Local officials who want a NASCAR racetrack in Marysville are trying to persuade state legislators that the $250 million project could be financed without dipping into the state’s general fund.
Given that the track developer, International Speedway Corp., has initially offered to cover $50 million of that amount, the track could be a hard sell.
The idea backed by Snohomish County Executive Aaron Reardon and other track boosters is to estimate how much new sales tax revenue the track might generate. That money would be spent paying back taxpayer-financed construction bonds over 20 or 25 years.
That way, it’s more similar to a user fee, racetrack proponents argue.
The best estimates to date show that track-related state sales taxes might bring in $2.2 million a year. In 25 years, that would amount to $55 million – far short of the estimated $200 million the public would need to cover. And that doesn’t include another $50 million in road improvements near the track, including a new interchange on I-5, that taxpayers also would have to fund.
The sales tax estimates are included in a report commissioned in May by the Checkered Flag Task Force, a pro-track group of various economic development councils in the region.
The report’s authors at Berk and Associates in Seattle caution against reading too much into the numbers at this point.
For example, said Berk’s Michael Hodgins, legislators could opt to include other business or lodging taxes. But they couldn’t include property taxes without changing the state constitution.
Leaving property taxes out but including all the other state taxes could double or even triple the ability to pay back the bond, according to the Berk report.
But that still could leave the contribution from race fans’ spending at $168 million at best.
Hodgins said an update of the study is in the works because it was done before a specific site was chosen. The numbers might look different now.
The concept could still work, said Timothy Sullivan, an economics instructor at Southern Illinois University at Edwardsville who has studied other NASCAR tracks. He said lawmakers here should only include sales tax revenues that come from outside the state when creating a bond-payment plan.
Money spent by in-state residents cannot really be considered new money to the state, he said. Most would be spent in Washington anyway, he added.
“When they include the inside money, it’s more likely the bond will be paid off, but more likely it’ll be taken from general sales tax money,” Sullivan said.
The out-of-state money could still be enough, especially if NASCAR’s big moneymaker, the Nextel Cup, comes to Marysville and stays every year, he said.
Sullivan pointed out one risk: What if the racetrack needs to be expanded or replaced before the bond is paid off? He cited the Seattle Kingdome as an example.
“We sports fans have seen the life span of these stadiums shrink in the last 20 years,” Sullivan said.
Reporter Scott Morris: 425-339-3292 or smorris@ heraldnet.com.
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