If you built it, they will raise your taxes.
By: Hank Kalet
Doug Bandow in this week’s Washington Post Outlook section makes a pretty good argument against using public money to build sports stadiums.
As he says a point I’ve been making myself for years sports franchises are private businesses that do not share their wealth. Therefore, using tax money to build stadia is nothing more than corporate welfare.
"Stadiums don’t constitute a great unmet social need," he writes. "Sports should be a private enterprise, privately funded, just as it was during most of the first half of the 20th century."
He takes on the bogus arguments that the stadiums bring jobs and other ancillary economic benefits a canard proven false in far too many cities that it begs credulity to think it still carries some weight.
"Public finance experts Roger Noll of Stanford and Andrew Zimbalist of Smith College found in a recent study that ‘no recent facility appears to have earned anything approaching a reasonable return on investment and no recent facility has been self-financing in terms of its impact on net tax revenues.’ Even better stadium projects, such as Baltimore’s Camden Yards, require continuing aid for upkeep. As F.W. Walz, a Cleveland city councilman who opposed the nation’s first subsidized sports facility, a baseball stadium, observed in 1928: ‘Of course, they say the stadium will pay for itself, but we’ve heard that story before.’"
And what of the jobs and other economic benefits? "(E)ven if there is an economic benefit, it is small. University of Maryland economists Dennis Coates and Brad Humphreys figure that annual sports-oriented tax revenues and personal earnings from sports have been much less than 1 percent of the total earnings and revenues for Baltimore and Maryland. As they explain, ‘Although the absolute numbers seem large and impressive, they are small compared with the existing tax revenues and local economy, even if one grants that the proponents’ estimates are correct.’"
I mention this because of the long-discussed Newark arena project and the rather dubious arguments made on its behalf. The arena will not lead to a rebirth in Newark, anymore than Waterfront Park or the Sovereign Bank Arena have turned downtown Trenton into the place to be.