wgs

-------- Original Message --------
Subject: Formula 1
Date: Wed, 8 Jun 2011 13:48:11 -0500
From: Lynda Rife
To:
CC:


Gardner

 

Tovo - Austin City Council “may give $4 million a year to subsidize a race track.”

 

...

 

First- the money isn’t going to the race track -  The $4 million dollars will go to the state’s Major Events Trust Fund which is for events not facilities.  And it does not go to an industry or business; it goes to another government body.  That money can be pulled down by the City to recoup costs that the City incurs in conjunction with the event.

 

Second - The local organizers have committed to provide the initial $4 million.  That means the City won't  write the first check for $4 million.

 

Third - The event is expected to generate more than $4 million dollars in new tax revenue that wouldn't come to the City without the event taking place.  This same process repeats in years 2-10.    If we don’t generate that $4 million dollars in new tax revenue from the event, then the City doesn’t have to pay the whole $4 million.  The City is not on the hook, if the event doesn’t meet the performance standard.  Hence no money given by the government that isn’t brought in by the event itself.  This is an agreement to reinvest a portion of the newly created money. A subsidy is use of existing money to artificially support an activity. This is a performance based process that eliminates any downside but provides upside potential.

 

Fourth – The Tovo campaign has not addressed the fact that new tax revenue could be generated as a result of the event....

 
Lynda