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Taxpayers shouldn't be on the hook for baseball teams' stadiums

04/06/2015

In the 1989 movie, Field of Dreams, Terrance Mann, a reclusive civil rights hero played by James Earl Jones, gave a passionate speech in the climax of the movie in which he described the love-affair Americans have with baseball, our national pastime. "The one constant through all the years, Ray, has been baseball. America has rolled by like an army of steamrollers. It's been erased like a blackboard, rebuilt, and erased again,” Mann said.

Though other sports have gained popularity over the years, Americans still have a passion for baseball. Average attendance per game took a hit after the 1994-1995 strike, it has steadily risen, exceeding 30,000 in 2005 for the first time in since 1993. Professional clubs are, however, putting at risk the goodwill they have with their fans.

We tend to think of corporate welfare as bailouts for financial institutions and health insurance companies through ObamaCare or low-cost, taxpayer-backed loans from the Export-Import Bank, but another form of this is subsidies to professional sports teams for state of the art stadiums.

With anemic crowds attending home games, which is partially a reason the team played part of its “home” schedule at Hiram Bithorn Stadium in San Juan, Puerto Rico, Major League Baseball, in September 2004, announced that the Montreal Expos would move to its new permanent home in Washington, DC for the 2005 season. While the team was awaiting the construction of a new ballpark, it played its first three seasons in Robert F. Kennedy Memorial Stadium.

The District had not had a professional baseball team to call its own since the Washington Senators left the town to move to Arlington, Texas, where it’s now known as the Texas Rangers. With the population booming in the DC suburbs as the federal government was growing, putting a team in nation’s capital made sense, even though the Baltimore Orioles are less than 40 miles away.

In 2006, a closely divided DC City Council approved the $611 million needed to finance Nationals Park, though the final cost was closer to $700 million. Though the city council paid a part of the cost of upfront, it implemented four new revenue streams to help raise the money needed to cover bonds to pay for construction. One of these taxes, a temporary 10 percent gross-receipts tax on business with $5 million or more in revenue, was partially used to plug holes in the city's budget rather than finance bonds to pay for the stadium.

Obviously, it's bad policy to put taxpayers on the hook for any private entity, but the costs to taxpayers were only one part of the story. Rarely mentioned are the 16 property owners who saw their businesses taken by the city through eminent domain. "I've cried so many days since this first came up," Patricia Ghiglino, an art studio owner whose property was taken, told the Washington Post in October 2005. "It was very, very personal to me. We created the center. I worked 60 to 90 hours a week here, on Saturdays and Sundays. This became not just a business but also my home."

Supporters of publicly financed stadiums often point to economic development and job creation as benefits for neighborhoods in which ballparks are built. But most of the jobs, as the Wall Street Journal notes, are "low-wage concession jobs." Washington's Navy Yard neighborhood, where Nationals Park is located, has seen growth that has been attributed to the stadium, but the investment the city made hasn't lived up to expectations.

"In a report used by the city's Chief Financial Officer to obtain financing, the city had counted on the stadium to bring in $24 million a year last year from taxes on tickets, parking and concessions," Fox DC reported in Ferbuary 2013. "In fiscal 2012, tax figures provided by the CFO's office showed the stadium only brought in $12.6 million in tax revenue despite finishing with the league's best record."

Other cities and counties across the national are looking at building new stadiums for professional sports teams on the public dime. The NFL's Atlanta Falcons and MLB's Atlanta Braves are getting new parks, though the latter had to move out of the city limits and into a north Metro Atlanta county to find a government gullible enough to pick up the tab. The Falcons' new stadium will cost $1.4 billion, of which $200 million will be picked up by Atlanta, while Cobb County will cover $300 million of the $672 million Braves' stadium.

The NBA's Milwaukee Bucks are also getting new digs. Gov. Scott Walker, a Republican, recently signed off on a $220 million bond package to help pay for this brand of corporate welfare, which he oddly claimed was a "common-sense, fiscally conservative approach."

Though the vast majority of President Barack Obama's FY 2016 budget was packed with awful big government policies, one minor positive was a proposal to end tax-exempt bonds to finance the construction of new stadiums and arenas for professional sports teams. The White House may have meant for this to be an easy way to raise revenue, but it's certainly is good policy because it discourages public financing of this brand of corporate welfare.

With a new baseball season officially underway, fans should stop and take notice that they're not only shelling out big bucks to see the game with their families but also being taken advantage of by local governments and the teams they're watching.

Baseball is still a great game, but the message in Field of Dreams is lost on many baseball franchise owners. Though America's favorite pastime has become a business, where dollars and cents matter to owners and players, that doesn't mean that taxpayers should be shouldering the risk for private entities.