Congratulations, Texans, we’ve been played the fool by a European billionaire and his well-connected, Texas-based cronies who’ll spend the next decade pocketing $25 million a year of taxpayer subsidies.
Formula 1 owner Bernie Ecclestone and a group of local multi-millionaires managed to convince Texas Sen. Kirk Watson (D-Austin) to expand the state’s Major Events Fund (read: corporate slush fund) to include dollars for Formula 1 racing in Texas.
We were told it was the only way to make Texas a world-class place was to have a tax-subsidized hobby for European millionaires southeast of downtown Austin. That having the only Formula 1 race track in the US would make us special.
Of course, since the other tracks had shut down from a lack of profitability, it also made us appear slightly nutty. But, hey, that’s what the subsidy was for: to make sure well-connected hobbyists, er, investors, didn’t have to spend so much of their own money to pursue their F1 dreams.
(Since implementation, cheerleading the effort has fallen to Texas’ Comptroller Susan Combs. She’s a good friend, and apparently wants to be lieutenant governor, but taking money from taxpayers to hand off to others is radioactive in this political environment. This project should be canned if for no other reason than it reeks of crony capitalism.)
Now comes word from New Jersey that a Formula 1 racetrack is being built there. Texas isn’t so F1 special anymore.
Oh, except for the fact that Texas will now be the only state using taxpayers’ money to subsidize an F1 project. Isn’t that special?
Independent study after independent study has demonstrated what the free-market has always said: subsidizing business is bad policy – and especially for sports facilities. The taxpayers never come out ahead; it’s only when shill economics are hired to produce phony studies that you find imaginary success.
It just doesn’t happen. It’s illusionary. Using tax dollars to subsidize a business is like throwing bricks through windows and think you are helping the economy by employing glass-makers (with apologies to Mr. Bastiat for borrowing his analogy). What you never see is how money taken from the economy would have been more efficiently and wisely spent.
Government bureaucrats are bad investors precisely because they use other people’s money. This latest chapter in Texas’ Formula 1 fiasco is just further evidence of that fact.
Texas taxpayers should demand that our public servants stop robbing our wallets to subsidize other people’s business fantasies and corporate hobbies.