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October 21, 2010
Dolphins roof tax demand: It's back!
This may be a terrible time to raise private money for a new football stadium, but apparently it's never a bad time to ask for public funds:
It may not be a blitz yet, but the Miami Dolphins have started a political ground game to fund a massive stadium redo with public dollars.
The team confirmed this week it hired a polling firm to gauge support in Miami-Dade for improving the stadium -- work the team says is needed to make the venue more appealing to large events such as the Super Bowl and World Cup soccer.
This is a revival of the $250 million renovation plan Dolphins execs floated in January, then unfloated in March once local hotel owners balked at funding the plan with a hike in the hotel tax. There's no indication yet where the public money would now come from or how much would be needed, but apparently the umbrella is still in play, albeit really grainy.
So far, the revived Dolphins campaign seems mostly limited to meeting with local elected officials and telephone push polls to convince Miami citizens of the need to put their tax money into a privately owned and operated facility. According to the Miami Herald:
Michelle Niemeyer, a Miami lawyer and member of the Cocoanut Grove Village Council, said she was polled in late September on the question of public dollars and the Dolphins' stadium. Niemeyer said the caller's script seemed designed to persuade her that spending taxes on the facility was a good idea.
"I was informed at one point that the owner of the Dolphins has paid 100 percent of the cost of the stadium and then [I was] asked something like, 'Do you believe that's fair when most stadiums around the country are supported at least in part by tax dollars?'" Niemeyer wrote in an e-mail. "I know they pointed out that the source of funding would be the tourist tax and that it wouldn't decrease funding for services."
I'm just getting so tired of using hotel taxes and cab taxes to fund, well, anything. It's going to get to the point where people won't go to... Well, wherever it is tourists go (SF, LA, Seattle, Miami, NYC, and on and on) if these "taxes on other people" are up around 25%.
"Sure! I don't mind spending an additional $15/night if it means {some city} gets to retain {some team}!".
That will eventually backfire, and I think in some areas, it would completely destroy any level of tourism.
Where I live, Sacramento, the tourist industry is already sub-marginal. So when I hear people occasionally float hotel taxes to fund an arena, that just sounds like economic suicide to me.
MAYBE they can sorta get away with it in NYC, Seattle and SF. MAYBE. But there is a breaking point. Eventually, even Las Vegas won't get away with it. Vegas is probably a great example because of the way they've already cratered, and they're looking to build an arena with hotel taxes. That won't work.
Posted by MikeM on October 21, 2010 01:17 PM
I agree, Mike.
Perhaps the greatest lie involved in such funding schemes is that "tourists" pay, not residents. The more that these types of funding programs are employed, of course, the more 'others' pay. Unless you spend your entire life in one city, you will pay for someone else's stadium, and they will pay for your club owner's. It's also incorrect for clubs to suggest that their travelling audience will pay the taxes, since travel of any kind to a destination generates the tax. People coming for work, conventions, or just to play golf will pay for the new facility. Even someone travelling to protest the transfer of wealth from relatively poor taxpayers to very rich franchise owners will contribute...
Furthermore, since a high percentage of hotel stays are business related, employers tend to pay a disproportionate amount of these surtaxes. And since business taxes paid are all deductible... that is money that doesn't then flow into state or federal coffers as corporate tax.
Redistribution of wealth is tricky, as the Monty Python sketch advises...
Lupins!
I forget where the study was (somewhere in Texas, I want to say), but at least one city found that the majority of car rentals were made by local citizens, not tourists.
And, of course, there's also the point that tax money is fungible, and once you raise hotel taxes to the breaking point, that's a revenue stream you can never tap for anything else.
Posted by Neil on October 21, 2010 03:59 PM
tourists and locals - HIDE YOUR WALLETS !!
Posted by paul w. on October 22, 2010 12:22 PM
There is no single answer for this issue. Whether or not it is a good idea depends upon to local economic philosophy. If a city or other political area is truly a destination city that depends upon revenue from entertainment, then using room taxes to increase the available attractions may be a good idea; at least until that maqical "when is too much too much" cap (25%? 30%?)is reached. If the area depends upon value pricing to attract corporate conferences that city needs to avoid additional hospitality taxes. This would be true for second tier cities and major cities that depend upon the convention and meetings industry. The problem is that some cities have not decided honestly what their financial philospohy is. Also, powerful forces with investments at stake may ignore what is good for their city.
Posted by Jim Monroe on October 23, 2010 09:41 AM
I see your point, Jim, but it seems hard to imagine that that many more people are going to visit Miami just because its football stadium has a roof. (Especially when NFL games are usually sellouts already. Or used to be, anyway.) They might pay more to see a game there, but that only helps the Dolphins, not the rest of the local economy.
Posted by Neil on October 23, 2010 09:46 AM