Sports Authority may need infusion of taxpayer cash

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Five years ago, the Harris County-Houston Sports Authority came face-to-face with declining tax revenues, and had to issue millions in new bonds to make up for the shortage (via Kevin Whited’s Publiustx.net):

Issuing the bonds was necessary to persuade one of the three major investment rating agencies, Moody’s, not to downgrade the authority’s bonds from investment grade status to junk bonds, said Ric Campo, chairman of the authority’s finance committee.

The new bonds were needed to make up for declining hotel and car rental tax revenues, which the authority receives to pay off bond debt. In 2002 and 2003, the revenues sagged 10 percent.

To meet the annual payments for $900 million in previously issued bonds, the authority had projected annual 3 percent increases in hotel and car rental tax revenues.

And taxpayers were assured that all was well:

Many of those who supported building the venues said the county’s residents would not pay the bills — they would be borne by visitors who stayed in local hotels and rented cars.

“The taxpayers of Harris County really aren’t affected,” said Sue Millican, the authority’s chief financial officer.

Not everyone believed all was well, however, and despite calls to shut down the unaccountable, quasi-governmental agency, the behemoth survived. Former HCHSA CEO Oliver Luck worked to bring a MLS franchise here, then became president of it. Former Houston City Attorney Gene Locke became general counsel to the Sports Authority, and now is a mayoral candidate. The agency is politically well-connected and will not be dismantled, despite its dubious raison d’

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Anne Linehan is a co-founder of blogHOUSTON.