Texas taxpayers will put up the first $25 million to attract the new Formula One U.S. Grand Prix to Austin -- money state officials previously said would be used to reimburse local governments for costs incurred by hosting large sporting events.
The money, which will be deposited in the state's Major Event Trust Fund, will pay the sanctioning fee charged by the London-based Formula One Group for the first of 10 annual races planned for Austin starting in 2012, the Austin American-Statesman reported Wednesday.
The fund had previously been used to cover costs associated with hosting the Super Bowl and all-star games. The Legislature, however, authorized the use of general revenue funds for F1 in the last budget.
After the first year, the sanctioning fee would be paid each year with proceeds from the previous event, meaning the fund should break even at the end of the 10-year contract, officials say.
"It's going to be wonderful for the state," said Texas Comptroller Susan Combs of the event and the attention it could attract to Texas.
Backers of the event say the $25 million is an investment that will be repaid as race fans flock to Austin. Construction of the track is expected to run $250 million, and Combs said that no public money would be used for the project.
"The state is not building the facility," she said, saying it's up to the race backers to demonstrate they can get it done. "The proof is in the pudding."
