If you were wanting more explanation of why President Obama’s plan to eliminate tax-exempt bonds for stadium projects won’t be close to enough to end stadium subsidies entirely, beyond what I wrote here on Tuesday, you’re welcome to read my longer piece at Vice Sports yesterday, which explains not just why … that thing I just wrote earlier in this sentence, but what options Washington has that could actually shut down taxpayer stadium giveaways. (No, I’m not going to tell you here, that would be a spoiler. Go click on it. Really, now. Please?)

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.

This is potentially huge, except it’s an Obama budget proposal and so will never get through this Congress, but still: Obama’s 2015 budget includes a provision that would change the rules for how tax-exempt bonds are issued that would, once and for all, eliminate the loophole that has allowed sports stadiums to get a giant federal tax break for nearly 30 years.

How it works: The 1986 Tax Reform Act introduced a provision limiting the use of tax-exempt bonds — which are cheaper for cities to pay off because bond buyers don’t have to pay taxes on their earnings, and so are willing to accept lower interest rates — to bonds being sold for public uses: think parks and libraries, anything that doesn’t actually bring in enough revenue to pay for construction costs. Eligibility was determined by a two-fold “private activity” test: If a project was going to be used more than 10% of the time for private uses, and more than 10% of the cost was going to be paid off by means other than “generally applicable taxes” (i.e., any kind of special payments, whether called taxes or not), then tax-exempt bonds were disallowed.

Since stadiums and arenas are almost by definition used for private events more than 10% of the time, sports team owners immediately made sure that they wouldn’t get caught in this trap by focusing on the other test, and ensuring that at least 90% of bond costs would be paid off by generally applicable taxes. This required jumping through some fancy hoops at times — sometimes dividing up bond issuances into one publicly paid tax-exempt set and one privately paid taxable set, sometimes pretending that private rent payments are really tax payments and convincing the IRS to go along with it — but has consistently worked out over the years, so far costing taxpayers $4 billion in foregone tax revenue.

The Obama proposal would slam the loophole shut by getting rid of the generally applicable tax test altogether, and simply ruling that any building used more than 10% by a private entity is a private use, and no tax-exempt bonds for you. This, as bond expert Dennis Zimmerman (who testified before Congress in 2007 about the tax-exempt bond problem, alongside me, Heywood Sanders, and others) told ThinkProgress’s Travis Waldron, is an ideal way to eliminate this loophole:

“Perfect. You couldn’t do it any better if you believe like I do that we should not finance these things with tax-exempt debt,” said Dennis Zimmerman, a retired economist who worked for the Congressional Research Service and Congressional Budget Office and now serves as the director of projects for the American Tax Policy Institute. In a 1996 paper for CRS and in other publications, Zimmerman examined the tax exemption on government bonds used for sports facilities and recommended eliminating it….

“Cities can still pay for stadiums,” Zimmerman said. “But there would be no federal subsidy paying part of the interest cost. That’s what’s at stake here: it’s will the federal government pay a share of the interest costs?”

The new rules would go into effect for any bonds issued after the end of this year, which the White House estimates would save the government about $54 million a year, though how they know how many stadium bonds are going to be issued in future years is anybody’s guess. In any event, there’s a good chance that Congressional Republicans will kill this provision in budget talks — though some Republicans have reportedly been willing to rein in tax-exempt bonds in the past, so you never know.

If Congress ever does agree to close the tax-exempt bond loophole, of course, it wouldn’t stop cities from funding stadiums — but it would make it more expensive, hopefully causing local elected officials to require private owners to carry more of the debt burden. (It would also eliminate the incentive for governments to finance bigger shares of stadium debt, in order to get under that 10% private-funding cap.) Of course, it’s always possible that cities would just respond by covering the extra interest payments out of their own pockets, but one battle at a time.

Anyway, go read Waldron’s article, which is excellent. And then make a note to closely follow any upcoming budget reconciliation talks. Like you weren’t already, right.

There’s more talk again today that Congress may get rid of tax-exempt municipal bonds, which are one of the main subsidies that the government provides to not just sports stadiums but all local development projects. (Short version: The IRS doesn’t collect income tax on money earned by bondholders, allowing them to accept lower interest rates, allowing cities to borrow money to build stuff for cheaper than they would otherwise.) This time it’s the Tampa Tribune speculating that the federal government may get rid of the tax exemption during upcoming debt ceiling talks, but it’s a topic that been kicking around elsewhere of late, as apparently nothing is off the table when it comes to filling the budget gap that Washington is suddenly obsessed over.

This would almost certainly be a good thing all around, as tax-exempt bonds have been abused for decades as a way for local governments to fob off costs to federal taxpayers, not just for genuine public projects but for private entities like sports teams. (Stadiums were supposed to be exempted by the 1986 Tax Reform Act, but sports teams found a way around it. A bunch of ways, actually.) If the feds really want to help local governments build parks and libraries, they can just give them cash; tax-exempt bonds are a backdoor way of doing the same thing that’s ripe for abuses, especially since it obscures the subsidy and makes it harder for the public to see what’s actually getting taxpayer dollars.

It’s still pretty unlikely that anything will change — we heard this same talk before the fiscal cliff negotiations, after all, and nothing came of it. And lobbyists for bond companies and local governments alike are already gearing up to fight any attempt to eliminate or reduce the tax break. Still, if something does happen, it would dramatically increase the cost of sports facilities and shake up current construction plans across the nation, so it’s worth keeping an eye on.

Well, this is kind of interesting. Apparently, as part of the talks in Washington to reduce the deficit and avoid the “fiscal cliff” (which isn’t really a cliff, but that’s an issue for another time), consideration is being given to reducing or eliminating the tax-exemptness of tax-exempt municipal bonds, which are only one of the key government subsidies driving the last 25 years of stadium building, something that Congress was concerned enough about to actually take the extreme measure of asking me to testify about it.

Tax-exempt bonds are one of the more abstruse elements of the stadium-subsidy game, but in a nutshell, here’s how they work: A city government wants to sell bonds to fund a big construction project. The IRS says, “Hey, you’re a city government, you deserve a break. How about we don’t charge bondholders any taxes on the money they make on the bonds?” The city responds, “Cool! If bondholders don’t have to pay taxes, they’ll accept a lower interest rate! And that saves us money!” And everybody goes home happy, except for the federal government, which is suddenly out a lot of tax money — to the tune of $146 million a year. (State and local governments take a hit as well, but given that state and local income tax rates are usually pretty low by comparison, it’s a vastly smaller one.)

Now, tax-exempt muni bonds are used for all sorts of other things — parks, libraries, stuff like that with an actual public purpose — that would also suddenly become more expensive to build if the tax break suddenly evaporated. But it is interesting that a stadium tax loophole that many people have been complaining about ever since it was accidentally enshrined into law in 1986, but haven’t been able to do much about, is suddenly on the table thanks to a completely unrelated fake crisis. Given the lobbying power of both local legislators and developers, probably nothing will come of it, but it bears watching nonetheless.

“In Stadium Building Spree, U.S. Taxpayers Lose $4 Billion” is the headline in today’s BloombergBusinessweek, which is one of those headlines that leaves more questions than it answers. Stadium building spree over how long? Lose $4 billion over how long? Is that how much money the public is putting out, how much it’s putting out without getting back, what?

None of the above, it turns out. The $4 billion figure is actually total tax revenues lost to the federal government because of the use of tax-exempt bonds on sports facilities, according to Businessweek. Since 1986, $17 billion in tax-exempt bonds have been issued for stadiums and arenas, they report, costing the U.S. Treasury $146 million a year, or a total of $4 billion by the year 2047.

But, of course, tax-exempt bonds are usually only a small part of stadium subsidies, as most buildings also get other tax revenue, property tax breaks, and the like to pay off their construction debt. There’s no good summary of how much all this amounts to — at least not until Judith Grant Long finishes writing her damn book, hint hint — but counting minor-league stadiums and hidden subsidies, it almost certainly amounts to more than $1 billion a year.

Still, knowing that the U.S. Treasury is out $146 million a year solely from the use of tax-exempt bonds for stadiums — something that Congress tried to eliminate in 1986, but ended up leaving a giant loophole in — will come in handy for testimony next time Congress holds one of these. Not that I’m holding my breath.