Springfield arena a multimillion-dollar drain on local taxpayers

Springfield arena a multimillion-dollar drain on local taxpayers

As part of a large and growing property tax bill, Springfield area taxpayers have to bail out the Bank of Springfield Center.

Springfield residents see as many as 10 different taxing bodies on their property tax bills each year. While far from the largest line item on those bills, property owners should take note of the money they pay to bail out a local arena: the Bank of Springfield Center.

In 2017, the Springfield Metropolitan Exposition and Auditorium Authority, or SMEAA, which operates the Bank of Springfield Center, collected more than $800,000 in property taxes. On a property tax bill for a typical Springfield home, that came out to $22.57.

From 2013 to 2017, the SMEAA received more than $9 million in tax dollars, with nearly half coming from property taxes. But even that wasn’t enough to bring the authority into the black.

The SMEAA saw an operating loss of at least $1.9 million each year from 2013 to 2017, driven by heavy losses at the center, according to SMEAA financial statements. Generous taxpayer subsidies have not been enough to cover that operating loss. The authority also holds nearly $7.9 million in debt.

The center’s performance raises the question: Why are taxpayers on the hook?

The Illinois General Assembly created SMEAA in 1972 to “purchase, own, construct and lease convention centers and civic auditoriums.” The Bank of Springfield Center – originally named the Prairie Capital Convention Center – was built in 1978. Granted by the General Assembly, SMEAA “has power to levy and collect annually, taxes upon all the taxable property in the metropolitan area” for its purposes.

Having an arena for concerts and special events is a nice feature for a city. But for Springfield residents already dealing with punishing property tax bills due to rising pension costs, it’s not clear that such an amenity should be propped up with taxpayer dollars.

In 2016, Moody’s Investor Service downgraded the city’s credit rating two notches, citing “considerable growth” in pension liabilities. In 2018, Moody’s again took note of Springfield’s pension woes, changing the city’s outlook from “stable” to “negative.” This has shown up on residents’ property tax bills: In 2017, nearly 18 percent of the typical Springfield homeowner’s property tax bill went to government workers’ pension funds, amounting to $467. And 100 percent of the amount paid to the city went toward government-worker pensions.

Considering this, there is little reason to pile on to already-high property tax bills to pay for concerts and conventions.

Taxpayers would be best served if the city stabilized its pension costs with reforms moving forward – this requires action from state lawmakers. But in the meantime, easing property tax burdens can also be accomplished incrementally by reprioritizing spending to services Springfield residents really need, rather than failing entertainment ventures.

SMEAA’s existence as a taxing body has questionable merits – and consolidation could be in its future – but if it is to continue, a greater reliance on private money would benefit Springfield taxpayers.

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