You may hate football, but there’s a very good chance your tax dollars are being used to build the next billion dollar NFL stadium anyway. In case you haven’t heard, public funding of these enormous edifices has been growing in popularity since 1923, when Los Angeles Coliseum became the first stadium to be entirely funded by tax dollars. In recent decades, the usual scheme involves the team owner throwing in a little money and state and/or local governments supplying the rest through tax-free municipal bonds. Keep reading to find out exactly how you are supporting a billionaire’s sports team habit.
The Numbers
No matter how you slice it, public contributions to new stadiums are a big chunk of change. Here are a few examples. The world’s first billion dollar stadium opened in Dallas in 2009. Though Dallas Cowboys owner, Jerry Jones, famously put up the lion’s share for the $1.2 billion cost of construction, $325 million came from public coffers. As an article in Citylab stated, the process was essentially a wealth transfer from average Americans into the pocketbook of a multi-billionaire
An even worse deal was struck by the city of Minneapolis in an effort to keep their beloved Minnesota Vikings from bolting for greener pastures. The bottom line: taxpayers wound up paying nearly half of the eventual $1.06 billion dollar price tag, a whopping $498 million. Ouch. So how does a city or state manage to cram these expensive projects down the local populace’s throat, sometimes even when they vote against it?
The Scheme
At the heart of current stadium funding lies every investor’s favorite vehicle, the tax-free municipal bond. It’s quite simple, really. When a municipality decides it needs money to fund a project, they sell municipal bonds which promise to return to an investor (purchaser) both his capital plus interest after a certain period of time. Investors love the so called muni-bond because any interest earned is exempt from being taxed as income.
The bottom line is that, if a municipality has sudden need of $500 million to pitch in for a new stadium, all they have to do is sell a truckload of muni-bonds and the money comes rolling in. But how do they pay the bill when it comes time to return the invested capital plus interest? The taxpayer, of course! Taxpayers allegedly have some say in the matter at the ballot box when a stadium referendum is brought before them. Unfortunately, the idea of choice is often nothing more than a cruel hoax.
Back Room Deals
The “Stadium Authority” has become a dirty word in recent years. This kind of authority is a select committee created by a state or local government with the express task of approving a stadium referendum WITHOUT taxpayer consent. You read that right. A stadium authority may consist of a handful or maybe a dozen people who have been officially given the authority to enter thousands, maybe millions, of citizens into a half a billion dollar debt. Think an arrangement like this might be open to graft and corruption? It makes it very easy to know whom to bribe. Long time supporters of fans’ interest like 5Dimes reviews fear the game may be ultimately tarnished by such “cram down” approaches.
The “relocation card” is one that has become increasingly popular. A recent example can be seen in St. Louis, where the hometown Rams wanted a stadium better than the Edward Jones Dome, where they’ve been playing for two decades. Owner Stan Kroenke threatened to move the team to Los Angeles if city administrators didn’t figure out a way to build him a new billion dollar stadium. They didn’t, so he left, and now there’s no professional football to be found in St. Louis this year. And that’s the way the game is played these days, boys and girls.
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