Sales Tax Projection FAIL

Trolling around on the Bloomberg Terminal at the office, I noticed the Chart of the Day (a few days ago) belonged to our very own hometown.  But not in a good way.  It's a graph of the projected sales tax revenue used to fund the bonds taken out by our municipality to fund both the Bengals and Reds stadiums.

Whoops!  And they even included that bright red FAIL! in the actual chart.  Crazy, right?

To be fair, this applies to both the Reds and Bengals.  The Reds, however, did revisit their lease with the county.  The Bengals did not.

But hey, at least we negotiated a tough stadium deal with the Bengals so the ongoing costs borne by the County won't increase each year.  Oh wait.  The costs DO increase each year?  S***.  Nevermind.

So why does this story get feature play on Bloomberg - information engine for the entire financial industry?  Well, municipal bond markets make up an enormous amount of US savings (the muni bond market is in the trillions of dollars), particularly for individuals due to the tax-exempt status of their interest payments.  When the fiscal situation looks as bleak as it does here, people take notice.

So, yes, awesome win Sunday.  And hopefully Roy gives Himes the ol' horsecollar and breaks his leg ("hahaha, Sleeping, you don't really mean that"...YES I DO. Break his f***ing leg, Roy).

But given the cost the Bengals impose on our community, we as fans should expect big wins like Sunday to be a regular occurrence and need to hold ownership to the highest of standards.  Full text of the Bloomberg article after the jump.

By Terrence Dopp
    Sept. 18 (Bloomberg) -- Cincinnati’s pro football and
baseball teams’ recurring defeats threaten school aid and
property-tax relief, as the fund paying $650 million in debt for
the clubs’ stadiums faces a first-time deficit of $13 million.
    The CHART OF THE DAY shows proceeds from the half-cent
sales tax dedicated to stadiums built for two long-time losing
teams -- Major League Baseball’s Reds and the National Football
League Bengals -- lagging behind the 3 percent annual increase
Hamilton County, Ohio, projected. Between 2000 and 2008, tax
revenue fell a total of $22.6 million short of expectations.
    Stadium construction was funded by raising to one cent on
the dollar from a half-cent the county’s sales tax, an increase
voters approved in 1996. Officials promised property-tax relief
and annual contributions to Cincinnati schools. They may now
have to renegotiate or skip the $10.9 million school payment due
in 2010 and reduce the $19.3 million in property-tax rebates
scheduled this year, County Commissioner Todd Portune said.
    Voters rejected a sales-tax increase in 2006 and 2007.
    “If people feel excited about a team, they are much more
likely to say it deserves support,” said Andrew Zimbalist, an
economics professor at Smith College in Northampton,
Massachusetts, who studies stadium financing. “If it’s doing
poorly, there’s much less” desire to do so.
    The Reds are headed for a ninth straight losing season,
with a 64-79 record that puts them in next-to-last place in the
six-team National League Central Division. The Bengals have had
one winning streak in 18 years; they went 4-11-1 in 2008. The
Reds haven’t reached the playoffs since 1995.
    Hamilton County in 1998 sold about $345 million in bonds to
fund construction of Paul Brown Stadium for the Bengals. Two
years later, it borrowed $308 million to cover construction of
the Reds’ new home, Great American Ball Park.

Comments

[Rk]

Sick! What happens if we default on the lease? Can we get any help from Obama if we default on the mortgage?

[PAl]

I'm sure Mikey Boy was salivating over Dallas's new stadium. I bet Bob Bedinghaus had something in the lease that makes us upgrade PBS to an equivalent venue or we will have to pay him to make up for the lack of additional seats. After all, we are a small market team and we will not be able to compete otherwise.

[Wyatt]

Actually, if Pittsburgh's offensive coordinator is smart, he won't send Himes over the middle with either Rivers or Maualuga in coverage. Those guys might have a bit of an axe to grind (I realize Maualuga wasn't a Bengal when it happened, but I could swear I hear or read somewhere that he wanted to stick up for his former, and future, teammate) and the results, while pleasant for Bengals fans, probably wouldn't make most Steeler fans happy.

[Sly Vramavomovich]

Breaking his leg is so last year. I want a puddle of Himes' spinal fluids on the field.

[Scott Ricketts]

I want that grin wiped off Ward's face. If his head is separated from his body in the process, so be it.

[Eric]

I notice that the chart shows a baseline of $55M. Always fun to use a non-zero base to make charts look worse (or better) than they actually are.

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