In Stadium Building Spree, U.S. Taxpayers Lose $4 Billion

I found this article really funny a real knee slapper this one is.

http://www.bloomberg.com/news/2012-09-05/in-stadium-building-spree-u-s-taxpayers-lose-4-billion.html

$4 Billion

Tax exemptions on interest paid by muni bonds that were issued for sports structures cost the U.S. Treasury $146 million a year, based on data compiled by Bloomberg on 2,700 securities. Over the life of the $17 billion of exempt debt issued to build stadiums since 1986, the last of which matures in 2047, taxpayer subsidies to bondholders will total $4 billion, the data show.

Those estimates are based on what the Treasury could have collected on interest from the same amount of taxable bonds sold at the same time to investors in the 25 percent income-tax bracket, the rate many government agencies assume. In fact, more than half the owners of tax-exempt bonds pay top rates of at least 30 percent, according to the Congressional Budget Office. So they save even more on their income taxes, a system that U.S. lawmakers of both parties and President Barack Obama have described as inefficient and unfair.
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Replies

  • Shawn C.Shawn C. Senior Member Posts: 7,027 Senior Member
    I'm going to go out on a limb and say that you don't play fantasy football.
  • I don't fantasize about guys playing football.
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,495 Senior Member
    How much tax revenues do stadiums and the sports bring in?
  • The NFL is a tax free non-profit. States generally raise taxes on the tax payers to pay for the stadiums. They stadiums are not generally owned by the teams but by a local sports authority that signs a contract with the team for a certain period of time for it to play there.

    As the Coburn report points out, “state and local governments usually exempt these organizations from state income and sales tax as well….” As the Indiana Business Journal reported, that proved to be a nice little perk when the Super Bowl was held in Indianapolis this year, because “hotels and restaurants … won’t be taxing National Football League employees. They’re exempt from paying, according to an Indiana Department of Revenue directive. The NFL is using its tax-exempt status as a 501(c)(6) to avoid paying the taxes, in addition to fuel, auto rental and admissions taxes.”

    In Atlanta’s case, a hotel-motel tax was used to build the Georgia Dome and would also be used to help finance the proposed new open-air stadium demanded by the Falcons. If Georgia tax law is like that of many states, the NFL and its employees would be exempted from paying the tax that everyone else must pay to subsidize stadiums built for a highly profitable industry.

    http://blogs.ajc.com/jay-bookman-blog/2012/10/18/did-you-know-that-the-nfl-is-a-tax-exempt-nonprofit/

    Technically, the city owns the stadium. Personal seat licenses or PSLs are sold through [/B]a public agency, tax-free. Profits are then used to pay down the owner’s share of the NFL loan. The money from the PSLs never goes directly to the teams, though the teams save millions of dollars in taxes and the loan from the NFL is paid down significantly, providing a very significant benefit to the owners.

    http://thinkprogress.org/alyssa/2013/04/25/1923231/coburn-nfl-tax-exempt/


    The Vikings pay $20 million annually in State and local taxes. In 2001, the team paid $11 million per year.
    Visiting teams pay approximately $1 million per year in taxes to the State of Minnesota. (Big Whoop! The new stadium will cost taxpayers over $400 million)

    A study by the University of Minnesota on the Vikings-Cowboys playoff game in January 2010 found that non-metro game attendees spend nearly $6 million in restaurants, hotels, retail stores and on transportation in the Twin Cities per Vikings game. (So what. Wouldn't they still spend money if the owners paid for their own stadiums? Are we picking winners and losers? )

    The Metrodome was built for $55 million, including $33 million in public dollars. The State of Minnesota contributed none of this money but has received over $320 million in tax revenue since the facility opened. (Local taxes were used to build the metro dome. )

    http://www.vikings.com/stadium/new-stadium/facts.html ( the vikings website ).

    None of these figures come close to the over 400 million laid out for a new stadium.
  • But let's keep our focus on $14 muffins and some loser rock star grifting some food stamps.
  • And once you got one mouth on the public teet let the sucking continue.

    Larkin doesn’t actually say that the Indians need a new stadium (again), just that they need to be more “profitable” somehow. And as Bartimole notes, Cuyahoga County residents could soon be asked to extend the sin tax that paid for the Indians’ stadium — and use it for future major improvements for the Indians, Browns, and Cavaliers. Or maybe it would be simpler just to tax beer drinkers and give the money straight to the Indians owners to boost their profits and keep them happy — all the other kids are doing it.


    http://www.fieldofschemes.com/2013/09/23/5936/5936/
  • BufordBuford Senior Member Posts: 2,991 Senior Member
    Why do you hate football?
    Just look at the flowers Lizzie just look at the flowers.
  • For the reasons listed above. I do go to our high school games once and a while.
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,495 Senior Member
    Don't be such a hater.

    Do you also hate college football and colleges that are tax exempt even though they all operate as a for profit businesses?

    Sports teams lift everyone's boat in the area they are in.
  • College teams don't have owners making boatloads of cash at taxpayer expense. College football has it's own set of problems.

    Sports teams don't bring in the money they say they do.

    http://www.politifact.com/florida/statements/2013/may/01/friends-miami-first/miami-dolphins-pac-says-stadium-renovation-will-cr/

    But keep your focus on food stamp fraud cause that's where the funny is.
  • When my son's elementary school needed a new playground the district didn't have the money, the PTA and parents had can drives, paper drives ect to raise the money. All the while the Twins and Vikings were bitchin about getting a new stadium or they'd move. Politicians fall all over themselves gettin into the public treasury for the owners to build themselves a playground.

    Pro-sports can suck it.
  • joekrz wrote: »
    Don't be such a hater.

    Do you also hate college football and colleges that are tax exempt even though they all operate as a for profit businesses?

    Sports teams lift everyone's boat in the area they are in.

    I thought you were against picking winners and losers.
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,495 Senior Member
    greenman wrote: »
    College teams don't have owners making boatloads of cash at taxpayer expense.

    They are owned by the college/university, an entity that has tax exempt status, that pays out high salaries to coaches and the administrators of the facility. There's plenty of boatload going on.

    http://www.usatoday.com/story/sports/ncaaf/2012/11/19/ncaa-college-football-head-coach-salary-database/1715543/

    http://chicago.cbslocal.com/2013/03/25/students-squeezed-for-higher-college-tuition-as-administrative-salaries-rise/

    So we are supposed to make this assumption about ALL sports teams based on the Miami Dolphins??? :confused::confused:
    But keep your focus on food stamp fraud cause that's where the funny is

    Fraud is different than what is currently legal is it not?

    You really shouldn't be this angry over a playground. It's time to move on. :p
  • So giving money to GM is wrong but giving subsidies to "float the local economy" around stadiums is ok. Picking winners and losers?
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,495 Senior Member
    greenman wrote: »
    So giving money to GM is wrong but giving subsidies to "float the local economy" around stadiums is ok. Picking winners and losers?

    We the taxpayers have lost $15 billion on GM so far. What have we lost on stadiums and sports?
  • Here's a nice little cartoon to explains it all.

    deadspin.com/5964116/animated-infographic-watch-as-americas-stadiums-pile-up-on-the-backs-of-taxpayers

    These 186 stadiums cost $53.0 billion in 2012 dollars, of which $32.2 billion—or 61 percent—was publicly financed. That's a shitload of taxpayer money.
  • greenman wrote: »
    A study by the University of Minnesota on the Vikings-Cowboys playoff game in January 2010 found that non-metro game attendees spend nearly $6 million in restaurants, hotels, retail stores and on transportation in the Twin Cities per Vikings game. (So what. Wouldn't they still spend money if the owners paid for their own stadiums? Are we picking winners and losers? )

    Not if the Vikings were moved to L.A. or Vegas.

    Let's think about this, are the good people of the state of Minnesota getting ripped off?

    Suppose this was a 30 year amortizing mortgage. Each year, the state will get $20 million from the Vikes. For the sake of this calcuation, I'm going to assume the state gets a total of $1 million from the 8 visiting teams not $1 million per each team that visits (this is unclear from the website, I think). Visiting fans bring in another $3.3 million per year in state sales tax (I'll ignore local Minneapolis tax and state income taxes). Solving for the interest rate that amortizes a $400 million loan with an annual payment schedule of $24.3 million over 30 years gives a 4.4% annual return. That's better than today's Treasury rates.

    Let's add in some inflation and assume tax revenues go up 1.5% per year (I think this is reasonable). Minnesota's effective yield is now 5.85%. I do this deal.

    Since I know I will be accused of defending the rich, I want to make it clear I'm not. I'm defending the state of Minnesota's decision to make this deal.

    It does occur to me that the best thing, in my memory, to happen to NFL owners is the Rams move from L.A. to St. Louis. If I'm in NFL ownership, I never allow an expansion team to come in to L.A. so I can continue to threaten that I might move to L.A.
  • greenman wrote: »
    I found this article really funny a real knee slapper this one is.

    Those estimates are based on what the Treasury could have collected on interest from the same amount of taxable bonds sold at the same time to investors in the 25 percent income-tax bracket, the rate many government agencies assume. In fact, more than half the owners of tax-exempt bonds pay top rates of at least 30 percent, according to the Congressional Budget Office. So they save even more on their income taxes, a system that U.S. lawmakers of both parties and President Barack Obama have described as inefficient and unfair.

    Strikes me as a very big assumption that the majority of these monies would go into taxable bonds.
  • BuffcoBuffco Senior Member Posts: 10,586 Senior Member
    How is GM coming into this argument?

    They weren't simply "given" subsidies, were they?
  • Using the taxpayer funds to pick winners and losers. Why should the tax payers be helping out any private multibillion dollar organization? Who threaten you if you don't help them?
  • If the taxpayers are getting a good deal, as I describe, why shouldn't they want to? Better return than on Solyndra (too good to pass up this shot) and some of the other green investments.
  • Buffco wrote: »
    How is GM coming into this argument?

    They weren't simply "given" subsidies, were they?


    The state is going to fund half the cost of the stadium over $400.00 million.
  • creekguycreekguy Senior Member Posts: 4,000 Senior Member
    Trying to put professional (including college FB and roundball) sports into a logical framework is kinda pointless. It is an irrational element of regional pride and the madness of crowds that cannot be justified in practical terms. That greedy elements exploit it is no surprise, but I don't waste time complaining because it isn't going to change. You know, the Broncos stadium was essentially a gift from the tax payers to owner Pat Bowlen, who was already rich; people seem happy to have done it. Ayn Rand would approve.

    I can't wait for Eagles at Broncos; that dog-strangling sucka is in for a bad day. And I will feel better about myself in the days after.
  • Steven wrote: »
    If the taxpayers are getting a good deal, as I describe, why shouldn't they want to? Better return than on Solyndra (too good to pass up this shot) and some of the other green investments.

    Conclusion

    In the last 20 years, billions of public and private dollars have been spent building sports stadiums across the United States. Proponents of a new stadium often cite economic development benefits that will be associated with the new stadium. Academic economists have not found statistically significant relationships between various measures of economic growth and stadium construction. The academic studies probably better capture the effects of a stadium because they are not subject to a number of errors that often occur in the economic development assessments done by pro-stadium advocates. However, throwing out the economic development argument does not necessarily lead to rejecting public spending on stadiums. Quality of life arguments may justify public subsidizing a sports facility.
    http://www.imakenews.com/cppa/e_article001083889.cfm


    http://kansascityfed.com/Publicat/Econrev/PDF/1q01rapp.pdf


    So it boils down to quality of life issues says one article. Certainly doesn't hurt the quality of life of the owner of the Vikings who will sell his team for a nice profit after the tax payers build him a nice new stadium for a losing team.
  • Can the Costs and Benefits be Measured?
    Often franchises or local chambers of commerce hire economic consulting firms to estimate the economic
    benefit to a metropolitan area. These studies tend to find positive benefits in terms of the jobs created:
    personal income increases and tax revenue growth associated with the construction and operation of the new
    stadium. In response to the recent growth in public subsidies of sports stadiums, many independent,
    academic economists have also studied the effect on economic growth. The academic literature on the
    economic benefits of sports stadiums concludes that there is no economic growth associated with professional
    sports franchises and stadiums.
    5-12
    Because of the preponderance of evidence against the economic development argument, more recent
    stadium requests by franchises have focused on the quality of life arguments to justify public expenditure.
    6
    The quality of life justifications have not been subject to academic scrutiny, likely because they are extremely
    difficult to measure. There is no reason to assume that the quality of life outcomes are not large enough to
    justify the public expenditure.
  • The Federal Reserve Bank of St. Louis confirms NO ECONOMIC BENEFITS from sports arenas. Summary of the study can be found here.
    http://www.stlouisfed.org/publications/re/articles/?id=468

    http://pundithouse.com/2013/03/sports-subsidies-generally-a-bad-idea/
  • But keep your focus on $14.00 muffins and food stamp cheats. The volk at Fox and the politicians of both parties are countin on it.
  • greenman wrote: »
    Can the Costs and Benefits be Measured?
    Often franchises or local chambers of commerce hire economic consulting firms to estimate the economic
    benefit to a metropolitan area. These studies tend to find positive benefits in terms of the jobs created:
    personal income increases and tax revenue growth associated with the construction and operation of the new
    stadium. In response to the recent growth in public subsidies of sports stadiums, many independent,
    academic economists have also studied the effect on economic growth. The academic literature on the
    economic benefits of sports stadiums concludes that there is no economic growth associated with professional
    sports franchises and stadiums.
    5-12
    Because of the preponderance of evidence against the economic development argument, more recent
    stadium requests by franchises have focused on the quality of life arguments to justify public expenditure.
    6
    The quality of life justifications have not been subject to academic scrutiny, likely because they are extremely
    difficult to measure. There is no reason to assume that the quality of life outcomes are not large enough to
    justify the public expenditure.

    What does this have to do with the price of tea in China? I just showed you how Minnesota could justify spending $400 million on a new stadium with neither a single new job being created nor one iota of quality of life improved.
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,495 Senior Member
    Greenie is still mad about the playground. He's taking his football and going home. :D
  • greenman wrote: »
    But keep your focus on $14.00 muffins and food stamp cheats. The volk at Fox and the politicians of both parties are countin on it.

    Do you even know what this word means? Biegler started this ridiculous crusade, but you seemed to have picked it up.

    (hint: it has nothing to do with Faux news, fascism, teabaggers, gopers, or any other object of your affection)

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