Two days after New York Gov. Kathy Hochul’s announcement of a plan to give at least $1 billion in state and county money to Buffalo Bills owners Kim and Terry Pegula for a new stadium — the biggest NFL stadium subsidy in history — some state lawmakers have started speaking out against the proposal:
- In a press conference yesterday morning organized by subsidy-watch groups that I took part in, state Sen. Liz Krueger, Democratic chair of the Senate Finance Committee, called Hochul’s plan, which still lacks such details as an actual lease or even a publicly revealed term sheet, “a terrible way to use the taxpayers’ money. And fine, we can all fight about the good or bad of it, if we actually know what the hell’s going on, but we don’t. And so I am just frustrated beyond belief today.”
- On the same call, Democratic state assemblymember Ron Kim called the Bills stadium plan a giant scam” and “a horrible deal for the state of New York,” and called for the state to “once and for all end these sweetheart deals that are disguised as economic development, but it’s really just corporate giveaways for billionaires.”
- Elsewhere, state Sen. Mike Martucci, a Republican from the Hudson Valley, said, “I like the Bills as much as anyone, but this is outrageous. Republicans are often criticized for being buddies with billionaires. What would you call this?”
- U.S. Rep. Thomas Suozzi, who is running against Hochul in this June’s Democratic gubernatorial primary, called the plan “the biggest giveaway in NFL history” and declared, “We can build a stadium, but let’s have the billionaire pay, not the fans and taxpayers!” Suozzi also noted that Hochul’s husband, William Hochul, the attorney for Delaware North, the Bills’ concessionaire, raising conflict-of-interest issues.
That’s a decent core of bipartisan opposition, but notably missing are assembly speaker Carl Heastie and senate president Andrea Stewart-Cousins, neither of whom have publicly commented on Hochul’s plan. Assembly Majority Leader Crystal Peoples-Stokes — identified by the Associated Press in its article as “Senate Majority Leader,” sure, who needs copy editors? — praised the deal as a “once-in-a-generation opportunity for advancement.”
As Krueger pointed out, though, the way Hochul has chosen to present this, as a last-minute addition to the state budget, makes it far more unlikely that state legislators will raise a stink, even if some of them might want to:
“This is going to be rolled into one of the budget bills. And so, that’s how you do get things in without providing any information. And you depend on the fact that the legislator’s more concerned about having said no to funding its school system — if you throw it into the same bill with education or health care, you’ll get shot down [with] ‘She didn’t vote for public education, she didn’t vote for health care, fire her ass!’ … I personally think, no matter I find out or don’t find out, this is going through.”
Krueger also noted that “I just learned about an hour ago that they’re talking about $400 million for our racetrack on Long Island” — presumably this for upgrading Belmont Park now that it has the new New York Islanders arena as a neighbor — and “I’d like to know that before I get asked to vote on it, also.”
(Speaking of additional costs, University of Maryland economist Dennis Coates pointed out on the call that even the $350 million that the Pegulas are contributing to the $1.4 billion stadium project should arguably be considered part of the state’s share: “Is the money that they will get from selling the naming rights part of their contribution? Because is has been, in many many cases, that the state or the locality gives this to the team, and then the team sells it and counts it as part of their contribution. Frankly, I think that is the most ludicrous thing that I can imagine, where my gift to you counts as your contribution.”)
While the April 1 deadline to pass a state budget isn’t actually a hard deadline — in the past, budget debates have dragged on as long as August — it does provide important political cover for state legislators who might be antsy about sending $1 billion to a pair of NFL billionaires (or just antsy about being called out for doing so): With no time for public hearings where they might have to take a stand, they can just silently acquiesce to Hochul’s plans and let her take any heat for the giveaway. This is not a system that is unique to New York state government by any means, but New York does seem to have perfected it.
Hochul, meanwhile, continued her push to say that the billion-dollar subsidy isn’t really a billion-dollar subsidy, arguing that because the state just received $564.8 million in overdue casino payments from the Seneca Nation, that means “the direct hit to taxpayers [of the stadium] is significantly less.” That’s the equivalent of overpaying your taxes all year, getting the money back in an IRS refund in April, and saying, “Now I can afford that new motorcycle!”, but clearly Hochul is leaving nothing to chance, even as she appears to hold all the cards in her push to make herself the most spendthrifty governor in history on sports subsidies.
This may sound weird but as an Illinois resident I am concerned about the precedent this sets for the Bears proposed stadium.
Amid all the hand wringing by politicians about the shameful way this has been done, I don’t hear anyone saying they are actually going to vote against it.
I hear a lot of elected puppets ranting on about how they are afraid they will be voted out of office if they vote against the budget. I don’t hear a single member of the legislature saying they will stand up against this kind of thing.
Want to stop some self dealing shill like Hochul from doing these take out the trash jobs? Vote down the budget and let everyone know you are doing it because she tried to tack on stadium bills with less than 3 days to the vote and didn’t provide any details on what was being proposed to vote on in any case.
If you vote for it, you are part of the problem.
“Assembly Majority Leader Crystal Peoples-Stokes — identified by the Associated Press in its article as “Senate Majority Leader,” sure, who needs copy editors? — praised the deal as a “once-in-a-generation opportunity for advancement.””
She needs to clarify – whose advancement is she speaking of?
So if my math is right, you’re looking at about $50 million a year in debt service. That’s about .020% of the states annual budget. That’s before you factor in players income taxes. New York State has a top tax rate of 10.9%. By the time this stadium opens the NFL Salary cap will be about $300 million. So you’re already getting over $30 million just from that (while substitution effect works for the sales/ticket taxes you’re not going to get $300 million worth of waiters and movie theater staff). Within 10 years you’ll probably be at $500 million payrolls so you’re even at that point.
So if the state is out of pocket $20 million a year at the start of the stadium, before breaking even in 10 years. For arguments sake lets assume a linear decrease of $2 million per year. That’s $110 million the state would be out of pocket over years. While its overall budget will be roughly $3 trillion over that time. Sure the NFL team is the hill to die on.
Your math is wrong. It’s a little over $50 million a year in debt service, yes, but there’s also $13 million a year in state maintenance and upgrade funds, plus an as-yet-undetermined amount of county money for those funds. So let’s say $70 million a year in annual public costs.
The state’s estimate is $27 million a year in income taxes from the Bills. (There is very much substitution in income taxes — yes, waiters and movie theater staff make a lot less than NFL players, but there are a lot more of them than Bills players — but let’s ignore that for a moment.) So you’re starting out at a $43 million a year loss.
The current NFL salary cap is $208 million, and is rising by about 6% a year, so i won’t hit $300 million until 2029. It won’t hit $500 million until 2037, and won’t pass $539 million (the amount it would take to pay off $70 million a year, if you accept the governor’s income tax numbers) until 2039. So it’s possible that the public will stop seeing annual losses halfway through the Bills’ lease, if you count all of the income taxes that the players pay as a windfall, assume that that team would have left without $1 billion in subsidies, and assume that none of the money spent elsewhere would shift to other income tax revenues.
(It’s worth noting here that no studies of cities that have actually lost or gained teams have found any measurable impact on income tax revenues. It’s possible there’s some impact that is too small to be measured.)
You are correct that the state budget is much bigger than what’s being offered to the Bills owners, and even much bigger than what’s being offered to all sports teams, film shoots, developers, and other corporate subsidy recipients each year. I guess “The state has lots of tax money, no one will notice a billion dollars for a couple of billionaires” is an argument, but if that’s the case, I would like $10,000 to remodel my kitchen as well — that would never be noticed in the state budget, and I would absolutely pay it back in state income taxes over the life of my new cabinets.