LETTER: Formula 1 race and the financial impact
The $5.5 billion in taxable sales for November (when the F1 race was held) makes it sound as if the race was a real money-maker (Jan. 30 Review-Journal). But this seems to fall apart when you break down the numbers.
First, this is a 5.5 percent increase over the previous November, so the actual increase in taxable sales relative to last year is $302.5 million and the actual tax revenue generated would be 8.375 percent of that, or about $25 million. I don’t know how much the county ended up spending on all the preparation work, but I am sure it was more than $25 million. (A figure of $40 million is mentioned online).
Now consider added expenses such as police overtime and hidden expenses such as business lost due to the construction (there is already a $20 million lawsuit in play from businesses claiming to be hurt by the F1 construction).
Finally, how much of the 5.5 percent taxable revenue increase was due to F1 and not inflation and/or a general increase in tourism? For example if other months last fall showed, say, a 4 percent increase from last year, then the relative F1 bump would be only an additional 1.5 percentage point or about $7 million in additional tax revenue.
True, F1 did fund some of the road work and some of that would have been eventually needed anyway. But all and all, it seems to be not much, if any, of a return for the months of inconvenience suffered by Las Vegas residents.