The Arlington, Texas City Council unanimously approved the creation of a ballot resolution that will ask voters in November to approve $500 million in sales and tourism tax hikes to subsidize a new sports stadium for the Texas Rangers, the city’s Major League Baseball team.
David Surdam, a professor of economics at the University of Northern Iowa, says it’s unlikely the public will benefit significantly from the subsidy.
“Whenever they say it’s so beneficial, you have to ask, ‘Why doesn’t the owner do it and reap the profits?'” Surdam said. “The research I’ve read said that it was pretty dubious that there was much of a positive benefit from this.
“There’s really this substitution effect, where other entertainment venues might have done better in the absence of the stadium,” Surdam said. “The losers may not always know they’re losers, but the winners always know they’re winners. They’re concentrated, they’re well-organized, they get disproportionate benefits in one way or another. Then you get all these people who are losing on the deal. Maybe they don’t care for sports. Why should they pay for the stadium?”
Debt Load Already Heavy
James Quintero, director of the Center for Local Governance at the Texas Public Policy Foundation, says the ballot measure is a bad deal for Arlington taxpayers, now and in the future.
“The City of Arlington already owes a significant amount of debt,” Quintero said. “For fiscal year 2014, the total outstanding debt held by the city is in excess of $1.1 billion. That includes both principal and interest, but even so the total amount of debt owed by the city is borderline astronomical.
“To go before voters and ask for an additional almost 50 percent increase in the existing debt load is not good fiscal policy, in my mind,” Quintero said.
Arlington lawmakers should stick to doing the things government is supposed to do, Quintero says.
“I don’t think the city should be in the baseball-stadium-building business,” Quintero said. “You’re potentially diverting revenue from what government ought to be doing. Instead of building these big, grandiose stadiums, what city government ought to be providing is for things like public safety, health and welfare, roads, the things that we generally associate with the core functions of government.”
Ben Johnson ([email protected]) writes from Stockport, Ohio.
Robert A. Baade and Victor A. Matheson, “Financing Professional Sports Facilities,” International Association of Sports Economists, January 1, 2011: https://heartland.org/policy-documents/financing-professional-sports-facilities/