Why are Kansas Republicans ignoring their own advice trying to lure Chiefs, Royals? | Opinion

Kansas’ motto is “to the stars through difficulties.” With the recent effort to steer the coming legislative special session, one could be forgiven for thinking it was “to STAR bonds through difficulty.”

Senate President Ty Masterson and House Speaker Dan Hawkins — both Republicans — are considering using Sales Tax and Revenue or STAR bonds to lure the Kansas City Chiefs and Royals to Kansas by building each a stadium. We don’t yet know what the exact approach is, but we know enough to point out significant risks and seemingly tiny rewards, if any.

Just the effort is noteworthy, especially since these men, as Republicans, presumably champion small government and free markets. Yet their effort seeks to use government power to intervene in the market.

The party’s 2022 platform states, “State tax policy must be simple and fair to Kansas businesses.” Using government power to benefit one business at the expense of others hardly seems fair. STAR bonds redirect sales taxes generated at a site to the bondholders until the debt is paid, but a large professional sports stadium would generate financial burdens on infrastructure and public safety — costs borne by others.

The same party platform includes, “The Legislature should periodically re-examine all sales and income tax exemptions, credits, and deductions to determine whether the goal of the exemption is being achieved.” The Legislature did exactly this in 2021 and found only three of the 16 STAR bond projects examined met the state commerce department’s tourism goals.

It doesn’t seem fiscally conservative or even judicious to call for such assessments and then ignore the results.

Taxpayers might not be on the hook if the project fails, but we know state and municipal credit rating could be at risk.

Michael Austin, the legislative director for Americans for Prosperity-Kansas, which has announced its opposition to this effort, points out that STAR bonds aren’t as effective as proponents argue. One of the three STAR bonds that met the tourism goals, Heartland Motorsports Park racetrack in Topeka, “is permanently closed and up for auction.” He adds that other states with similar bond programs haven’t used them in this way.

“Nevada didn’t use STAR bonds for the Raiders’ Allegiant Stadium, and Illinois skipped them for Soldier Field and their current talks for a new stadium.”

There is also the matter of the 2019 border war truce signed by Kansas Gov. Laura Kelly, which aimed to stop Missouri and Kansas poaching businesses from each other. Masterson, however, feels no such constraint, saying he wants Kansas to win at everything, regardless of any prior agreements. Be wary, Kansas: That war was expensive for both sides.

To finance a $2-3 billion Chiefs stadium with STAR bonds, Kansas Republicans would need to overlook their party platform and the unanimity of economists who study such deals. The Journal of Economic Surveys concluded in 2022: “Nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.”

Austin argues that the Legislature should stick to the initial plan for the special legislative session. He says leadership should focus on providing “broad-based and substantial tax relief to all families and all businesses.” And he points out, “The fact we’re even discussing corporate welfare is an implicit admission Kansas is getting too expensive to raise a family or run a business.”

I don’t understand why Kansans — who have nothing to gain by taking on these significant financial and political burdens — want to encourage even more corporate welfare in their state. What’s more, these teams have shown that the fight to get them is eclipsed only by the fight to keep them.

Patrick Tuohey is co-founder of Better Cities Project, a 501(c)(3) nonprofit focused on municipal policy solutions, and a senior fellow at the Show-Me Institute, a 501(c)(3) nonprofit dedicated to Missouri state policy work.