One of the biggest scams in local government here, exploited to the fullest by our “business friendly” all-Republican Loudoun Board of Supervisors, is the slush fund at the Board’s disposal from revenues collected from the local hotel tax.
By state law, about half of the hotel tax revenues are required to be used for promoting travel and tourism to the county, in particular events or organizations that result in overnight stays.
But under the guise of being “business friendly” and promoting “economic development,” this Board has turned it into just an all-purpose slush fund to reward their cronies and help themselves. The biggest recent scandal was the Board’s decision in 2012 to award $2 million — $500,000 a year — to that very needy organization the Washington Redskins. It was all the more astonishing given that the Redskins had just announced they were pulling their training camp out of Loudoun. But the Board insisted that because the Redskins had very legitimate “football reasons” to move their training camp to Richmond, it was really very unfair to take away the team’s free taxpayer-provided subsidy. And the team even promised sort of to keep their corporate HQ in Loudoun for another year or so.
Yes, just think of the tourist benefits of a business office!
Meanwhile, the Board was wiping out a whole raft of small but important grants to local arts and cultural organizations claiming that they did not represent a “core function of government.”
The Board’s right-wing amen corner took to the blogosphere to defend the Redkins ripoff by claiming (a) that all of the money just came from hotel taxes, thus was not paid by residents and (b) the Redskins were of great value to “branding” the county. (Priceless, I guess, since no one could put a value on that supposed benefit.)
What the Board spectacularly failed to even ask, though were a few basic questions that anyone who claims to be “businesslike” would have occurred to ask from the outset:
1. Does a very successful for-profit business like an NFL football team actually need a subsidy? Will the $2 million from Loudoun County actually induce the Redskins to do anything to the benefit of the county that they did not intend to do anyway out of their own corporate interest?
2. Would that same $500,000 a year, invested in other Loudoun organizations, nonprofits, or tourism related enterprises, have generated a greater return to the county, especially more tourism and visits?
3. As a matter of principle and long-term policy planning, would it not make sense to require that these limited, restricted funds be invested in activities that promise to remain in the county for more than a year or so, and that had not just abandoned their only significant visitor-drawing activity?
What was especially ignorant was the glib claim by defenders of this corporate welfare that since the money came from the tourism tax, it was somehow free and it didn’t matter. You would think that anyone who claims to be “businesslike” just might have heard of the concept of “opportunity cost” and the fungibility of money: Simply, handing over $500,000 — which is a lot of dough — to an NFL football team is $500,000 that is unavailable for anything else, even if it all came from the restricted the hotel tax.
But now it turns out that a large chunk of the money is going to have to come out of general revenues after all, owing to a shortfall in the hotel tax trust fund. Continue reading →