Iowa senators are looking to revamp one of the incentives the State of Iowa used to spur construction of Iowa Speedway in Newton to ensure it remains an option for future development of the “fastest short track on the planet.”
Thursday morning, the Iowa Senate Economic Development Appropriations Subcommittee voted unanimously to send Senate Study Bill 3162 to the Ways and Means Committee. The bill would ensure Iowa Speedway’s potential sales tax break can be tapped into by its new owners, while also extending the time frame in which it may be used.
When Iowa Speedway was constructed, the State of Iowa provided a sales tax rebate fund of up to $12.5 million, which could be used over a period of 10 years. Sen. Bill Dotzler (D-Waterloo), chairman of the subcommittee, said the speedway has only used $3.5 million over the course of the incentive period.
“I’ve been a season ticket holder since its opening, so I know how important this is to Newton, especially in light of the Maytag closure,” he said. “I used to shop at the antique store on the square (Pappy’s), but I just learned that has closed. That’s a sign the community still needs to get back on its feet, and we’re going to do whatever we can to help.”
Dotzler said the incentive package is one that has been used in a few other cases, each one tailored specifically for each individual project. The Iowa Speedway package is supposed to allow the track’s owners to get back 5 percent of the sales tax money it generates to use for improvements and infrastructure needs.
The problem is that since November, when NASCAR purchased the financially struggling track, a key provision of the package is no longer being met. The original package required at least 25 percent ownership of the track to be from Iowa.
NASCAR is based entirely out-of-state. SSB 3162 also adds an additional 10 years to the “sunset date” for the rebate pool to allow NASCAR more potential to fully benefit from the incentive. The original deal was slated to end in 2016.
To receive the full benefits of the rebate incentive, Iowa Speedway would have to generate nearly $200 million in sales tax revenue in the time remaining.
Iowa Senate Majority Leader Mike Gronstal (D-Council Bluffs) said he expects the bill to be approved soon by the full Senate. Iowa House Speaker Kraig Paulsen (R-Hiawatha), however, said he wants assurances Iowa Speedway will continue to upgrade and that he would like to see more cooperation with other racing venues, such as Knoxville Raceway.
“The Senate has been more supportive of Iowa Speedway than the House, but I suspect we’ll get it through both houses,” Dotzler said. “I’m pushing to get it passed quickly.”
Dotzler acknowledged some question why Iowa taxpayers should be helping NASCAR, which has “deep pockets,” but referred to Iowa Speedway President Jimmy Small’s testimony Thursday. During his testimony before the subcommittee, which included Sens. Jake Chapman (R-Adel) and Dennis Black (D-Lynnville), Small told of NASCAR’s love for the track and plans for future growth.
But, he added, the track has and will face financial challenges in the near future. According to interviews he conducted with media after the sale of Iowa Speedway, track designer and NASCAR Hall of Famer Rusty Wallace said the track’s financial situation had been dire, which led to the sale to NASCAR.
Without the incentive, Small said, the track will not be able to move forward as quickly as it had planned.
Dotzler, who has been a big supporter of Iowa Speedway in the legislature — he proposed an $8 million state appropriation to help the track prepare for a Sprint Cup race last year — said he’s looking to the future for the facility.
“You’ve got to believe the ultimate goal is a Cup race. No, they’re not going to talk about it, because it’s taboo for them to say anything about it, but you know that’s where this is headed,” he said. “But to get there, the track needs a lot of upgrades and improvements to the infrastructure. The airport runway needs to extended to handle the larger aircraft. And, we need better access off of the Interstate.”
“There’s a lot of work yet to be done, but Iowa will benefit greatly from it in the end,” Dotzler added. “It’s only right that we give back a little bit of that for infrastructure. It’s revenue generated by the track we wouldn’t have if it hadn’t been built.”