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‘We should pay for this with cash’: Gov. Mike DeWine balks at using state bonds to pay for Cleveland Browns stadium
@Source: cleveland.com
COLUMBUS, Ohio—Gov. Mike DeWine is open to giving the Cleveland Browns the $600 million they want from the state to help build a new suburban stadium.
But he doesn’t want to use state-backed bonds to do it.
For months, the Browns have pitched state officials on covering a quarter-share of the estimated $2.4 billion cost of a new, domed stadium in Brook Park, near Cleveland Hopkins International Airport.
The Browns want the state to provide $600 million in bonds that would be repaid with tax revenue from the proposed stadium and the proposed $1 billion mixed-use development surrounding it. (Some experts have questioned whether the stadium and surrounding development can generate revenue fast enough to pay off the bonds).
But DeWine, speaking with The Plain Dealer/cleveland.com editorial board on Tuesday, said that if the state issues bonds to raise the $600 million the Browns are looking for, costs could balloon to $1 billion, thanks to interest payments and other costs.
Instead, DeWine’s recently unveiled budget plan calls for doubling the state’s tax rate on sports betting companies.
The governor’s office conservatively estimates that the tax hike would raise an additional $288 million over the next two years. That money could be used to cover up to 40% of a stadium project’s cost; youth sports organizations could also see a portion of the money.
A newly created panel, with members picked by the governor and state lawmakers from both parties, would decide how to divvy up the money.
“We should pay for this with cash,” DeWine said. “We should not bond it with the state.”
The governor declined to say whether he would veto any legislation that includes state bond money for the Browns.
But he touted his sports-gambling tax plan as a preferable alternative, saying it would create a permanent funding source for stadium projects – not just for the Browns, but for all major- and minor-league facilities in the long run.
If his plan passes, DeWine argued, lawmakers will no longer need to decide whether to spend general-revenue fund money on sports teams’ lobbying requests instead of things like education.
“This is an opportunity to take this off the burden of the general fund,” he said. “And as I look to the future, I’m worried not just about my last budget, I’m worried about where we will be in the state of Ohio in 10 years or 20 years.”
In addition, the governor said, his proposal would eliminate the need for difficult calculations about how much economic growth a new Browns stadium is truly creating, as opposed to the team remaining in Huntington Bank Field, its 26-year-old downtown lakefront home.
DeWine said he and his staff came up with the proposal after talking with Hamilton County commissioners, who have been pushing for state help to pay for major renovations to Paycor Stadium, home of the Cincinnati Bengals.
State lawmakers’ initial response to DeWine’s stadium-funding plan has been skepticism, if not outright opposition.
House Republicans have expressed wariness about, among other things, raising taxes in general, as well as the effect that doing so could have on sports-betting revenue. The top House Republican, Speaker Matt Huffman of Lima, has said he supports the Browns’ state bond plan.
House Democrats, meanwhile, say they have little desire to approve state money to help the Browns’ billionaire owners move the team out of Cleveland to nearby Brook Park.
DeWine, on Tuesday, downplayed the potential effects his proposal would have on sports gambling in Ohio. After the state raised the tax on sports betting companies from 10% to 20% in 2023, DeWine said there was no drop in betting.
The governor said that as the state’s sports-gambling tax is charged to sportsbooks, Ohioans who wager on sports “will never see this” tax hike.
Sports-gambling industry officials have warned that DeWine’s proposal would, among other consequences, result in worse products for customers and could even cause some operators to close or leave the state altogether.
DeWine said he’s open to negotiation over aspects of his stadium-funding plan, including giving lawmakers control over which stadium projects receive funding, adjusting his proposed limit on how much of a stadium project’s cost can be paid for with state funding, and even expanding the youth activities that would be eligible to get a share of the money.
“It doesn’t have to even be (limited to) sports,” the governor said. “It could be theater. It could be all kinds of extracurricular things for kids that they can’t pay for now.”
The Plain Dealer/cleveland.com has reached out to a Browns spokesman for comment on the governor’s remarks.
After DeWine’s initial budget rollout, Dave Jenkins, Haslam Sports Group chief operations officer, said in a statement that while the Browns “look forward to learning more about the options this legislation may provide,” team officials will “work with the appropriate stakeholders and other experienced experts to develop alternative funding mechanisms for an enclosed Huntington Bank Field in Brook Park.”
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