Organizers of a future Formula One Race in Austin, Texas are being challenged in court by Travis County residents who disapprove of Texas Comptroller Susan Combs giving the organizers a $25 million public subsidy.
Plaintiffs Ewa Siwak, an Austin teacher; Richard Franklin, a school board member; and Richard Viktorin, an accountant, filed their claim in state District Court in Travis County. They are being represented by attorney Bill Aleshire.
In a written statement, Aleshire said that the lawsuit “strikes at the heart of the issue of whether Formula One even qualifies under the requirements of Texas law for such public funding.”
The funds are coming out of the comptroller’s Major Events Trust Fund, an economic incentive program, which has been used to attract major sporting events to Texas, such as the Super Bowl and an NBA All-Star game. The justification for the fund is that such events are expected to generate “extra” sales tax revenue. The comptroller just advances the money to such events ahead of time.
Organizers have been proactive, issuing an economic impact statement that projects that the Austin area would see a $287 million increase in economic activity by hosting Formula One in 2012.
The plaintiffs argued in their lawsuit that Combs did not have authority to extend the money because the race had not been finalized, promoters were supposed to participate in a “highly competitive selection process” to be eligible for the money, and that the economic impact study put forward by the promoters was flawed.
The suit strives to prevent “the unlawful plunder of public funds for promoters of a Formula One race at a time when the State of Texas claims it cannot afford to adequately fund essential services, such as its public education system.”
