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Stadium tax heist?

 

Editorial
Copyright 2000  The Detroit News Inc.
Reprinted with permission
Article date: May 3, 2000
 

Wayne County voters on Nov. 5, 1996, approved Proposal S, a tax on car rentals and hotel rooms. The levy was to assist in land acquisition and preparation for a new Tiger Stadium. County officials now proposes to transfer excess revenue generated from the levy to development projects near Metro Airport, including a golf course.

Most voters likely had no idea they were giving county officials broad authority to use tax revenues for this purpose. The ballot language certainly gave voters no clue they would be funding golf courses. County officials should seek voter approval for additional uses for the revenue -- or return the excess funds to the taxpayers.

Proposal S asked voters to approve a sales tax of 1 percent of gross receipts from hotel room charges and 2 percent of gross receipts from auto rentals "primarily to secure and fund rentals by the county to the Detroit/Wayne County Stadium Authority ... to acquire a new professional baseball stadium ... to be developed near the site of a planned new football stadium for the Detroit Lions...." No mention is made of other uses for the tax receipts, except for the slippery word "primarily."

Since then, County Executive Ed McNamara committed to the Pinnacle Aeropark Project. This development would create an industrial park and recreation complex near Metro Airport. The county commission authorized $30 million in seed money for the project, including a loan from the stadium account. In 1999, revenues generated from the tax totaled more than $7.1 million. Currently, the yield is about $2 million more a year than is necessary to meet stadium project obligations.

Boilerplate language in enabling state legislation gives the county broad authority to use surplus tax revenue. The Stadia and Convention Facilities Financing Act of 1991 provides that excess tax revenues collected may be used to pay "costs associated with the clearance and improvement of land for assembly and development purposes." This wording, however, appeared nowhere on the actual ballot proposal.

There's nothing illegal about this transaction. Caution, though, should be in order before voters approve another county tax. The county's record on administering earmarked taxes is not particularly good. Although voters approved a one-tenth of a mill tax levy in 1988 for the construction of a county juvenile detention facility, more than one audit revealed that the funds were diverted to other purposes.

Voters may have no objection to using stadium tax revenues to help finance other economic development projects. But nobody has asked them.

The point of requiring government to ask voters to approve a new tax for a specified purpose is to give them a chance to make an informed decision about the use of their tax dollars. This maneuver short-circuits that process. If the Stadium Authority has more tax revenue than it needs, the county should ask the voters to shift the tax to another use -- or give it back.

Our view

Wayne County should seek voter approval to shift unneeded tax revenue for the new baseball stadium to other development projects, or rebate it to the taxpayers.

Opposing view

State law gives Wayne County the authority to use the stadium tax revenue for other purposes.

Approved by Mark Silverman, Publisher and Editor
Reprinted with permission from the Detroit News
 

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