Yard Goats Ticket Tax Plan Comes Under Fire [Courant]

April 20, 2015

Article as it appeared in the Hartford Courant

Back in September, when the city of Hartford showed us how it would pay $4 million a year for the Downtown North baseball stadium without increasing the tax rate, the money included a ticket tax raising an estimated $426,000 a year.

The team would charge the 10 percent tax under state law, but the money would come back to the city to help pay for the ballpark.

It didn’t seem controversial at the time. Fans would pay an extra buck or so for a seat. The Rock Cats, who will change their name to the Yard Goats when they move from New Britain, had no problem with the levy.

Taxpayers not attending games would remain untaxed.

But on Friday, just in time for a public hearing on the tax Monday, the top Republican in the Senate called “foul ball.”

Why, asked Sen. Len Fasano, R-North Haven, should the state hand the money from that admission tax back to Hartford?

On one level, the answer is obvious: Patrons of the Yard Goats will help pay for the $56 million ballpark as their tax payments go to the city to help pay back bonds.

Trouble is, the owners of almost all amusement, entertainment and recreation venues, including the Rock Cats in New Britain, must charge a 10 percent ticket tax. And that money goes into the state’s general fund — $10.3 million from admissions and $23.5 million more from dues in fiscal 2014.

Fasano, himself, owns a beach club on the shore that collects the 10 percent tax on dues.

Under the bill lawmakers will consider Monday, led by Sen. John Fonfara, D-Hartford, the state would set up a special fund to return the Hartford Yard Goats tax to the city of Hartford. It would also add the Bridgeport Bluefish to the small list of entertainment purveyors exempt from the tax.

The Hartford fund is a back-door way of funneling state money to the ballpark, Fasano argues — exactly what Gov. Dannel P. Malloy said he wouldn’t do.

“It’s a bad thing for us to do when we’re not part of the process to determine the legitimacy of the project,” Fasano said.

If legislators, in their wisdom, want to help pay for the stadium, and vote for doing so, that’s one thing, Fasano argues. But they’d be doing it in a year when the sick, the poor and just about everyone else not named United Technologies is taking a hit.

In this case, it’s a brand new ballpark, and that ought to count for something.

Fasano on Friday issued election-year quotes from Malloy saying the state was not part of the Hartford stadium plan. He even linked to a Connecticut Network (CT-N) video in which the governor said, “We have no intention of participating in this program.”

He’s calling on Malloy to, in his words, keep his promise — a promise Malloy may or may not have made, depending on what those words mean.

So now we’re in a dither of two sorts. First, is the tax scheme really a form of state support for the stadium? It’s not like the state would send cash from state taxpayers to the capital city.

“It’s money that’s being generated in the city, by the city, and we’re saying keep it in the city,” said Maribel LaLuz, spokeswoman for Mayor Pedro Segarra. “This is not money that’s allocated from the general fund for helping single mothers or homeless shelters.”
Malloy, for his part, is keeping his distance from the flap. “He’s not behind it nor has he proposed it,” spokesman Mark Bergman said of the Yard Goats fund.

Fonfara, co-chairman of the tax-writing finance committee in the General Assembly, said he doesn’t think the plan amounts to state support for the stadium. But — and here’s the second part of the dither — he doesn’t care whether it does or not.

“I’m not afraid to say to you here that I think the state should be involved in supporting this initiative,” Fonfara said. “Homeless shelters, halfway houses, low-income housing, high unemployment, drug issues, high crime … these neighborhoods have shouldered the burdens, and the residents that have stayed in those areas and the businesses that have stayed in those areas pay the highest property taxes in the state.”

Now they deserve a few dollars from the state for the stadium, he said. And he’s right.

Back in June, I said in a column that the state, not the city, would realize the economic gains from the stadium. Hartford is like an adolescent child, I said at the time — claiming to be spending her own money but in truth, fully dependent on the state to step in.

Now that time is near. It’s a close call whether funneling the admissions tax back to Hartford amounts to a subsidy. Let’s call it a favor. But it ought to happen because Hartford is doing a lot of favors for the state, including building this stadium.

And while we’re at it, maybe we should rethink that statewide admissions tax as a way of raising money for the general fund. At the least, this year’s bill should send the tax from Rock Cats’ games back to the city of New Britain.

Here’s an even better idea: Forget the special Hartford fund and rewrite the bill. Any entertainment business that opens a whole new facility would be entitled to its take of the state admissions tax, up to 1 percent of the construction value per year. That’s called economic development.