Sports Stadium and Arena Funding, User Pays (and I don't mean the fans)

One year ago there was a King5/SurveyUSA poll that asked, "If an arena could be built for a new NBA team without using any taxpayer dollars, would you support? or oppose? building an arena?".

This past week two lawmakers, Mark Hope (R-Lake Stevens) and David Frockt (D-Seattle), have proposed revisiting a "Jock Tax" this summer, after the legislative session ends.

Lets's look at the survey, then see if the Jock Tax fits in the survey results.

Do you want a professional NBA basketball team in Seattle? Do you want Seattle to NOT have a professional basketball team? Or do you not care one way or the other?

Want team 41 percent

No team 18 percent

Don’t care 42 percent
Pie Chart here

If an arena could be built for a new NBA team without using any taxpayer dollars, would you support? or oppose? building an arena?

Support 72 percent

Oppose 20 percent

Not sure 18 percent
pie chart here

If an NBA team did come to Seattle, how likely would you be to go to a game? Very likely? Somewhat likely? Not very likely? Or not at all likely?

Very likely 19

Somewhat likely 22

Not very likely 26

Not at all likely 31

Not sure 1
pie chart here

How likely would you be to go to a game if an NBA team played in the Bellevue area instead of in Seattle?

Very likely 13 percent

Somewhat likely 16 percent

Not very likely 28 percent

Not at all likely 42 percent

Not sure 1 percent
pie chart here

This poll was reported on in a Publicola story last year.

Here are some assumptions and a few questions worth asking.
Assumptions:
There is a group of people that hate sports, all sports questions are answered "NO" (see question 2).
There is a group of people that love sports, all questions are answered "YES".

A supermajority support a free arena (again, question 2). The other questions in the survey center on NBA teams, and see that those answers are less than a supermajority. That may be because not everybody is an NBA fan, I'll call them hockey fans, or free facility fans.

Watching the perpetual struggle of 4Culture, and sports fans, struggle to get control of Tourism Taxes to fund Tourism related infrastructure is frustrating. The majority of Washington State Legislature is less than interested in helping. It will take a major effort for 4Culture to get an existing tax that is not part of the general fund partially dedicated to arts.

Imagine trying to raise a new tax for sports facilities... Looks impossible.
Imagine limiting that tax to tourists (people not living in Washington)... Next to impossible.
Imagine limiting the tax to just millionaires that directly benefit from the existence of the facility... I think we are heading into the "free arena" zone.

I think you could retain the tax advantage of athletes that live here by exempting them from this B&O tax because they pay residency taxes, sales taxes, gas taxes, real estate and property taxes.
I think you could retain the taxes from those that would buy a cheap condo here, but do not qualify for state residency.

I think this is the path of least resistance, in fact, I think there would be a small portion of sports haters that could support the taxing of athletes just because they dislike them that much.

It's worth pursuing.
I think the B&O tax on athletes should be based on a multiple of Poverty.

Numbers change with location and the economy, but lets pick a number for conversation sake. In 2007, a couple with an infant living in Bellevue would need to make (roughly) $31,000 a year to be self sustaining.
What if an out-of-state athlete was charged a B&O tax if they made $620,000 or more a year? Too low?
How about $960,000 a year?
The WNBA TEAM salary cap in 2010 was $775,000. The entire Storm team wouldn't make enough to qualify for that tax. The Seattle Sounders have had one player that could qualify, barely.
The "average" salary in the NBA this season is $5.765 million

Whenever is see arena funding debates revolving around ticket taxes, parking taxes, fan taxes, I like to come back to the NBA average salary and ask, why not them?

I am not seeing a private arena being built, that looks just as impossible. Residents are not paying for this.
Figure it out.

I see no good reason to not have Kobe Bryant pay for the building of a new Sonics arena.

Washington State Representative Mark Hope (R-Lake Stevens) and David Frockt (D-Seattle) are hoping to form a Task Force this summer to develop a plan for funding sports arenas and stadiums.

“I think it’s an economic issue,” said Rep. Mike Hope, R- Lake Stevens. He believes the state should be involved in building an arena to lure a franchise back. He also believes it can be done without using Washington taxpayer money.
 
That’s why he and State Rep. David Frockt, D-Seattle plan to lead a task force this summer to come up with a solution.
“It’s time to revisit the issue,” said Frockt, who also acknowledges there is “no appetite for a public subsidy." Frockt believes the state needs to look at all the financing options on the table.
Hope suggests the state pursue a “Jock Tax” on visiting athletes to partially pay for a new NBA-ready building. It’s a type of tax already in place in several states.
“Right now, you have the Seattle Mariners, Seattle Seahawks going to California to play games, going to Cleveland, Ohio to play games and Cleveland is getting money from our players,” said Hope.
Chris Daniels, Could 'Jock Tax' help bring Sonics back?, KING5 News

This really isn't a new idea, the last time this idea appeared was last year when it was included in a dozen amendments Washington State Senator Rodney Tom sandbagged House Bill HB 2912 with (David Frocht, I sent a link to this amendment to you a few days ago).

2912-S.E2 AMS TOM CARL 101

2ESHB 2912 - S AMD TO  S AMD (S-5336.1) 316
By Senator Tom
    On page 13, after line 28, insert the following:
   
"NEW SECTION. Sec. 1.  A new section is added to chapter 82.04 RCW to read as follows:
    (1) A rate of tax under this chapter equal to ten percent is imposed on the gross income of a professional athlete derived from Washington sources.
    (2) "Professional athlete" means:
    (a) a resident or nonresident athlete who renders labor or services to a professional athletic team that plays ina sports facility financed with ten percent or more public funds; and
    (b) A resident or nonresident athlete who has a gross annual income that is ten times the first-year base salary of a public school teacher in Washington state."
    Renumber the sections consecutively and correct any internal references accordingly.
2ESHB 2912 - S AMD TO  S AMD (S-5336.1) 316
By Senator Tom
    In the title after "36.100.020;" insert "and adding a new section;"
      
           EFFECT: Applies a 10% B&O tax on professional athletes.
HB 2912, Amendment 316

10% looks a little high, and it is until you consider that Seahawks, Sounders, and Mariners pay California State Income Tax on the wages earned during that game, when they play there. Most of those athletes are in the 11% tax bracket. Still, the point isn't to tax professional athletes just for the fun of it, it's purpose is to fund sports facilities.

A story written in the LA Times back in 2009 does an excellent job of describing the situation, application, and examples.

If opening day is the best day of the year for professional athletes, then April 15 -- tax day -- is probably the worst. Especially now that 20 of the 24 states with franchises in at least one of the four major pro leagues -- the NFL, NBA, NHL and Major League Baseball -- have laws that require visiting athletes to pay state income tax for each game they play there.

Considering that top-level athletes in football, basketball, hockey and baseball now make an annual average salary of $2.9 million, that means big bucks for states such as California. Home to 15 major professional teams, the state raked in $102 million in taxes from visiting athletes in 2006-07, the last year for which records are available.
. . .
Athletes are taxed based on "duty days" they spend in each state. In baseball, there are approximately 181 "duty days," meaning a player earning $1.81 million would make $10,000 each duty day. Therefore, if that player's team had three games in California, he would be responsible for taxes on $30,000 of income.
. . .
At that point, all the tax collectors have left is a math problem to figure out that Ichiro Suzuki, the highest-paid baseball player in Washington, a tax-free state, will have to pay more than $218,000 in California taxes for the 25 games the Mariners will play there this summer.[2009]
. . .
The advent of the jock tax is commonly traced to the 1991 NBA Finals in which the Chicago Bulls beat the Lakers, then received tax bills from California for the three games played in Los Angeles. However, nonresident tax laws have been on the books in the state since the 1950s. . . .
When the Seahawks played the Steelers in the title game three years ago in Detroit, Seattle quarterback Matt Hasselbeck reportedly had to pay about $10,000 in taxes to Michigan, a state with which he has no ties. If that game had been played in Florida, as two of the last three Super Bowls were, he could have kept the money.

The taxing life of a pro athlete: It's one of life's certainties: Athletes have to pay for income earned on the road., Kevin Baxter, LA Times (2009)

Please, read the entire story.

Understand this, our professional athletes are paying taxes in other states. As I write this, the Seattle Mariners are just about to start playing a game against the San Diego Padres, in California, and pay income tax. When the A's, Padres, Angels play in Seattle they do not pay an income tax, B&O tax.

I see no good reason to not have Kobe Bryant pay for the building of a new Sonics arena.

The only question I have is how much?