The Tourism and Sports Authority was the target of legislative actions the week of April 19, with the House giving preliminary approval to end a guaranteed subsidy for the TSA, and Senate Republicans holding up the confirmation of a TSA board member.

Without debate, the House on April 21 approved for third reading a bill (S1037) sponsored by Appropriations Chairman Russell Pearce that would stop an automatic payment from the general fund to the sports authority when revenues from state income taxes on the Arizona Cardinals fall below a certain threshold.

Before the House gave tentative approval of S1037, a floor amendment was adopted requiring the TSA to repay the general fund by June 30, 2005, a total of $1.4 million in funds it received in fiscal years 2002 through 2004.

Under the law that created the TSA in 2000, the authority receives the higher amount of either state income taxes paid by the NFL team and players or a state-guaranteed minimum of $3.5 million beginning in 2002 and increasing 8 per cent each year. If the income taxes do not equal the guaranteed minimum, the difference is automatically made up from the general fund.

In fiscal 2003, and so far in 2004, the tax revenues have been under the guaranteed minimum by $1.5 million,” said state auditor Dale Chapman. He added that the shortfall for fiscal 2005, which begins July 1, has been estimated at $1.2 million.

Why Revenues Dropped

Mr. Pearce’s move to end the subsidy came on the heels of a March 26 state audit, which recommended the Legislature take steps to reduce or end the obligation to the TSA.

TSA Chief Financial Officer Chuck Foley said economic downturns and other factors affecting the incomes of Cardinal players and personnel caused the tax revenues to drop in recent years.

In a written response to the audit, TSA president and CEO Ted Ferris said, “[T]he audit ignored the estimated $20 million that will accrue to the state general fund over the course of the construction from the multipurpose [Cardinals] stadium facility, in addition to the millions of dollars from Cactus League and youth sports projects.”

The two primary sources of TSA revenue are voter-approved lodging and car rental surcharges in Maricopa County to help pay for the construction of a $346.3 multi-purpose football stadium in Glendale for the Arizona Cardinals, Cactus League facilities, youth and amateur sports facilities and programs, as well as tourism projects.

The NFL/Cardinals tax is on income earned by the Cardinals organization, its players, employees and spouses. The guaranteed minimum is needed to secure bonding for sports authority projects, according to Mr. Foley.

Glendale Owes TSA $500,000

Arizona Capitol Times has learned that Glendale owes the TSA $500,000 as part of a facilities district arrangement for the Cardinals stadium. The city is seeking financing to make the payment, which was due last October, said TSA spokesman Brad Parker.

TSA Board Confirmation

In a related matter, the Senate Republican caucus is holding up action on the confirmation of Thomas Lee Hocking for the Cactus League seat on the TSA board because, some senators say, he might have a conflict of interest.

Mr. Hocking, a Scottsdale investment banker and financial consultant to several cities, including Glendale, where the new Cardinals stadium is being built, says every board member faces the possibility of conflicts as volunteers with business or other interests. When those conflicts arise, he said, the board member should recuse himself or herself, which he announced in a TSA meeting he would do if a decision were to be made that involved the city of Glendale.

“I don’t understand what the real issue is,” said Mr. Hocking, who has been on the TSA board since August, a five-year appointee of Governor Napolitano.

In the Senate Finance Committee April 20, Sen. Jim Weiers, R-10, changed his vote against Mr. Hocking’s confirmation, which then was forwarded to the Republican caucus, 5-3. The Democrat caucus passed the confirmation, but the majority caucus refused to act on it April 21.

Senate Faces Confirmation Of 50 Appointments

The Senate Judiciary Committee on April 20 rejected Ms. Napolitano’s nominations of Randolph Lumm (2-4) to the Appellate Court Appointments Commission and Tracy Duvall (3-3) to the Pima Trial Court Appointments Commission.

The Senate has yet to act on more than 50 other nominations to agencies, boards and commissions, including Dora Schriro, director of the Department of Corrections, and David Berns, director of the Department of Economic Security.

“We’ll get them done…unless there’s a problem,” said Senate President Ken Bennett.

Ms. Schriro’s first year on the job ends June 30, and Mr. Berns’s first year will end Aug. 1.

If gubernatorial nominations are not acted upon by the end of a nominee’s first year of service, the nominee may not serve until action is taken on a re-nomination, a Senate aide said. If re-nomination does not occur, someone else must fill the position.

Mr. Bennett says Ms. Schriro’s confirmation will not be taken up until May, when the Legislature is expected to have reviewed the results of all investigations into the Lewis Prison hostage taking. —