Arena financing proposal amended, advanced

Senators debated a general file carry-over bill Jan. 11 that would change the way turnback taxes are distributed to cities that build qualifying sports arena facilities.

Sen. Merv Riepe of Ralston introduced LB285 last session and made it his priority bill. Originally, the bill would have extended the period during which new state sales taxes from nearby retailers are turned back to political subdivisions to pay for sports arena facilities.

Under current state law, 70 percent of state sales taxes generated by new and existing retailers near an arena are turned back to the city to help pay for the new facility. Thirty percent is directed to the Civic and Community Center Financing Fund (CCCFF), which provides development grants to smaller communities across the state.

Under an amendment proposed by the Revenue Committee last session, any funds in excess of $1 million at the end of the year would be distributed proportionally to the cities that generated the turnback revenue to help pay for convention centers and sports arenas.

Senators voted 35-2 to adopt the amendment.

Sen. Paul Schumacher of Columbus called the proposal a “bailout” for Ralston, which he said was too optimistic when planning and financing its new arena. He said that the bill would set a precedent of the Legislature bailing out a city when it makes poor financial decisions.

“It’s going to encourage the notion of risk being taken on by communities that may not do their due diligence,” he said.

Riepe said the CCCFF distributed about $2 million for projects in 2015 but that Ralston likely would see no additional revenue in the near future if the measure passed.

“[The amended bill] is not a bailout,” he said. “It is an incentive for the Department of Economic Development to grant out funds. There are a number of cities around the state who have benefited from this legislation.”

Schumacher introduced an amendment that also would make some county agricultural societies and county fair boards eligible to receive CCCFF funds. The amendment failed on a 10-27 vote.

The bill advanced to select file on a 34-3 vote.