Kyle Wingfield, a columnist for the Atlanta Journal-Constitution, discusses why many Atlantans are currently focused on the corporate welfare for the Atlanta Braves and their new stadium, they should also look at what’s happening inside the Federal Reserve. Is this the largest corporate welfare deal in American history?
Corporate welfare is on many Atlantans’ minds following Monday’s announcement the Braves plan to move to a new stadium in Cobb County at least partly financed by taxpayer dollars. Here’s your periodic reminder governments’ giveaways to private businesses often come in much larger amounts.
The Atlanta Falcons are a bad football team this year; they’ve won two of their seven games, so far. However, equally bad is the revised estimate for the cost of the new stadium being built for the team — about $200 million bad. This Columbus Ledger Enquirer op-ed has all of the details:
The team in the Atlanta Falcons’ corporate offices and the one down on the Georgia Dome turf need to coordinate their timing better. Because together they’re giving us some of the worst PR since the Big Three automakers took separate company jets to Washington to plead for hundreds of billions in corporate welfare.
Ilya Somin at the Volokh Conspiracy writes about the astounding fact that even though Detroit is in bankruptcy, they are still moving forward with a plan to spend $400 million on sports stadiums:
I’m a big hockey fan and even used to play myself (not that I was any good). And, unlike many other Detroit institutions, the Red Wings have been very successful in recent years. Nonetheless, this massive stadium subsidy is utterly indefensible. Studies by a wide range of economists have repeatedly shown that stadium subsidies do not yield economic benefits for the wider communities where they are located.This recent book by political scientist David Schultz has a helpful survey of the evidence. Moreover, this kind of corporate welfare for powerful business interests is exactly the sort of wasteful crony capitalism that played a major role in Detroit’s decline in the first place. If you’ve dug yourself into a deep hole, you’re unlikely to get out by digging even deeper.
Sandhya Somashekhar and Lenny Bernstien from the Washington Post discuss the current administration’s attempt to have sports organizations promote the new healthcare laws. After several members of Congress wrote to the NFL and warned them about the risks associated with promoting such a controversial policy, NFL decided to withdraw their support.
…leaders in the Senate issued a stern warning to sports organizations not to partner with the White House on an issue marked by such “divisiveness and persistent unpopularity.”
Asked about the congressional letter, NFL spokesman Greg Aiello said the league had not made any commitment to the administration.
“We have responded to the letters we received from members of Congress to inform them we currently have no plans to engage in this area and have had no substantive contact with the administration about [the health-care law’s] implementation.”
Michael Nolan at FEE writes about how cronyism is involved in the funding of new stadiums, and also how there have been some positive signs of people pushing back against these crony deals.
For years, taxpayers have been shaken down for money to build ever-fancier stadiums for professional sports teams. It’s probably not the most expensive example of cronyism out there. But since it forces everyone to set up tidy little business-and-vanity ventures for guys who are already rich, it’s among the most egregious.
According to Deadspin, 78 stadiums were built from 1991 to 2004, at a cost of $85 billion. Taxpayers are on the hook for 61 percent of that.
Daniel C. Vock writes for Stateline about the fact that NFL teams, and the stadiums they use, are often receiving substantial subsidies from local and state governments:
Yes, after a timeout for the recession, the National Football League is back in the game of getting public money to pay for better stadiums. In many cases, teams want to replace or renovate stadiums finished during a 1990s sports construction boom.
“We had a real lull from the beginning of the Great Recession,” said Victor Matheson, an economics professor at Holy Cross who studies sports. “Just in the last year, however, we’ve seen the tide turn… We have a little bit of a backlog, so you’re seeing a bunch of stadiums on the table now.”
Matthew Mitchell and Christopher Koopman of the Mercatus Center wrote an article in US News about the tax preferences that benefits college athletic programs:
So why do politicians continue to hand out these privileges? One answer is that sports teams are well-connected and well-organized, giving them an inherent lobbying advantage over a multitude of unorganized taxpayers. Another explanation is that people love sports – especially their home team – and politicians are eager to associate themselves with anything popular.
This same explanation accounts for why politicians have gone out of their way in recent years to privilege another popular industry: Film production. The vast majority of states now offer a spate of tax credits, exemptions, and subsidies to production companies that film on location.
John F Trent writes at the FreedomWorks blog about recent sports cronyism in Virginia, and offers their solution instead.
Instead of fostering an environment of corporate handouts, government should instead offer a different type of incentive as an alternative to providing direct cash infusion. Government should lower taxes and regulations for businesses to begin construction, as well as make it easier to obtain the proper permits and zoning licenses. By fostering a business-friendly environment, businesses will begin to relocate to those areas without direct incentives from government.
Jim Morrill at the Charlotte Observer writes about a piece of legislation in North Carolina that would use public money to fund a professional sports team.
The bi-partisan bill would allow the city of Charlotte to use local taxes earmarked for the convention center to help upgrade Bank of America Stadium…
“There are a lot of people in the state who have a problem with what is happening in professional sports, the NFL in particular,” said Rep. Bert Jones, a Reidsville Republican. “The NFL is big money, let’s face it.”
Rep. Paul Luebke, a liberal Democrat from Durham, called the bill “corporate welfare.”
“This is welfare for a major, profitable corporation,” he said.
A story in the NY Post discussed how a new deal with the Buffalo Bills gives the state an entire luxury suite.
[It] turns out that the state now has an arrangement with the Buffalo Bills for a whole luxury suite. It’s described in documents as the I ♥ NY Hospitality Center, and it will be used by the Empire State Development Corp. to wine and dine potential investors.
The luxury box is one small part of a corporate-welfare deal meant to keep the Bills in upstate New York. Under this agreement, the state will pay roughly $54 million to finance upgrades for Ralph Wilson Stadium, which is owned by Erie County. The taxpayers of Erie will cough up another $41 million.