Friday, July 20, 2001
States consider assuring Games
Sales tax funds would cover any loss if Olympics land here
By Dan Klepal
The Cincinnati Enquirer
State senators from Ohio and Kentucky will introduce legislation next week that would guarantee tax dollars to cover debt left behind by the 2012 Olympics should they be in Cincinnati.
Such guarantees would help local Olympic organizers fulfill a crucial requirement for the bid.
Ohio Sen. Lou Blessing, R-Colerain Township, and Kentucky Sen. James Callahan, D-Wilder, will each introduce a plan that would skim new sales tax revenue resulting from the Games and place it in a trust fund.
It is estimated the fund would eventually grow to about $200 million, with 85 percent of that coming from Ohio.
The money would be used only if the Olympics left behind a deficit something that hasn't happened during the last three Olympics held on U.S. soil.
It's a once-in-a-lifetime opportunity, Mr. Blessing said, adding that he thinks there will be ample support for the idea. And there's no commitment unless the Games are actually awarded to Cincinnati. I don't see where there's any potential loss here.
Nick Vehr, president of Cincinnati 2012 Inc., said only sales tax revenue linked directly to Olympic spending would be collected. He said such revenue starts rolling in about six years before the Games are held.
Of course, we believe there will be no public money needed as a financial backstop, said Mr. Vehr. His organization's budget projects a surplus of $145 million.
This is not a new tax, he said. It's new sales tax revenue collected within the existing tax structure.
The proposed legislation states that if the sales tax is not used, it would go back into state coffers. The authority to collect the tax for the trust fund ends after the Games.
In addition to the state guarantee, Cincinnati 2012 would take out a $200 million insurance policy to guard against a deficit, if it is awarded the Olympiad. Mr. Vehr said it is too soon to know how much that would cost.
It will be expensive, certainly more expensive than standard insurance policies, he said.
Cincinnati is one of eight cities hoping to be selected by the U.S. Olympic Committee to compete internationally for the 2012 Games.
Tampa, Fla., and Washington, D.C., have both said they would buy private insurance to guard against any deficit.
Houston and Dallas have access to government funds made available after the Texas legislature passed a law creating a similar fund in 1999. That money is also available to San Antonio officials putting on the Pan-American Games.
Ohio Rep. Tom Brinkman, R-Mount Lookout, thinks the idea is terrible. Mr. Brinkman said he was appalled when Ohio and Kentucky governors combined to give $700,000 to Cincinnati's Olympic effort.
I will stand up and fight any effort to give taxpayer money to fund these Games, Mr. Brinkman said. They're looking for enormous amounts of tax dollars that we will end up paying through the nose for a long time.
The U.S. Olympic Committee will send nine officials to visit Cincinnati next week. They will select the U.S. candidate city next year.
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