NFL owners met in Chicago two weeks ago to discuss Los Angeles. Owners competing to move to the nation’s second-largest media market presented their plans. No decisions were made, but a few things became clear. “We need certainty to any proposal,” said NFL commissioner Roger Goodell. “That’s one of the things we’re focused on.” NFL VP Eric Grubman told the Post-Dispatch that Gov. Nixon’s proposal has “made consistent progress” but that “risks remain” including “a litigation threat.”
This week I want to explain exactly what’s happening with Nixon’s convoluted scheme. This week may have marked the beginning of the end for his plan. Nevertheless, the game he’s playing with your money continues in at least five different forums and with dozens of participants: the NFL, Rams’ ownership, our state’s court system, the legislature, the Regional Convention and Sports Complex Authority, the Missouri Development Finance Board, and his own two-man task force.
The same week as the NFL hearings, Judge Beetem dismissed Gov. Nixon from the stadium lawsuit I filed with five other legislators here in Cole County. It doesn’t do anything to help Gov. Nixon. In a sideways legal strategy, Gov. Nixon refused to litigate on the merits. Instead, he instructed his lawyers to argue that he hadn’t taken any legally actionable steps to merit a lawsuit. Forget what Gov. Nixon has said for seven months, his lawyers argued, Missouri taxpayers can’t sue to stop him until he takes the final step of signing a document purporting to commit them to 30 years of debt.
Rather than achieve certainty with his actions, Nixon has only delayed it. For his stadium plan to proceed, he must eventually sign a Project Financing agreement similar to the one Gov. Ashcroft signed in 1991 for the first stadium – which the General Assembly approved. On signing that document, Nixon will create the standing necessary for litigation on the merits to proceed — and, then, the same suit will be filed against him. Meanwhile, litigation continues in St. Louis against the Regional Convention and Sports Complex Authority.
On Tuesday, the Missouri Development Finance Board approved $15 million in tax credits for the new stadium. Lt. Gov. Peter Kinder mounted a vigorous defense of Missouri taxpayers but was the only no vote on the Board. To the Board’s credit, the credits are contingent on the NFL’s agreement to keep a team in St. Louis and the signing of a 30 year lease with an NFL owner to keep their team in the new stadium. (Also to the Board’s credit, they allowed me to testify in opposition to the proposal at the hearing.)
Gov. Nixon’s insistence on proceeding with tax credits has compounded the uncertainty for his project. Under the current financing agreement, the state pays $12 million per year to the RCSCA for debt and maintenance on the existing dome. The debt will be satisfied in 2024. Gov. Nixon’s not-so-secret financing plan would have the RCSCA roll the existing debt into a new bond issue that provides new debt for construction of a new stadium.
To put the legislature in a trick box, Nixon’s plan is for the annual payment to remain $12 million. If he could pull that off, Nixon believes he can force the legislature into a heads-he-wins, tails-taxpayers-lose situation. If the legislature zeroes out the existing payment of $12 million, Nixon will argue that the legislature has a responsibility to pay it. Attorney General Chris Koster has said the state is not legally obligated to appropriate those funds. However, Nixon will argue that zeroing out the existing payment will risk the state’s credit rating and cost more money than to just pay it. Conversely, if the legislature appropriates $12 million for the combined old and new debt, Nixon will claim the legislature has approved the new stadium.
On Monday, state Sen. Rob Schaaf sent a letter to Nixon and a warning to anyone contemplating selling or buying the Nixon-backed bonds. “To give Gov. Nixon and the RCSCA fair warning,” Schaaf declared, I will do everything in my power to prevent appropriations for payments on bonds that include any funding for a second St. Louis football stadium.”
In response Gov. Nixon claimed it was just “a couple of legislators” and that “there’s a whole lot of legislators.” He’s right about one thing. There are a whole lot of legislators – the vast majority of whom are vehemently opposed to his plan to add 30 years of debt without a vote of the legislature. Senator Schaaf has since been joined by Sens. Ed Emery and Bob Onder. They will soon be joined by several more in the Senate and by dozens in the House before session starts again in January. And those are just the legislators who have opined in writing. Based on dozens of conversations I’ve had with legislators, I am confident that a super-majority of legislators oppose Nixon’s plan. However, even with just those three senators, that promised filibuster cannot be broken. Ask anyone who knows how the Senate operates.
The late Tom Schweich said there were two types of corruption in politics. The first is the straight-forward bribe. It’s rare. The second type he described as the short-circuiting of the ordinary political process by those with power and money – whether politicians, donors, or political insiders. Gov. Nixon’s stadium scheme is the worst and biggest example of type-two corruption in Missouri in at least a decade. He put together a scheme to avoid Sunshine Laws, avoid public votes, and avoid legal oversight as long as possible in the hopes that he could spend enough money to intimidate the legislature into backing down and put additional pressure on judges determining the legality of his financing plan. His theory is that if he just starts spending it, no one will have the guts to stop him.
There are right and wrong ways to change policy in a democracy. As bad as welfare for NFL billionaires is as public policy, Nixon’s type-two corruption to make it happen is even more troubling. With his no vote this week, Lt. Gov. Kinder pointed out that, if Nixon’s corrupt scheme would have worked out as planned, Kinder might have been the only person accountable to voters who ever had to make a decision on whether to bind them to 30 years of debt. Regardless of what you believe about stadium funding, everyone should agree that Nixon’s scheme is not how government should work in our state or country.
For Rams fans, the worst part is that Gov. Nixon had time last session to make an effort to get legislative approval. In an act of hubris, Nixon opted to try an end-run around the legislature. If he had tried the good government route, he would have had a fighting chance. Now, there is none.
Here’s where we stand: the NFL says it must have certainty in its efforts to strong-arm St. Louis and other communities into building stadiums for billionaires. But, as the NFL has noted, there’s “a litigation risk” – and it’s not going away until Nixon submits to litigation on the merits. Just as important, there’s more than an “appropriations risk” – there’s an absolute certainty that the legislature will not appropriate funds for a new stadium.
Gov. Nixon can whistle and pretend as if the deal is locked and loaded. He can tell the NFL it’s just a few legislators who oppose long-term debt to pay for a football stadium. But NFL and bond buyers beware: Gov. Nixon is the most veto over-ridden governor in the history of our state. He has close to zero influence on what the legislature does. He does not know what legislators think because he doesn’t bother to speak with any. The legislature opposes the project and will not blink.
Nixon’s notes aren’t worth the paper they’re printed on.