Oregon okays $800m in stadium bonds for MLB team, to be paid for with player income taxes that may not exist

The votes are starting to come fast and furious now, as state legislative sessions wind down and lawmakers finalize work on stadium and arena bills. The latest yesterday was Oregon, where the state house voted 46-6 to approve using tax money to fund a new MLB baseball stadium, should Portland be awarded a team:

The bill authorizes $800 million in bonds to help fund the construction of a professional baseball stadium on Portland’s South Waterfront.

Instead of pulling from current state revenue, the bill calls for paying off the bonds through income taxes on players and staff. Proponents say it would be on the team to figure out how to fund the rest of the stadium, expected to cost $2 billion.

That $800 million figure is a little uncertain: While the bill authorizes the state to sell $800 million worth of bonds toward a stadium, it proposes paying it off with state income taxes paid by players, team staff, and their families. (A lot of the reporting is calling this a “jock tax,” as if it’s a special surcharge, but it’s not: While Oregon does charge income tax on visiting players, everyone on both teams in games played in Portland would still pay the usual maximum 9.9% Oregon income tax rate.) If baseball salaries keep soaring — and if a Portland team has close to an average MLB payroll, which is questionable given the behavior of some other expansion teams in low-revenue markets — then this could amount to enough money to pay off $800 million. If they stay flat as they have in recent years, though, the stadium fund could end $600 million short — even the bill’s own projections of a 3% annual rise in salaries would seem to leave the state about $200 million in the red.

So what happens if Portland gets a team, Oregon sells $800 million in bonds, and then there isn’t enough income tax revenue to pay it off? Advocates for the stadium subsidy say the owners of the as-yet-imaginary team would have to cover the difference — but that’s not at all how bonds work. It’s conceivable that Oregon could try to get team owners to agree to cover any shortfall in tax revenue in their lease, but that would be a really tough negotiating point, especially since MLB could easily just step in and say “cover the full $800 million or else we don’t give you an expansion team,” at which point Oregon would have to roll the dice on future salaries soaring or give up on its MLB dreams.

Not that the exact amount of future player income tax revenue matters that much: Even if it enough does come in to pay off the state’s share of stadium bonds, 1) it’s not all new money to Oregon, since a large chunk of it comes from local residents spending money on baseball in place of other things, and 2) it’s not a great idea to kick back taxes to local businesses because soon everyone will want one. But with pay-your-taxes-and-eat-them-too plans all the rage, it is still somewhat worthwhile to look at whether the tax money being promised will actually exist, and in Oregon’s case the answer seems to be “let’s all pretend and hope for the best.”

But anyway, Portland baseball boosters finally have an $800 million IOU from the state that they can wave in MLB’s face to try to get an expansion team if and when MLB actually expands, so it should be smooth sailing from—

Organizers floated several possible locations before settling on the former Zidell Yards shipbuilding site on a narrow strip of land between the Ross Island Bridge and the Tilikum Crossing.

The property offers terrific views of the Willamette River and great access to public transit, but few routes to the ballpark for private vehicles. Beyond that, backers have acknowledged the soil may be toxic on the former industrial property. And the site is in a liquefaction zone, meaning the ballpark would need expensive supports to ensure it could survive a major earthquake.

Toxic soil! Could fall down in an earthquake! Questionable finances! Just go ahead, Oregon, and plan your stadium on a haunted burial ground, might as well go for the clean sweep.