So USA Today ran an article yesterday about the Obama plan to outlaw the use of tax-exempt bonds for sports stadiums, the proposal that was floated back in early February and covered here (and elsewhere) then. The article blew up all over social media, though, and you know how come? Clickbaity headlines, that’s how come:
Is Obama proposal the end of taxpayer-subsidized sports stadiums?
The answer: NO. Ian Betteridge, come collect your royalty check.
I’m not going to go over this all again (click the second link above for the full story), but the basics of this are: The Obama plan, which faces uncertain at best passage in a Republican Congress, would force sports team owners to use taxable bonds for stadium projects, rather than having cities sell federally tax-exempt bonds. This would close a major loophole that’s been allowing teams and cities to push off a portion of stadium costs onto the federal government — no more Red Sox fans having to help subsidize a new stadium for the Yankees! — and save the feds a few hundred million dollars in coming years. But taxable bonds work just as well for stadiums as tax-exempt ones; they’re just more expensive (by about a point and a half of interest, if I remember right), meaning teams and cities would just need to figure out how to raise more money to pay them off.
Now, is it possible that once federal subsidies are no longer available, more cities and teams will look at stadium and arena price tags and go, “Hell with that, let’s just stay in the old place”? Sure, maybe. But the Obama plan would be at best a moderate speed bump to stadium subsidies, not an actual roadblock.