U.S. Grand Prix: Texas Taxpayers to foot $25 million
The taxes race lovers are ready to pay for their love for Formula One racing. Unlike the statement made earlier last month, it has been finalised that it is the Texas taxpayers that would cough up $25 million in a deal aimed to pull off the first Formula One race to Austin. This money, collected through tax, would be deposited in the Major Event Trust Fund of the state to pay off the sanctioning fee of Formula One which is a London-based group. These are the pre-requisites that have to be fulfilled which will allow Austin the licence to host the first of the planned ten Formula One races for Austin beginning from the year 2012. Tavo Hellmund, who is a local resident of Austin, would be pitching in with his services of organising and promoting the races.
It was explained by the state officials last week that the money from the fund would go into the kitty of the local governments rather than the promoters, in order to compensate the costs that would be required to host such a mega sporting event. In the previous years, this fund was utilised to cover the costs of hosting the Super Bowl as well as the basketball all-star games. The money was collected from sales taxes and other tax receipts from the entire community that would host these mega events.
The legislator approved this move last year in the Texas Legislature's authorization, which allowed the use of the general revenue funds for Formula One racing.
The director of local government assistance and economic development for the state comptroller's office, Robert Wood, said that this is the first time ever that the trust fund is being used in this manner. He added that officials are so far figuring out the details of the entire operation.
Last week, director of local government assistance and economic development for the state comptroller's office, Bernie Ecclestone, announced that from 2012, Austin would host Formula One races until 2021. Normally, it is the local organizers that arrange the licensing and organizing fee which is said to be between $25 million and $50 million for this event each year, as claimed by Formula One.
As the event’s budgeting goes is still in theory, the second years’ event would produce the money from the first years’ taxes. Furthermore, the revenues generated from the first month would result in the fees for the second year. If this cycle goes on as planned, the tenth year of the contract will bring the money back to the people who had invested it in the first year. The final race receipts should technically equal the $25 million invested by Texas, Austin.
State officials assured the people that the additional taxes that they will pay is a long term investment that will be paid back to the taxpayers in many folds. The officials are certain that the event will be magnetising millions of dollars back to Texas when hundreds and thousands of race fans would flock to the city to witness the three day mega event.
Texas Controller, Susan Combs claimed on Tuesday that he was just too thrilled at the entire scenario. He exclaimed that it would surely be a wonderful activity for the state. He said that it would not only excite the locals or the people from the neighbouring states, rather it would even let the folks in Malaysia and Turkey to copy the Texas way of doing things. This is certainly a new way of doing things that many people had no clue about. On the contrary, many people would want to visit and invest in Texas. Susan added that this surely is a wonderful development for the residents of the state who will soon be proud of the U.S. Grand Prix in a few years time.
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