Bill to outlaw tax-exempt stadium bonds still wouldn’t end all subsidies, c’mon Darren Rovell

Oh, Darren!!!

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.


4 comments on “Bill to outlaw tax-exempt stadium bonds still wouldn’t end all subsidies, c’mon Darren Rovell

  1. One of life’s great mysteries is how Rovell escaped the ESPN layoffs. Unless he actually was laid off and just hasn’t figured it out yet.

  2. Interesting article by Hruby. I enjoyed the original Rolnick and Burstein proposal info as well.

    But I think we all know many ways that the sports stadium welfare for billionaires game could be stopped. The reason the 100% subsidy tax won’t be applied to sports businesses is the same reason it doesn’t work for states luring other types of businesses (some of which might actually produce some economic benefits for the state, unlike inducements to what are by definition businesses which rely on discretionary spending – entertainment businesses).

    What we lack is not a plan to end this madness. That part is easy. We lack the will to say no.

  3. It sounds good to me, but possibly I do not fully understand. Using tax dollars and tax privileges to subsidize stadiums while more critical public issues are unmet should have been illegal a long time ago. I think part of the problem is how it ties into the federal tax code. If Alabama or Ohio or California colleges or professional sports teams build more stadiums than in other states, then other states and taxpayers are essentially subsidizing their poor priorities through deficit spending and their own taxes. I think the changes have to be started at the federal level. Same true for paying college coaches multimillion dollar salaries and buyouts through tax deductible donations and laundered through a tax exempt non-profit education institution. While we are at, why should feeding business fatcats with tax deductible business meals be a deductible business expense or second vacation homes get mortgage interest deduction. The root of all our corruption seems to start with the tax code. It is worth a try or a start, to me.

Leave a Reply

Your email address will not be published. Required fields are marked *.
NOTE: Personal attacks on other commenters are not allowed in comments, and will be deleted.

HTML tags are not allowed.

735,917 Spambots Blocked by Simple Comments