Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, July 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Kansas lawmakers have passed tax cuts to clear the way for a plan to lure the Chiefs

Economists who’ve studied pro sports teams have concluded in dozens of studies over decades that subsidizing their stadiums isn’t worth the cost.

TOPEKA, Kan. (AP) — Kansas legislators cleared the way Tuesday for a debate on trying to lure the Kansas City Chiefs from Missouri by approving broad tax cuts that many lawmakers said they needed to see before considering a plan to help the Super Bowl champions finance a new stadium.

The Legislature took up the stadium proposal during a special session that convened Tuesday amid heavy lobbying for the plan. The measure would allow the state to issue bonds to help the Chiefs and Major League Baseball's Kansas City Royals finance new stadiums on the Kansas side of their metropolitan area, which is split by the border with Missouri.

But top Republicans in the GOP-controlled Legislature promised that the stadium proposal wouldn't be debated until the Legislature approved a plan that would cut income and property taxes by a total of $1.23 billion over the next three years. Many lawmakers argued that voters would be angry if the state helped finance new stadiums without cutting taxes.

“We definitely need to demonstrate that we’re getting relief to our citizens,” said Senate President Ty Masterson, a Wichita-area Republican who backed the stadium-financing plan.

Courthouse News’ podcast Sidebar tackles the stories you need to know from the legal world. Join our hosts as they take you in and out of courtrooms in the U.S. and beyond.

Democratic Gov. Laura Kelly called the special session to have lawmakers consider reducing taxes after she vetoed three tax-cutting plans before legislators adjourned their regular annual session May 1. The plan lawmakers approved was a compromise between her and Republican leaders.

Legislators made no changes in the plan before passing it, 34-4 in the Senate and 121-2 in the House. Kelly pledged to sign the measure into law.

Once legislators convened the special session, Kelly couldn't control what they considered, and that created an opening to consider the stadium-financing plan. That measure would use revenues from sports betting, the state lottery and new taxes raised from the area around each new stadium to pay off the state's bonds over 30 years.

The first version of the stadium-financing plan emerged in late April, but lawmakers didn't vote on it before adjourning. It would have allowed state bonds to finance all stadium construction costs, but the version to be considered by lawmakers Tuesday would cap the amount at 70% and require legislative leaders and the governor to sign off on any bonding plan.

House Commerce Committee Chair Sean Tarwater, a Kansas City-area Republican, said the Chiefs are likely to spend between $500 million and $700 million in private funds on a new stadium.

“There are no blank checks,” Tarwater told GOP colleagues during a briefing on the plan before the House began debating it.

A new nonprofit group, Scoop and Score, formed last month to push for bringing the Chiefs to Kansas, and that group and the Royals together hired more than 30 lobbyists for the special session. But the national free-market, small-government group Americans for Prosperity and the Kansas Policy Institute, a free-market think tank, oppose the measure, and both have been influential with conservative Republicans.

Free-market conservatives have long opposed state and local subsidies for specific businesses or projects. And economists who’ve studied pro sports teams have concluded in dozens of studies over decades that subsidizing their stadiums isn’t worth the cost.

“Most of the money that gets spent on the Chiefs is money that would otherwise be spent on other entertainment projects,” said Andrew Zimbalist, an economics professor at Smith College in central Massachusetts who has written multiple books about sports.

Kansas legislators consider the Chiefs and Royals in play because in April, voters on the Missouri side of the metro area refused to continue a local sales tax for the upkeep of the complex with their side-by-side stadiums. Missouri officials have said they'll do whatever it takes to keep the teams but haven't outlined any proposals.

The two teams' lease on their stadium complex runs through January 2031, but Korb Maxwell, an attorney for the Chiefs who lives on the Kansas side, said renovations on the team's Arrowhead Stadium should be planned seven or eight years in advance.

“There is an urgency to this,” added David Frantz, the Royals’ general counsel.

Supporters of the stadium plan argued that economists' past research doesn't apply to the Chiefs and Royals. They said the bonds will be paid off with tax revenues that aren't being generated now and would never be without the stadiums or the development around them. Masterson said it's wrong to call the bonds a subsidy.

And Maxwell said: “For a town to be major league, they need major league teams.”

But economists who've studied pro sports said similar arguments have been a staple of past debates over paying for new stadiums. Development around a new stadium lessens development elsewhere, where the tax dollars generated would go to fund services or schools, they said.

“It could still help Kansas and maybe hurt Missouri by the same amount,” Zimbalist said. "It’s a zero-sum game.”

__

By JOHN HANNA Associated Press

Categories / Government, Regional, Sports

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...