Darren Rovell, ESPN Senior Writer
A group of politicians who are tired of taxpayer money being used to build sports stadiums on Tuesday will introduce a bill in the Senate to prohibit the practice.
Darren, Darren, Darren. You know that’s not what the bill would do. You say it in your very next paragraph: “Cory Booker, D-N.J., and James Lankford, R-Okla., are sponsoring a bill that would prohibit teams from using municipal bonds, whose interest is exempt from federal taxes, to help finance stadium construction.” (Actually only tax-free municipal bonds, but close enough.) So why do you perpetuate the myth that ending the use of tax-exempt bonds for stadiums would stop all sports subsidies, any more than it did when President Obama tried it two years ago?
If you want a good writeup of what the Booker-Lankford bill does and doesn’t mean, hie thee to Vice Sports, where my friend/editor (freditor?) Patrick Hruby lays it all out for you, including:
- The $3.7 billion that the Brookings Institution calculates tax-exempt stadium bonds has cost the federal government since 2000. (Darren has this at $3.2 billion, which is what’s in Booker’s press release, but that’s just the amount of benefits that stadiums have received; $3.7 billion is the amount it’s cost taxpayers because some of the money just ends up in the pockets of bond buyers.)
- This has been proposed before and gone nowhere, and it’s likely to fail again (though bipartisan sponsorship is nice, I guess).
- “Booker and Lankford acknowledge that their bill won’t prevent localities and states from smashing the public piggy bank to pay for sports stadiums; in fact, they all but brag that local governments will be allowed to finance future stadium subsidies with ticket and in-stadium purchase taxes.” This is an apparent reference to a clause that would allow using targeted sales taxes on in-stadium purchases to pay off stadium costs, which Booker and Lankford seem to think they can’t do now — or maybe it would just allow cities to use targeted sales taxes to pay off tax-exempt bonds, which indeed they can’t do now thanks to the “generally applicable taxes” test. Except that if tax-exempt bonds can’t be used for stadiums at all anymore … clearly I need to find and read the actual legislation.
For more on the history of tax-exempt stadium bond ruless and how they became a money pit for federal taxpayers despite being intended to do the exact opposite, see my Vice Sports article from two years back. And while you’re reading up, check out Hruby’s article from last week on the “Death Star” federal tax proposal that would actually shut down stadium subsidies once and for all, if only anybody would seriously consider it.