Governor Hobbs Supports Diamondbacks Tax Plan, City and County Opposed

The proposal for the Arizona Diamondbacks to receive tax recapture funds to facilitate Chase Field renovations and maintenance has received both critical support and serious opposition.

House Bill 2704 was introduced by Republican state lawmaker Jeff Weninger last month, and that bill will be before the state house for a vote before too long. Under the bill, sales tax revenue related to Chase Field sales, along with state income tax for employees, including players, would be directed towards those renovations.

It's estimated that this tax recapture could generate as much as $15 million to $20 million dollars per year, augmenting the team's stated plan to invest $300 million of their own money in renovations. If passed, the bill would go into effect October 1, 2025.

As reported by the Arizona Republic, Governor Katie Hobbs responded to questions about the proposal with a message of support, but with a caveat. "If they can reach an agreement that is acceptable to all the parties, then yes, I want to keep the Diamondbacks here in Arizona."

City of Phoenix Mayor Kate Gallego is opposed to the measure however, as it would divert revenue going into city coffers that currently help fund the police and fire department.

Assistant Maricopa County manager Zach Schira also told lawmakers that the bill would need to be amended so as not to divert funds currently headed to transportation projects and jails in order to move the county's position from opposed to neutral.

The city and county do not hold binding authority however. If both houses of the state legislature approve the bill and the Governor signs off, then it becomes state law, and the Diamondbacks would receive the public support they seek. Whether the Governor would sign the bill despite opposition from the city of Phoenix and Maricopa county is not clear.

The Tax Recapture mechanism has been used before in the state. Just such a law was passed to fund State Farm stadium renovations and maintenance. Speaking last month, Managing General Partner Ken Kendrick expressed the sentiment of "Why not us?" hoping for similar support.

In a statement to the Arizona Republic, team President, CEO & General Partner Derrick Hall said "the team looks forward to generating even more tax revenues for the County, City and State through our future redevelopment around the ballpark and a greater number of fans coming to a continuously modernized and maintained facility while visiting downtown businesses and restaurants,"

During a hearing prior to the bill passing the House Commerce committee so it could proceed to a vote before the house, various business leaders voiced support for the bill. That included the Arizona Chamber of Commerce and Industry, and the Arizona Lodging and Tourism Association, among others.

Others testified before the committee in opposition, such as the Arizona Tax Research Association, which voiced concern over precedent being set. They believe this sets the stage for other private companies to seek similar measures, further diverting public funds.

Economic justice group Worker Power also voiced opposition to tax dollars being diverted at a time when Arizona state, city, and county budgets face challenges and citizens deal with economic hardships brought on by inflation.

Some economists, such as J.C. Bradbury, have published numerous studies with the opinion that public subsidies of sports stadiums don't actually benefit the community.

Hanging over all of this is the cloud of uncertainty about the team's future in Arizona should the measure fail to pass. Last year the state lost the Arizona Coyotes to Salt Lake City, creating concern and angst that the Diamondbacks could take a similar route.

Much has been made of Kendrick's comments at the beginning of last spring that "time is running out" to secure a deal (the lease at Chase Field expires after the 2027 season). He also referenced the fact that other cities covet a Major League franchise.

In numerous subsequent statements however, Hall and Kendrick have insisted the team has no intention of leaving the state, and merely seek a public/private partnership to ensure a state-of-the-art facility in downtown Phoenix for the foreseeable future.