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Taxpayers grumpy about funding professional sports stadiums

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Ed Zurga/AP

(Read caption) Minnesota Vikings wide receiver Percy Harvin (12) runs in the fourth period of an NFL football game against the Kansas City Chiefs in Kansas City, Mo. The Vikings are facing taxpayer opposition to a plan for a new stadium.

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One of the benefits of the present depression is the fact that the voters are grumpier than usual. It’s hard to care about your carbon footprint when you don’t have a job, and it’s now even possible to criticize the federal reserve without being deemed insane. Yet now, even the most hallowed government-corporate scheme of all, taxpayer-funded sports facilities, are under attack.

The New York Times reported on Tuesday that the Minnesota Vikings are facing opposition to the latest plan for a massive-taxpayer funded stadium.

To their credit, the Vikings have been so far avoiding the making of threats to leave town if they don’t get their way. The usual narrative is this:

Billionaire team owners: We wanna new stadium!
Taxpayers: Well, I dunno, I can barely afford to pay my bills.
Billionaire team owners: Give us what we want or the local economy will implode. Do it now!
Government representatives (to taxpayers): Approve this tax increase now, or I won’t look as hip and cool at the next National League of Cities meeting.
Taxpayers: Gee, I don’t want to destroy the local economy. OK.

The end result is that, yet again, the politically-well-connected wealthy once again enrich themselves at the expense of the middle-class taxpayer.

One of the masters of this was George Steinbrenner, who made a long career out of fleecing the taxpayer to make his Yankee empire more profitable (for him). Amazingly, when Steinbrenner died last year, he was hailed as an free-market entrepreneur. He was an entrepreneur of sorts, of course. He was quite entrepreneurial at using the political system to transfer funds from taxpayers to his pockets.

Raymond Keating at the Colorado Springs Business Journal wrote one of the more insightful columns on the Streinbrenner method of wealth creation:

While George Steinbrenner made Yankee fans very happy with seven World Series victories during his ownership tenure (with the two next closest teams, the Cincinnati Reds and Oakland A’s, winning three each), that does not mean he was a free-market, entrepreneurial capitalist.

Why? Steinbrenner was on the government dole. He received, benefited from and lobbied for handouts from the taxpayers. I speak, of course, about Yankee Stadium.

During the 1974 and 1975 seasons, the Yankees played in Shea Stadium while the original Yankee Stadium was gutted and rebuilt. The taxpayers picked up the tab, which was originally estimated at $24 million but ballooned to more than $113 million. Yet, by the late 1980s, the brazen Steinbrenner was lobbying for a new ballpark.

He got his wish when Yankee Stadium III opened in 2009. Often billed as being privately funded, nothing could be further from the truth. The New York City Independent Budget Office put the public costs at $855 million of a widely reported $1.5 billion total cost. But Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit, put the total cost of the Yankee Stadium project at $2.3 billion, with the taxpayer share at $1.2 billion. That’s still not the full picture, though, as the Yankees’ PILOTS (payments in lieu of taxes) to New York City are used to pay off the tax-exempt bonds used to construct the ballpark. In effect, the Yankees’ de facto property taxes pay off the team’s mortgage. Few businesses get such a sweetheart deal.

The late Edmund Opitz explained in The Freeman magazine many years ago that once a business accepts a government handout, “it is no longer a business; it’s a hybrid which deserves criticism as an unethical aid on the public treasury.” He continued: “A businessman per se operates within the framework of rules laid down by ‘the market’; when he operates outside this framework, and by a different set of rules, he is something other than a businessman.” Indeed, he becomes a ward of the state.

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And this tradition continues with the Vikings of course, although unlike the Yankees, the Vikings are a lousy team.

None of this necessarily implies, however, that professional sports themselves couldn’t flourish without taxpayer support. The larger problem is that the taxpayers and the government officials who help swindle them, seem to actually buy the mercantilist philosophy behind the modern idea of “Economic Development” which is that growth in local economies depend on taxpayer subsidies and sweetheart deals for private corporations. The mere suggestion that the economy should be allowed to grow freely and on a level playing field is met with absolute disdain from Chambers of Commerce and local government officials in every corner of the country.

“Why, if we didn’t subsidize big business,” they say, “why would anyone ever start a business here?” Lower taxes and fewer regulations might be a good start, of course, but see how far that gets you with the city council.


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