The use of taxpayer funds to support billionaire-owned stadiums has been a contentious issue, and it’s escalating further in Texas. Recently, the Plano Independent School District (PISD) voted to allocate $250 million of its budget towards building a new hockey arena for the Dallas Stars. This decision follows a previous commitment from the city of Plano to set aside $700 million in taxpayer money for the $1 billion project.
Initially presented as a collaboration between public and private resources, the revised plan now indicates that a staggering $950 million of taxpayer money will finance the arena, with the Stars contributing a minimal amount later on. This move raises eyebrows, especially considering the reported net worth of Stars owner Tom Gaglardi, which stands at $5.5 billion.
PISD is defending its financial involvement on two grounds: first, they claim an arrangement allows them to host graduations and other events at this new venue, and second, officials assert the project will yield $438 million in revenue over the next 25 years. Yet, it’s unclear how they arrived at that figure, or why officials consider investing $250 million reasonable for a district already struggling with budget deficits.
According to Johnny Hill, a deputy superintendent, the district is facing a projected budget deficit of $44.8 million in the upcoming fiscal year. Hill mentioned that PISD expects to see “substantial financial benefits” from the arena deal during a work session in June.
There’s a significant lack of transparency from both the Plano City Council and PISD. While it’s true that local schools can host graduations at the new arena, this should have been incorporated into the original $700 million deal with the city. The city council defended their hefty investment by promoting the arena as a venue for concerts, cultural events, and various community activities. By requiring this additional $250 million for graduations, they appear to be essentially paying twice for a service that should already be included.
Supporters of the project argue it will enhance local property and sales tax revenue, though that argument seems misleading. Plano intends to create a “Tax Increment Reinvestment Zone” (TIRZ) as part of its agreement with the Stars. This Texas initiative allows the collected property and sales tax from a set area to be reinvested back into that same zone. This implies the funding will mostly benefit the Stars’ arena and surrounding businesses, but a feasibility study suggests that Plano itself may not gain anything from the arrangement.
According to the study, new development that wouldn’t have happened without the TIRZ will yield approximately $1.4 billion in new property taxes, yet the city won’t retain any of that. Similarly, it’s estimated that about $245 million in sales tax revenue will be generated under the same conditions, with the city seeing none of it.
There are ongoing concerns about who will cover the expenses for necessary infrastructure upgrades needed for the development. City officials have not clarified how improvements to roads, sewage, and electrical systems will be funded, leading some critics to suggest that these costs might ultimately fall on taxpayers.
In summary, Plano is committing $700 million, while PISD is contributing $250 million. This setup seems to promise no direct financial returns, yet totals nearly $1 billion in taxpayer money — all to ensure that graduations and other vague “community events” can occur at the new arena.
In November, Plano voters will have the chance to approve “Proposition A,” which proposes a new “venue tax” to help finance the arena. This would mean that the Stars would pay nothing, while revenue would come from car rentals, hotels, and event ticket sales. Therefore, Stars fans in Plano could end up paying an additional tax on their tickets to support the arena they are already funding.
This deal might be one of the most questionable stadium financing arrangements proposed to date.
