Is Obama proposal the end of taxpayer-subsidized sports stadiums?

March 17 05:12 2015

If President Obama has his way, the nation’s taxpayers would not help finance a new arena proposed for the Milwaukee Bucks professional basketball team. Nor would taxpayer-financed, tax-free bonds be used to help finance a new stadium being discussed in St. Louis for the NFL Rams, or in Oakland for a new complex aimed at keeping the area’s professional football, baseball and basketball franchises from leaving town.obama-immigration-1

An obscure item in the president’s new budget would put an end to the long-standing practice of states and cities using tax-exempt bonds to finance professional sports arenas, a practice that costs the U.S. Treasury $146 million, according to a 2012 Bloomberg analysis. The proposal comes as many team owners are pressing cities and states for new facilities, with some threatening to move elsewhere if they don’t get them. State and local officials are wary of seeing pro teams depart, taking prestige and tax revenue with them. But they are also taxpayer-minded and budget-conscious.

Dennis Zimmerman, an economist who worked for the Congressional Budget Office and is now director of projects for the American Tax Policy Institute, is a longtime critic of the financing. He said the president is right in proposing to eliminate the subsidies that benefit often wealthy professional team owners. “I’m glad he put it in the budget,” Zimmerman said. “Tax-exempt bonds are supposed to be for state and local infrastructure” and not private business.

But politicians and pro-growth business advocates say stadium construction creates jobs, promotes economic development and boosts ancillary retail businesses, such as restaurants, which benefit from having a team in town. They say the teams generate income and sales tax revenue. For their part, team owners are more than happy to get the financial help. In Wisconsin, Republican Gov. Scott Walker in January proposed funding a $470 million arena for the Bucks with the help of $220 million in state bonds as part of his budget plan.

Walker said that without a new arena, the Bucks would “likely leave Wisconsin in 2017, costing the state nearly $10 million per year in income tax collections alone.” The proposal is drawing criticism from conservatives such as the Wisconsin chapter of the free-market group Americans for Prosperity. State director David Fladeboe said the group is “disappointed that the (governor’s) budget still plans to use public funds on the Milwaukee arena.”