Watson Versus Major Events

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Strange bedfellows: Sen. Dan Patrick, R-Houston, side-by-side with Sen. Kirk Watson, D-Austin, in voting to de-fund the Major Events Trust Fund (Photo by Richard Whittaker)

Are your lions lying down with your lambs yet? Last night Sen. Kirk Watson, the Austin Democrat that got Formula One added to the list of events eligible for the Major Events Trust Fund, joined with Sen. Dan Patrick R-Houston, to speak unsuccessfully against the fund. Why? "It's a matter of priorities," Watson said.

It was all part of the debate around House Bill 4: That's the measure intended to clear the state's current $4 billion debt from the current session (yes, Texas is in debt, and that's in addition to the shortfall for the upcoming biennium: Read how that works here.)

Time for some fiscal time traveling: This debate was not about the upcoming 2012-13 budget, but about reducing the old budget. Patrick had filed a floor amendment to reduce the 2010-11 appropriation to the fund (currently housed with the comptroller's office) by $25 million. Hastily penciled in at the bottom was an additional measure that would sweep the remaining $10 million currently in the trust fund back into general revenue. That $25 million is the vital part locally because that is what would go to Austin's F1 project if and when they put an application in.

Not so fast. Patrick wanted the whole fund, well, defunded. "While I'm a great fan of Austin and a great fan of car racing," Patrick said, he was not willing to put $25 million into F1 when schools are laying off staff because of state cuts. This sum alone would be worth 5,000 teacher salaries, Patrick (who opposes all state subsidies) argued and he said he could not justify spending money on F1 when the state is inflicting classroom cuts.

Enter, to the surprise of many, Watson. He was the man that got F1 added to the list of trust-fund eligible projects back in 2009, and would be expected to be its defender this time around. While still a big F1 booster, which he called "a great economic development opportunity," he said, "I am very troubled with the budget we are passing." His question about the money was simple: If it was not appropriated for the trust fund, "Would that mean there's $25 million less of a hole in Medicaid?"

To date, the argument has always been that the trust fund cash is a zero sum game for the state in terms of cost: They appropriate the money to attract a major event, which then generates far more than that sum in additional tax revenue. In the case of F1, the application being discussed would be for ten years, so effectively the same $25 million floats through every year: At the end of the decade, there would be no appropriation, so the state ends up with the cash. It may seem like an accounting trick, but it's the least sinister one in operation this year.

It fell to Senate Finance Committee Chair Steve Ogden to save the fund. The Bryan Republican argued that, since the $10 million is already with the comptroller, there would be constitutional questions about the state pulling it back: As for the $25 million, he argued that not appropriating it would do nothing to fix the current budget, nor would adding it into the general revenue calculation change whether the comptroller could certify the budget or not.

That did little to convince Watson, who argued that it was $25 million real money, no matter what account it was in. "Basically, it's the way we talk about it, the way the state talks about it, the way it goes into the books," he said.

However, he and Patrick ended up on the losing side of this argument. First, Sen. Chris Harris, R-Arlington, pointed out that Houston has done pretty well out of the fund. It just got $14 million out of the fund for this year's NCAA’s Final Four College Basketball Tournament: This comes after getting done pretty well out of the trust fund in the past (getting $8.7 million in 2004 for Superbowl XXXVIII, as well as extra cash for the 2004 MLB All Star Game, the 2006-7 Champ Car Grand Prixs, the 2008 NCAA Final Four Regionals, and the 2008 Latin Grammys.)

Next up, Ogden made a more direct assault on the meat of the amendment. He told Patrick, "If you're serious about this issue, the thing to do is repeal the statute." He argued that the amendment was not about cash but "a political statement on whether [the fund] is a good idea or not." Cue the vote, and the Patrick amendment was tabled, 18-12.