The budget proposed by House Republicans that passed on a mostly party line vote includes $600 million in 30-year state-backed bonds. That money would be the state’s portion of funding for a $3.4 billion domed stadium project for the Cleveland Browns in Brook Park.
There was a long shot attempt to challenge the idea, but it came up short.
The bonds will cost the state nearly a billion dollars over 30 years. Republicans who back the domed stadium project from the Haslam Sports Group have said projections provided by the Browns' owners show it's an investment that will pay off. The team has testified the stadium and surrounding retail and housing will raise $1.3 billion more than the state will need to pay back the bonds.
"This is consistent with our capital budget process. It's consistent with 60 years of history of issuing bonds. It's consistent with what all of our competing states are doing to attract new residents and keep our young people here," said House Finance Chair Brian Stewart (R-Ashville). "And it's backed up by detailed financial metrics, under which the new tax revenue generated by this project will pay the cost of the bonds with no out-of-pocket expense for our taxpayers."
Procedural move on the floor halts attempts to remove bond package
But in an unusual move, Stewart introduced an amendment early on in the floor debate—to require the team’s owners to put up more cash.
“We feel good about those projections. But to be extra sure, this amendment would increase the amount of the Browns initial deposit from $38.5 million to $50 million," Stewart said. "This $50 million would then grow to roughly $250 million over the life of the bonds, and this would then give us an additional $100 million to apply to the bond that if the tax revenues from the site fell short of paying this total amount. Folks, this type of security guarantee is not being given by other sports owners across America."
The same section of a bill can’t be amended twice in a day. So that scuttled planned proposals from Reps. Sean Brennan (D-Parma) and Ron Ferguson (R-Wintersville) to remove the Browns bond package proposal from the budget entirely.
"I understand what professional sports means to our city and to our fans. But it's not about team loyalty. This is about fiscal responsibility and priorities," Brennan said. "All of Ohio's taxpayers are being asked to shoulder a massive public subsidy subsidy for a private enterprise, an NFL franchise owned by a billionaire family with a team valuation north of $4 billion. Yet the return on investment for stadium deals like this has consistently failed to live up to their hype. Study after study has shown that publicly funded stadiums do not deliver the promised economic growth that they promise. And the tax revenue bump—it's marginal at best."
Ferguson said the bond package likely led five Republicans to join all Democrats in voting against the budget, and suggested other Republicans wanted to make it clear they didn't like the plan.
"A lot of people voted 'yes' on the budget, but they would have preferred this not being in there because there's so many great things to point to in this budget," Ferguson said. “The one thing that I think was the biggest sticking point was the money, the taxpayer money going to the stadiums.”
Ferguson proposed another amendment, to ban state loans for professional sports facilities. A Republican motion to set aside that amendment failed through an unusual tie vote. Lawmakers then narrowly rejected that amendment by only one vote. Republican House leaders claimed that amendment had nothing to do with the Browns bond package.
"This amendment specifically was about sports stadiums in general. I've not supported private tax money going to those at any time," said Ferguson, who praised the budget overall. "The amendment I offered was for one component that can be used by any sports stadium, not just the Browns, but any sports stadium."
Still no publicly released analysis of team's tax revenue projections
Ferguson added: "People only have so much money to spend. So the money that's going to be spent at this Browns stadium is money that just would have been spent at the old stadium, or the Guardians game, or the Cavs, or movie theaters, or anything else really that's going on. So I just don't really subscribe to that idea that it will drive economic growth. But we'll see where it goes.
So far, there has been no analysis of the Haslam Sports Group's estimates released from the Legislative Service Commission, which reviews legislation for lawmakers, or the Office of Budget and Management. But Gov. Mike DeWine told reporters on Tuesday when asked if there is such an analysis that he's seen it.
"At some point, I think that will be released. I have read it. You know, I didn't agree with all of it. Agreed with some of it. But I think for me, the issue is much bigger than the Browns," DeWine said. "I know we always talk about this as being a Browns issue. It's not really so much a Browns issue."
DeWine went on to talk about his proposal to double the tax on sports gambling operators to pay for a sport facilities fund, which he has touted as a solution to teams approaching the state for funding for those projects. He had said that would bring in between $130 million and $180 million each year. But his fellow Republicans in the House rejected that tax increase almost from the time DeWine proposed it in early February.
