Looks like taxpayers in Texas are left with the bill again- this time for Formula One racing. $25 million of taxpayer funds will be deposited in the state's Major Event Trust Fund to pay for the privilege of hosting the first of ten annual Formula One races planned for Austin beginning in 2012.
Beginning in September 2009, $25,000,000 was appropriated from General Revenue for the biennium for the purpose of attracting and securing eligible events (however there is no mention of the race in the bill). Just last week, Bernie Ecclestone, president and CEO of Formula One Group, announced that Austin would host the F1 races from 2012 through 2021. Typically, local organizers must come up with a sanctioning fee which is between $25 million and $50 million each year to pay Formula One.
Previously the fund has generated the money from primarily from raising sales taxes. While the money is allocated to local governments to reimburse them for costs incurred in hosting the events, the funds will likely cover promotional activities and other expenses as well.
While state officials are stressing that the money is an investment that will stimulate the state's economy, should taxpayers really be forced to pay for the three-day event? Rather than forcing taxpayers to pay up, shouldn't F1 enthusiasts be the one left with the bill? Remember that individuals constitute the strength of the American economic system because they are free to respond to demands of the marketplace. They are the most productive and efficient sources of goods and services. As such, it is in the taxpayers' best interest that the government step back and rely on the private sector to stimulate Texas' economy.