LeMay-America’s Car Museum gleams like a hood scoop atop a classic Ford Mustang. Parked on the east edge of downtown, it overlooks the skyline with the wistful feel of a hot rod at a drive-in movie.
The museum’s name declares a fundamental truth: This 165,000 square-foot showcase of car culture is a national treasure. But make no mistake: The museum is every bit Tacoma’s asset, too — an investment of money, land and civic pride, blessed by gifts from the estate of Harold LeMay, the late South Sound garbage-company magnate and car collector extraordinaire.
Washington taxpayers also have a stake in the museum. Whether they know it or not, they’ve done their part to keep the LeMay’s motor idling through the challenges of its first five years.
Before the museum opened in 2012, legislators granted a five-year sales-and-use tax deferral valued at around $200,000 a year. Now, as the expiration date nears, the LeMay board is asking for a five-year extension.
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We support the request, trusting the museum’s renewed pledge to pay it back. The economic recession knocked many esteemed museums and other nonprofits into reverse or neutral, and the LeMay is not alone trying to find traction.
Once ballyhooed as a major destination that would spur a $34 million local impact and bring more than 400,000 car enthusiasts a year to Tacoma, the museum now draws around 150,000 visitors.
Meanwhile, the LeMay is looking to refinance, as many of its IOUs come due this year, including a botched loan that led museum leaders to sue Tacoma City Hall last fall. They say the city’s banker improperly called for $118,000 lump-sum payment on a federal loan, plus tripled monthly payments.
The state tax break was custom-designed for the LeMay, though one would never know it by reading the ecumenical language of the House and Senate bills: “It is the legislature’s specific public policy objective to increase the fiscal stability of historic automobile museums in Washington state and thereby, strengthen the economic vitality of the communities in which the museums are located.”
In the scheme of a $42 billion budget, a few hundred thousand in deferred revenue amounts to what politicians call “budget dust.” And LeMay officials are quick to point out they’re not appealing for a tax exemption, not begging for debt forgiveness.
Museum leaders are simply asking for “more breathing room” as they embark on a major fundraising campaign this year and plan to build an endowment fund, LeMay President Paul Miller said in an interview last week.
What can’t be disputed is that the LeMay, along with its older siblings on Tacoma’s museum row, have created a vital center of gravity for local tourism. While they might never compete with the Boeing Museum of Flight or the EMP at Seattle Center, they’ve injected a cultural stimulus into the Pierce County economy.
That’s the Tacoma booster side of us talking.
The financial disciplinarian side, however, has concerns.
We can’t ignore the multi-billion-dollar public school obligation facing state lawmakers this year, among other budget constraints.
Nor can we forget that nearly every local candidate running for legislative office last year told this Editorial Board their top revenue-generating priority in 2017 would be closing tax loopholes.
Taken individually, tax breaks are easy to shrug off. Measured collectively, they add up in a hurry.
Washington declines more money than it collects. The Department of Revenue estimates that in the current biennium, the state gave $40 billion in tax breaks and collected $32.6 billion in revenue.
All told, Washington has more than 650 tax exclusions, deductions, exemptions, preferential tax rates, deferrals and credits on the books, according to a House Finance Committee report. Nonprofit organizations account for 91 of them.
Budget hawks in Olympia would be well within their rights to ask tough questions of LeMay officials at a Senate hearing Tuesday. It wouldn’t be out of line to ask for performance measures. Transparency and accountability are imperative for all special interests who enjoy relief from tax liability.
LeMay’s leaders seem well-suited for any additional scrutiny and game for the hard work ahead. They might find inspiration in legendary former Chrysler chairman Lee Iacocca, who revived his beleaguered automobile company after securing a loan guarantee from Congress in 1979.
“We at Chrysler borrow money the old-fashioned way,” Iacocca once said. “We pay it back.”
Ahead of schedule, as it turned out.
We hope the LeMay has so much success the next few years — a rousing fundraising campaign, the start of a strong endowment, and no more cause for litigation with its proud host city — that it just might do the same.