COMMENTARY: Bank of Springfield Center and SMEAA — a massive drain on taxpayers

(Heartland Newsfeed) — The Illinois Policy Institute published a story Tuesday regarding the Springfield Metropolitan Exposition and Auditorium Authority (SMEAA) and the damning debt that Springfield taxpayers are on the hook for against their own will. Please note that I may be linking to some of IPI’s articles in this commentary. Springfield-area residents often see as many as ten different governmental taxing bodies on their property tax bills each year, most of which include SMEAA. While being furthest from being the largest line item on the tax bill, it still doesn’t prevent the fact that those taxpayers are on the hook to bail out the Bank of Springfield Center, formerly and more famously known as the Prairie Capital Convention Center. SMEAA has been operating in past fiscal years from 2013 until 2017 with a loss of $1.9 million at minimum according to financial statements. In the same period of time, SMEAA collected more than $9 million in taxpayer dollars with nearly half coming from property taxes. The 2017 figure on tax dollars collected came to more than $800,000, or roughly $22.57 on a Springfield property tax bill. In addition to the annual operational loss, SMEAA also has debt holdings of nearly $7.9 million, a clear sign of fiscal irresponsibility when Moody’s Investor Service downgraded the City of Springfield’s credit rating two levels in 2016 and once earlier this year when looking at the dire straits regarding the municipal pension fund. So why are Springfield taxpayers on the hook for SMEAA’s problems? You can blame the Illinois General Assembly for that when they established SMEAA in 1972 with the intent to “purchase, own, construct and lease convention centers and civic auditoriums.” The Bank of Springfield Center — as it’s known now — was constructed in 1978. But here’s the problem: the General Assembly granted SMEAA the right and power to levy taxes in the Springfield metropolitan area for their own purposes. Yes, it might look good for a city to have an arena for concerts and special events, but when fiscal irresponsibility surrounding the authority which oversees its operations ends up harming Springfield property owners, already financially crippled by the city’s own bouts of fiscal irresponsibility as a result of constantly increasing pension costs. I do not understand why governing bodies can’t be fiscally responsible and fiscally sane. When you look at each governing body from the state house down, it makes you wonder why these residents are paying a rate of 18% to the City of Springfield (roughly $467) only for the purposes of paying their public sector pension funds. There are two solutions to this all and this is where I can partially agree with IPI on one of them. The first solution is the consolidation of SMEAA operations with another governing body. IPI suggested a consolidation of SMEAA and Springfield’s tourism board. In some ways, it might work, but it might not be enough when there are more than 7,000 local governing bodies in the state of Illinois and that there needs to be a serious, major downscaling of state and local governments. The second solution involves the Bank of Springfield, who has naming rights on the arena for the foreseeable future. Maybe it would just be in their fiscal interest when it comes to investments to just purchase the arena outright and transferring the ownership from the public sector to the private sector. And maybe in the spirit of consolidation, consolidate the tourism board’s operations with the city’s Chamber of Commerce and again get rid of another taxing body. With questionable fiscal actions as a taxing body with very little to no governmental transparency, there are plenty of reasons to call SMEAA into question for consolidation/dissolution or an outright takeover of their holdings by the private sector. But regardless, Springfield area taxpayers should not be on the hook for a governing body’s fiscal irresponsibility at any point in time.