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By Ryan Prete
Louisiana and Tennessee lawmakers are proposing to cut millions in state tax subsidies received by their local National Football League teams in response to athletes kneeling during the national anthem.
Both proposals came after President Donald Trump tweeted that NFL players who kneel during the national anthem should be fired.
Louisiana state Rep. Kenneth Havard (R), who wants to cut millions in New Orleans Saints tax breaks, told Bloomberg BNA that significant portions of the tax subsidies come from free rent of the Mercedes-Benz Superdome—built using public dollars—that’s owned by the state and utilized by the Saints for home games. Louisiana also allows the Saints organization to keep all of the profits from anything sold in the Superdome—tax free—according to Havard.
Havard called for the subsidy cuts in a Sept. 24 news release, stating that “it is time the taxpayers quit subsidizing protest on big boy playgrounds. I believe in the right to protest but, not at a taxpayer subsidized sporting event. Do it on your on time.” Havard argues that tax dollars subsidized to the Saints organization should instead be used for free housing, free healthcare, free education, and free lunch.
In a Sept. 26 news release, Tennessee state Rep. Judd Matheny (R) also ordered legislation be introduced to “stop any and all future economic incentives to professional and amateur privately owned sports teams in Tennessee.”
When asked about Havard’s call for subsidy cuts, the Saints’ Senior Vice President of Communications Greg Bensel told Bloomberg BNA in an email that the organization is to thank for millions in state revenue.
“The New Orleans Saints have not received a state inducement since 2009. The only revenue the New Orleans Saints get from using the state-owned Mercedes-Benz Superdome is what we produce in concessions and parking,” Bensel said. “Our team generates north of $400 million in economic impact on the region—and more than $20 million annually in taxes paid into the state’s general fund. In addition—we put $25 million into new video boards at the Superdome that helped our city/state get the” NCAA Final Four.
Benson and the Saints are estimated to rake in $392 million from state tax subsidies by 2025.
This includes payments from the state that also rents multiple floors of Benson Towers, a 26-story building located in New Orleans that offers both office and residential leases. The tower belongs to Tom Benson, who owns the New Orleans Saints and the National Basketball Association’s New Orleans Pelicans. According to Havard, the state rents the floors out at an inflated price as part of the tax subsidies offered to the team.
Havard estimates the state pays Benson well over $10 million a year for the rented floors, which Havard said are unused.
Sean Packard, tax director at the McLean, Va.-based sports agency Octagon Financial Services, told Bloomberg BNA that any effort to take money from owners pockets could push the organization to make move to a different city.
“If an owner can find a location where subsidies won’t be jeopardized, they could of course be inclined to make a move,” Packard said. “Of course, with an issue like this, the call to slash subsidies could just be political posturing by the lawmakers.”
Packard noted that New Orleans is the smallest metropolitan area to have more than one “Big Four” team, which consist of the NFL, NBA, Major League Baseball, and National Hockey League.
When the Louisiana Legislature convenes in March 2018, Havard says he can attempt to add an amendment to the state’s appropriations bill to cut or eliminate subsidies. The proposed amendment would need a simple majority vote to pass.
“I’ve had 20 to 30 calls backing my proposal from around the state, and overall I’d say 85 percent of all the calls I’ve received have been in support of the idea, but have not heard anything from Congress or the Governor’s office,” Havard told Bloomberg BNA.
U.S. Congressmen from Louisiana Ralph Abraham (R), Clay Higgins (R) and Mike Johnson (R) all declined to comment on Havard’s press release. Senators Bill Cassidy (R) and John Kennedy (R) didn’t return a request for comment.
In Matheny’s news release, he echoed Havard’s position.
“As long as professional and minor league sports teams allow their players to show overt disrespect to our national anthem and flag during an official event then there will be no consideration of state funding,” Matheny said.
“This includes direct and indirect monies for stadiums, maintenance, or any other cost associated with a sports team’s functions both in and out of their official seasons,” he added. “Teams may obviously still use private monies to buy land, advertise and hold sporting functions or special events at their privately owned venues but all traffic control, security costs and related expenses necessary to insure safety for patrons provided by the State must also be fully reimbursed to the State of Tennessee.”
Matheny said that if teams “decide to get back to their business of just playing their sport and being good role models,” the state could revisit the issue with a future legislature.
Leah Robinson, partner and State and Local Tax Group lead at Mayer Brown LLP, told Bloomberg BNA in an email that subsidies are often offered to mold a person’s lifestyle or habits.
“Taxes, and therefore incentives, are sometimes designed to shape behavior—soda taxes, tobacco taxes, mortgage interest deductions. I guess we have to ask whether the behavior Rep. Havard is trying change is an appropriate one for the government to try to control or discourage,” Robinson said. “At a minimum, withdrawing incentives because of the recipients’ and recipients’ employees’ political views is a really slippery slope.”
Robinson said this wouldn’t be the first time a politician has withdrawn incentives because they didn’t fit the views of the recipients.
“Just a few years ago, New Jersey Governor Chris Christie withdrew an incentive for the MTV show Jersey Shore,” Robinson said. “The Governor withdrew support because, in his view, the show’s cast members did not represent New Jersey in the light he wanted it represented in.”
Florida’s Legislature is likely to consider one or more proposals in 2018 to end public subsidies of professional sports teams. State lawmakers considered but rejected proposals in both chambers during their 2017 session.
Rep. Richard Corcoran (R), speaker of the state House, broadly opposes tax subsidies for professional sports teams and will support a bill similar to one that died in committee earlier this year, his spokesman, Fred Piccolo, told Bloomberg BNA Sept. 27. H.B. 13, which has been filed for the 2018 session, would block pro sports stadiums from being built on publicly owned land unless the team buys or leases the property at fair market value.
“It’s definitely a priority this year,” Piccolo said. And he acknowledged that the controversy around protests at NFL games could give the idea a boost with Florida lawmakers—“just the attention it’s drawn to the issue.”
Florida Sen. Tom Lee (R) also brought a bill in the 2017 session that would have repealed the sports development program the state created in 2014 but hasn’t yet funded. The program is designed to grant sales tax distributions of up to $3 million per year per facility for up to 30 years, with a cumulative annual cap of $13 million. Lee’s proposal to repeal the program failed to win committee support and didn’t reach a Senate floor vote.
Florida provides up to $2 million per year in sales tax distributions to each of eight pro sports stadiums under a similar but separate program—the Professional Sports Franchise Program. The NFL’s Miami Dolphins, Jacksonville Jaguars, and Tampa Bay Buccaneers each have received more than $40 million from the state over the past two decades from this program.
Florida Gov. Rick Scott (R) will review any potential legislative or budget action during the upcoming session, Kerri Wyland, a press assistant to Scott, told Bloomberg BNA.
With assistance from Chris Marr in Atlanta
To contact the reporter on this story: Ryan Prete in Washington at firstname.lastname@example.org
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