Yesterday, the Chicago News Cooperative reported that the Illinois state fund that’s paying off the construction of the White Sox‘ U.S. Cellular Field and the reconstruction of the Bears‘ Soldier Field is running short of funds, and will need to be bailed out by city taxpayers. With the hotel tax revenues designated for stadium expenses coming in below projections, the state has withheld $1.1 million in income tax money that would normally go to the city of Chicago.
Today, the News Coop (or as I prefer to think of it after misreading its URL for the umpteenth time, the New Scoop) says that thanks to an “accounting error,” the hit to city taxpayers this year was actually only $185,000. That’s the good news. The bad is that even if hotel tax revenues rebound, the state sports authority’s annual debt payments are scheduled to rise from $30 million to $88.5 million over the next two decades, leading authority board member Jim Reynolds to warn that “the city has to begin to plan for some significant outlays.”
On one level, this isn’t actually a huge buy lorazepam in the uk deal — as with recent tax squabbles in Miami and Cincinnati, taxpayers were going to be on the hook for these costs regardless, so it’s just a matter of which taxpayers, city or state. And Chicago has been kicking in $5 million a year toward the stadium costs in any case, so this just adds marginally to the bill.
Still, it’s a reminder that assigning a certain tax revenue stream to pay off stadiums — or really, to pay off anything — is in the end a bookkeeping abstraction: If the tax money doesn’t come in, you still have to make the payments, the same as if you buy a new car and plan to pay for it with the raise you’re expecting, and then the raise never materializes. (Note to younger readers: “Raises” and “new cars” were well-known before 2008; ask your parents.) In the end, public costs are public costs, and pretending they’re not because somebody else (hotel guests, car renters, cigarette smokers, racino patrons) has had their taxes earmarked for them is just sophistry.