Thursday, June 23, 2011
Opponents of F1 race sue official
AUSTIN, Texas -- Opponents of taxpayer funding for a new Formula One race in Austin are suing Texas comptroller Susan Combs to try to prevent a $25 million state subsidy for the event.
The lawsuit filed Wednesday in state District Court in Travis County alleges that Combs promised race promoters the money before she was legally authorized to do so.
Combs spokesman Allen Spelce defended the agency's role, telling the Austin American-Statesman that regulations were followed and saying the race would create jobs and spur economic development.
The three plaintiffs are represented by Bill Aleshire, a former Travis County tax collector who has opposed using public money on the project.
The funding comes from an economic incentive program the comptroller's office uses to attract major sporting events to Texas, including the Super Bowl. The program gives tax money to private sponsors of qualifying events based on sales tax revenue that the events are calculated to generate in fan spending. In that way, supporters say the program costs taxpayers nothing.
According to the lawsuit, Combs twice sent letters to a local F1 promoter saying the state was committed to paying $25 million per year over 10 years to hold the race in Texas. Soon after the second letter last year, F1 announced Austin as the site for the U.S. Grand Prix in 2012.
Despite the written assurances from Combs, race organizers have not formally applied to the comptroller's office to qualify for the trust fund incentive, the newspaper reported.
The lawsuit cites a provision in the law governing the fund that says the state can't make a payment until the event is less than a year away. The governing body for F1 has announced the race will be held on June 17, 2012, but F1 officials also have said the date won't be finalized until September.
Consequently, "without a final race date, the comptroller cannot" legally cut a check for the F1 race, Aleshire said.
The lawsuit claims there wasn't a competitive bidding process for the race and takes issue with estimates from the comptroller's office that the Austin area would see a $287 million increase in economic activity because of the race.
Race officials didn't immediately respond to an email request from The Associated Press seeking comment.