Christine Cox
Details
Who's Running This State?
Our Guide to the Mess in Olympia.
Donkey Kong: The Democrats are in charge — for now. But the many challenges facing Washington are going to test their ability to govern. By George Howland Jr. MORE
The Revote Revolt: The Republicans are executing a perfect PR campaign, and the Democrats have rolled over. By George Howland Jr. MORE
Governors of Yore: Mossback's guide to the characters of the 1960s, '70s, '80s, and '90s. By Knute Berger MORE
Related Content
More About
Needy students, impoverished families, kids without health insurance. Sure, they all need help from Olympia. But get in line with Paul Allen, Howard Schultz, and a lot of other fat wallets.
Their corporate lobbyists have been preparing for the 2005 legislative giveaway by working the phones, e-mail, and power corridors, explaining the virtues of backing a grateful billionaire or just an appreciative half-billionaire, so they could hit the marble halls running this week.
Besides seeking regulatory reform and tax breaks that would benefit their weighty business portfolios of technology, entertainment, retail, and bioscience investments, Schultz and Allen would like taxpayers to give them more money to help their big-time sports franchises. Starbucks/Sonics owner Schultz, for one, is asking the Legislature to extend—if not make permanent—temporary hotel/motel/car-rental taxes that could finance a $180 million remodel of KeyArena, the Sonics' home.
So what if taxpayers remodeled the arena just nine years back for $74 million? Or that then–Sonics owner Barry Ackerley had the cojones to say it was being paid for with "no tax dollars. Not one cent," and said the project would satisfy the team at least until 2010? No taxes were involved, Ackerley reasoned, since the renovation was financed by bonds underwritten by the public (see: "taxpayer loan") and would be fully repaid from arena revenues. But not even that is true: $60 million is still owed, and now new owner Schultz wants the balance paid off directly by a tax.
But have a heart. If Schultz spends his own bling on an arena expansion (not so much for additional seating, mind you, but for new income-producing luxury boxes and concession stands), then how could the guy afford to open three new coffee stores in Istanbul tomorrow?
We're talking Olympia and taxes, after all. Legislators and governors have doled out more than 500 state tax breaks or exemptions over the years, valued at $64.7 billion per biennium budget. What's a few more perks to soothe a jittery coffee mogul? And despite rumors of a budget crunch, Olympia has the cash to throw around, says conservative tax watchdog Bob Williams. By his calculations, "Washington will have $1.5 billion more to spend for the next budget," says Williams, president of the Evergreen Freedom Foundation. "We do not have a revenue shortfall. What the state has is a shortfall of self-discipline, common sense, and accountability."
Extending those temp tourist taxes, currently set to expire in 2020 after paying off Paul Allen's football stadium, could also further benefit the Seahawks owner by paying for future renovations at Qwest Field. The proposal is just starting to get kicked around the hallowed Olympian halls this week, and even the Mariners' shiny taxpayer gift, Safeco Field, built in 1999 for $517 million, might get more financial aid if such a package were approved.
Of course, enriching the rich is nothing new in Olympia, although it could get a little sticky for Allen in particular: While legislators weigh the possibility of giving him more money, he is asking them to rewrite his existing multimillion-dollar Seattle stadium contract with the state's taxpayers. The world's richest sports mogul believes he doesn't have to disclose the finances of his Seattle Seahawks football team, as required by the 1997 stadium deal. He maintains, according to a recent memo by Allen lobbyist Robin Appleford to House Speaker Frank Chopp and other legislators, the only "benefit" of revealing Seahawks finances "would be simply to satisfy idle curiosity." That's true, if the public is only idly curious about where its money is going. Tacoma News Tribune columnist Peter Callahan, a persistent Allen critic, notes that taxpayers—having paid for most of Allen's $461 million Pioneer Square playpen and exhibition center (not counting another $500 million in interest and related improvements)—"deserve to know how much that stadium is making Allen. We deserve to know how our investment is paying off. We deserve to know if ticket increases are justified based on the profits our stadium is producing for Allen."
The state attorney general's office says the contract obligates disclosure by Allen, and state Auditor Brian Sonntag agrees. Officials think Allen set up a shadow company called First & Goal merely to report irrelevant figures and avoid revealing how his real moneymaker, the Seahawks, spend income and other earnings from Qwest Field. Allen dismisses those claims and has challenged the state to come after him: The one with the most lawyers wins. As a pre-emptive defense, Allen is now casting about for a new law to let him off the hook. "Disclosure of proprietary business by the Seahawks," Allen argues, according to a background memo from lobbyist Appleford, "would be inappropriate."
(Mario Tama / getty images)
Starbucks Chairman Howard Schultz (center) wants bennies for the Sonics and says: charge it to the taxpayers. |
|
Obviously, Allen's and Schultz's companies are among many businesses or industry associations whose hired arm- twisters have begun the months-long quest for Olympia "relief." High on everyone's to-do list are tax incentives, as they're known. The standard pitch is economic: Help our bottom line, and we'll be able to make more money to hire more people who will buy more products—even if they're imported TVs and CD players. We won't use tax breaks just to fatten our corporate take-home, honest!
