The Leaflet: Sport Stadium Burdens

Published April 6, 2017

Following the departure of their NFL teams, Oakland, St. Louis, and San Diego are grieving the loss of more than just professional football. Combined, the three cities still owe $220 million in public debt related to the abandoned facilities. Some suggestions for managing the projects include privatizing stadium rebuilding, adding a Major League Soccer (MLS) expansion team, or using the stadiums for non-sports recreational events.

No matter what state and local officials end up doing with their abandoned stadiums, addressing the public debt and minimizing the burden on taxpayers should be their top priorities.

Since the 1990s, sports stadiums have relied heavily on taxpayer funds, and with subsidies increasing and the number of cities willing to offer them expanding, many team owners have held cities hostage to gain as much government money as possible. To save their pro-sports teams, some elected officials have implemented or proposed raising taxes to provide millionaire and billionaire owners with revenue for a new stadium. One popular tax proposal has been to increase local taxes meant to be paid by tourists, such as hotel fees.

In a Heartland Research & Commentary, Heartland Government Relations Director John Nothdurft wrote, “A new NFL stadium may bring additional visitors during the few home game weekends, but the rest of the year local businesses are burdened with higher tax rates without the increased consumer traffic.” This tactic could place a never-ending burden on taxpayers and unnecessary tax increases, Nothdurft argues.

In response to concerns from taxpayers worried they will have to shoulder the remaining stadium costs, cities such as San Diego and St. Louis have started to work toward convincing the MLS to allow those cities to provide expansion teams. In San Diego, a private investor group announced it would devise a plan to build a pro-soccer stadium without the use of taxpayer dollars.

In St. Louis, public financing plans for a soccer stadium recently failed to gather enough support from voters, thereby preventing an MLS team from coming to the city.

Graham Renz, a policy researcher at the Missouri-based Show-Me Institute, says in an interview with Budget & Tax News that government should get out of the stadium-construction business.

“We need to ask ourselves, ‘Is it the role of government? Is it the place for taxpayers to shoulder risk for private gain?” Renz said. “That’s not an appropriate role for the government, and it’s not appropriate for public leaders to burden taxpayers for private gain.”

In a Heartland Research & Commentary, Senior Policy Analyst Matthew Glans said publicly financed stadiums “are a clear example of corporate welfare,” and that “Governments should resist using tax-free municipal bonds and subsidizing new stadiums. Taxpayer money should only be used for core functions of government.”

It is evident in cities such as San Diego and St. Louis using taxpayer subsidies for new stadiums is highly unpopular and unproductive. If these cities want any chance of relieving the debt left by their respective ex-NFL teams, then private investments or new public ideas that support free-market innovation need to be prioritized. Cities and states should not, however, return to the same strategies that have failed them in the past.

States and cities are learning the hard way it’s impossible to predict when a sports team might pack its bags, but its within their power to make sure when a team does, it doesn’t leave taxpayers with massive financial baggage.

What We’re Working On

Energy & Environment
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This Heartland Policy Study by Isaac Orr, research fellow at The Heartland Institute, and Mark Krumenacher, principal and senior vice president of GZA GeoEnvironmental, Inc., examines the best-available scientific data on the effects of industrial sand mining on air quality, concluding those operations do not pose a threat to human health or the environment. “This Policy Study,” the authors note, “examined the best available scientific data collected by state agencies and nationally respected air monitoring scientists using EPA-certified equipment and sampling methodologies. Each of these studies has found industrial sand facilities do not contribute hazardous levels of respirable crystalline silica or particulate matter (PM) pollution, and therefore do not pose a threat to human health or the environment.” Read more

New Hampshire Senate Approves Universal ESA Bill
In this article for School Reform News, Managing Editor Teresa Mull writes about Senate Bill 193, legislation that would establish a universal education savings account (ESA) program in New Hampshire. The bill recently passed the state Senate. If signed into law, it would allow parents of public school and homeschool students access to 90 percent of their child’s state public education funding to spend on approved educational alternatives, such as private school tuition, learning therapies, homeschooling textbooks, and tutoring. It is currently pending in the state’s House of Representatives. Read more

Health Care
Personal Health Care Safety Net Medicaid Fix
This article by Justin Haskins and Michael Hamilton outlines a “Medicaid fix” that would expand patient choice by giving each Medicaid enrollee $7,000 in a health savings account. Recipients would be able to use the money to purchase health insurance, pay deductibles, cover the cost of co-pays, and pay for prescription drugs. Funds left over at the end of each year would automatically be rolled over into the following year, creating an individual safety net for every person on Medicaid. When people leave Medicaid, they would take their safety net with them and would be able to continue contributing to it tax-free. Families could pool their funds to cover sicker family members, and associations could be formed to share funds as well, ensuring no one is left without the money they need. Not only would this program end Medicaid as we know it and add more than 70 million people to the private health insurance marketplace, it would help younger people save for the future and could serve as a model for a larger program that could be used for lower-income Americans not receiving Medicaid. Read more

Budget & Tax
Research & Commentary: Pennsylvania Pension Reform
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines a proposed pension reform plan in Pennsylvania. “Taxpayers cannot afford for states to continue overpromising and underfunding their pension plans. In the short term, states should change pension formulas, curtail automatic cost of living adjustments, adjust pension rate of return assumptions to more realistic levels, and require workers to make higher contributions,” wrote Glans. Read more

From our Free-Market Friends
Beacon Center of Tennessee: Driving Real Change in Our Criminal Justice System
A bill proposed by the Coalition for Sensible Justice and championed by state Sen. Steve Dickerson (R-Nashville) and state Rep. Jeremy Faison (R-Cosby) would address problems linked to criminals having their driver’s licenses taken away abruptly after serving time, which now occurs in the state if those convicted are unable to pay back fees and fines in a timely fashion. The bill would allow some to have their fees waived or would allow for fees to be paid off in monthly installments, so that these individuals could have an easier transition back into society. The proposal would also allow some who have lost their driver’s license to qualify for a restricted driver’s license that would help people travel to and from important places, such as a job. The Beacon Center argues these sensible reforms would go a long way toward helping those who have just left the state’s criminal justice system and are trying to rebuild their lives. Read more