revenues promised by promoters.

View photo has a good story on the economic impact of mega events in Texas that is largely based upon a paper written by TSE’s own Dennis Coates and Craig Depken. Read the whole thing, like they say, but I want to focus on one secti0n of the article.

As you no doubt know, the staff here at TSE are not big fans of those economic impact statements commissioned by those seeking public subsidies for sports. This is because the research of (independent) economists looking at the historical record find, time and again, that the claims made by the (paid) consultants in the impact statements are overblown.

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The author of the article asked an official of the Texas comptroller’s office, the office charged with giving out the subsidy dollars, why his office doesn’t bother to see if the claims of the impact statements held up.

The host committees of big games, like the North Texas Super Bowl in Arlington next year, pay consultants to write studies saying how much money the events will bring in.

Then it’s up to (Robert – PM) Wood’s office (Texas Comptroller’s office – PM) to decide — based on the consultant’s study — how much money the state will donate.

No one has ever been turned down.

After the final whistle has blown, the comptroller does not check to see if the event generated the tax money the consultant said it would. “We don’t have the resources to check,” Wood said.

Perhaps if a subsidy request were denied, then there would be some resources available. But when you’re using other people’s money on other people….

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