Shortfall projected in Saints, Hornets payments
If the state doesn't meet the payments required by the contracts, the Saints and Hornets could leave the city. State officials are looking for ways to come up with $6.4 million this year and $19.5 million next year to fill the projected gaps in the payments due to the teams.
Reasons for the shortfall include lower-than-projected revenue from the New Orleans area hotel tax and the state's inability to sell naming rights to the dome _ two sources of income that were meant to help fulfill the state's obligations to the teams.
Lawmakers could use direct state general fund money to fill in the shortfalls but, even with the state currently running a surplus, that would be politically unpopular.
“If I go home and tell them I voted for something like that, it might be one of my last votes,” said Rep. Bernard LeBas, D-Ville Platte, talking about a direct appropriation to the Saints.
Several members of the House Appropriations Committee complained Monday about the state's ongoing payments to the NFL and NBA teams, as officials with the commission that oversees the Louisiana Superdome and the New Orleans Arena detailed the shortfalls.
“These teams are making mega-millions of dollars while taxpayers are getting the shaft,” said Rep. Elbert Guillory, D-Opelousas.
The chairman of the Superdome commission, Ron Forman, said the pro sports teams generate millions of dollars in tax income, attract tourists to the city and generate free advertising for New Orleans during games. He called them an “economic engine for the state.”
The shortfall debate is a near-annual discussion at the Capitol because revenue for the Superdome commission regularly has come up short of what is needed to cover the state's payments.
“We have ever-escalating fixed costs but we have varying revenues,” said Doug Thornton, the regional vice president of SMG, the company that manages the Superdome and the arena.
The state under former Gov. Mike Foster negotiated a 10-year contract with the Saints that runs through the 2010 season, guaranteeing the team $186.5 million in payments, money the state was hard-pressed to find even before Hurricane Katrina wrecked the New Orleans economy.
The annual payment to the team is $20 million this year and grows to $23.5 million next year.
The payment includes a share of concessions earnings, a piece of local tax income and outright cash.
Gov. Bobby Jindal's administration is in negotiations with the Saints about a new contract that could keep the Saints until 2025 and beyond.
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