Kansas lawmakers to debate whether wooing the Chiefs with new stadium is worth the cost
TOPEKA, Kan. — Lawmakers in Kansas are trying to do that lure the Kansas City Chiefs Their state claims that helping the Super Bowl champions build a new stadium could net Kansas millions of dollars in income taxes from players and coaches, who currently head to Missouri.
Some economists doubt whether new revenue from “jock taxes” would be significant for Kansas, and debate emerged over the issue ahead of a special session of the Kansas Legislature set to convene Tuesday. Lawmakers expect to consider a plan to approve government bonds to help professional baseball’s Chiefs and Kansas City Royals finance new stadiums on the Kansas side of their metropolitan area, which is split by the Missouri border.
Professional athletes and touring entertainers pay income taxes not only in their home states, but also in other states where they perform, if those states impose income taxes. For athletes, Kansas taxes a percentage of their income based on the number of games they play in the state – so that if a visiting minor league infielder plays 12 of his team’s 120 games in Wichita each season, they tax 10% of their income is taxed.
Economists who have studied professional sports teams for decades have concluded that subsidizing their stadiums plays a major role is not worth the cost for their communities. But proponents of bringing the Chiefs and Royals to Kansas believe the skepticism doesn’t properly take into account taxes on the large incomes of the top professional players.
“The amount of dollars coming in from the income tax offset a lot of the things we do here,” said Sen. JR Claeys, a Republican from central Kansas who is working on the stadium plan. .
Kansas already collects some income taxes from professional athletes, although the state Department of Revenue does not have figures. The state is home to NASCAR’s Kansas Speedway, Sporting KC for professional football, and several minor league baseball and hockey teams.
Missouri is home to the Chiefs, the Royals, the St. Louis Cardinals of Major League Baseball and the St. Louis Blues of the National Hockey League, plus two minor league baseball teams.
Missouri collected nearly $34 million in income taxes from professional athletes during the current budget year that started July 1, a 9% increase from the $31 million collected last year, the state said. However, during the current budget year, when the Chiefs won their third Super Bowl in five years, football player taxes increased 39%, from about $14 million to $19 million.
It’s not clear how much of Missouri’s revenue would come to Kansas if lawmakers were successful in attracting the Chiefs, the Royals or both.
Geoffrey Propheter, an associate professor of public affairs at the University of Colorado Denver who regularly publishes articles on sports economics, predicted the amount for the Chiefs would be “trivial,” just a few million dollars, even if they also moved the practice facilities to Kansas.
He also said lawmakers should consider additional issues that come with a new stadium, such as traffic congestion, light pollution and how rising property values make housing less affordable for local residents.
“On the Kansas side of the river, they get access to the team without paying the fees,” he said. “That’s a fantastic situation to be in.”
Others’ figures for potential new income tax revenue are millions of dollars higher.
One potential question is whether the Kansas rule could withstand a lawsuit. Edward Zelinsky, a professor at Yeshiva University’s Cardozo School of Law in New York City, said such rules unfairly overburden athletes.
He is a specialist in tax law and knows how states tax visiting athletes. In the 1990s, Zelinsky challenged a New York rule like Kansas’s, saying New York taxed all his income even though he works largely from home in Connecticut. He lost, but in 2015 the Ohio Supreme Court ruled that visiting athletes should be taxed based on the number of work days they spend in the state — in that case two out of 157 — rather than the games played there, a larger percentage. .
Zelinsky said stadium proponents can argue that taxing athletes’ incomes is a benefit, but it doesn’t affect the economy around a venue.
“It will be a nice chunk of change, but I wouldn’t use this to control the debate,” Zelinsky said.
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Associated Press writer Summer Ballentine in Columbia, Missouri, contributed to this story.