Stadiums or Schools: An Analysis of Public Expenditures

Dan here…I don’t usually pass along a study that has a company attached to the article itself, but thought this one might be of interest for readers.

On government handouts sports, stadiums or schools is the political side of the issue.

Stadiums or Schools: An Analysis of Public Expenditures

What we found is that ten states have allocated public funds to fund new professional sports stadiums since 2008. This does not include state expenditures on collegiate or high-school sports facilities. While there are certainly debates we should have over, for example, how much a state spends on high school instruction versus a high school football stadium, because school (i.e. college and high-school) sports facilities are technically part of a school and have some (the size of which is, of course, debatable) educational benefit, we left them out. We therefore focused on public revenue used to finance professional sports stadiums for privately owned teams.

The ten states have allocated nearly six billion dollars for these facilities since 2008. What’s troubling is that six of those states–Florida, Georgia, Michigan, New York, Texas and Wisconsin–have, over the same period, cut their education budgets. Those six states have allocated over $4 billion to help finance privately owned sports stadiums while at the same time cutting their state education budgets. Most alarming, three of those states–Georgia, Texas and Wisconsin–rank in the top 12 among states that have cut education budgets since 2008.

Ultimately, the issue of using taxpayer dollars to fund privately owned sports stadiums raises larger ethical questions about public expenditures. These questions become particularly important when situated within the recent history of cuts to education budgets and rising college tuition costs in most states. Moreover, in an era of incessant government austerity, shouldn’t we be putting specific fiscal constraints on the lease agreements between professional sports teams and state governments? This seems especially prudent given the fact that virtually every analysis of the long term economic effects of stadiums find no evidence that cities receive anywhere near an attractive return on their investment. Cities, in fact, lose money on these investments. Most recently, a study done by the Federal Reserve Bank of St. Louis found that “86 percent of economists agreed that ‘local and state governments in the U.S. should eliminate subsidies to professional sports franchises.'”

Considering the antitrust exemption enjoyed by sports teams and the often billionaire net worths of their owners, maybe it is time to consider laws that require owners commit a sizeable majority percentage of funding for stadiums in their lease agreements before the public has to commit any funds, or prohibits state support altogether. Moreover, if we are going to continue to divert public monies to sports stadiums, maybe it is time for sports teams to commit more real economic development to their local communities. For instance,

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