I don’t know if state Comptroller Susan Combs was fascinated with fast cars or fascinated with fasttalking rich guys seeking a big taxpayer handout to get richer. But not too long ago, she seemed more than eager to commit $25 million a year for the next 10 years in tax funds to subsidize a Formula One racing venture scheduled for Austin.
You may recall the “welfare for the wealthy” deal attracted national media attention last spring when the Legislature was slashing funding for education and health care. It was pointed out then that adding the $25 million to the state budget instead would have paid the salaries of about 500 teachers at a time when several thousand teachers were getting laid off.
The racing promoters, of course, were promising a lot of pie in the sky, a huge economic windfall for Austin and for Texas when racing fans arrived from everywhere to shower the capital city with heavy consumer spending. Construction started on a racetrack outside Austin, and the countdown began to the big racing day, initially scheduled for next summer. The theory was that the annual $25 million gift from the state’s Major Events Trust Fund would more than be repaid by all the economic activity the race would generate. The biggest beneficiaries, though, would be the wealthy racing investors.
Following a recent spate of problems, racing promoters slammed on the brakes this week, and Combs was frantically trying to find reverse. As reported in the Austin AmericanStatesman article linked below, key investors announced they were immediately suspending construction of the racetrack – apparently throwing 300 construction workers out of jobs – and Combs issued a long, written statement trying to distance herself from the project.
She said no state money had yet been paid to the investors and said no payment would be made until after the initial, delayed race – now scheduled for next November – is held. According to the AmericanStatesman, the initial payment of $25 million had been anticipated before the race.
Among other problems, the local investors have not yet obtained the necessary Formula One racing rights from the promoter. And, according to a report last week by the Bloomberg news service, Formula One’s CEO has been embroiled in bribery allegations in a legal proceeding in Europe.
Wealthy San Antonio businessman Red McCombs, one of the big local investors in the racing venture, also has been an investor in Combs political future. In several contributions in recent years, he had given $13,500 to Combs’ political operation, a rather modest amount from someone of McCombs’ wealth. This past June, however, he became more generous. He gave Combs a $25,000 donation.
Meanwhile, more teacher layoffs are likely next year.