Taxpayer-funded stadiums are increasingly making the news. And according to Matthew Glans of The Heartland Institute, they are a really bad deal for those footing the bill:
Supporters of taxpayer funding for stadiums have long claimed the new facilities act as engines of new economic development, but several economic studies have found their influence to be limited. In a Reason Public Policy Institute report, Samuel Staley and Leonard Gilroy note the majority of research on the economic effects of stadium construction has found no link between the new facilities and job or income growth. Critics also challenge the notion that stadiums create new consumer spending; any new spending generated by a stadium is simply shifted from other spending, ultimately ending up in the team owner’s pocket, not the local economy.
Stadium subsidies are a poor use of taxpayer dollars. They rarely realize the benefits their supporters claim, and they shift tax revenue away from where it is better utilized. To improve their competitiveness, cities would do better by reducing tax rates or investing in more cost-effective improvements such as new and improved infrastructure.
So it is troubling that Wisconsin Gov. Scott Walker is promoting this economic sorcery at the expense of the taxpayers:
Taxpayers would pick up half the cost of a $500 million arena for the Milwaukee Bucks under a financial deal that would rely on current and former team owners for the rest, Gov. Scott Walker said Thursday.
Walker, a likely presidential candidate, has argued for months that it will cost the state more in lost income-tax revenue if the NBA team leaves Milwaukee than it will to pay for a new downtown arena.
Standing behind a podium with a sign that read, “Cheaper to Keep Them,” he announced the long-awaited deal surrounded by Republican legislative leaders, along with the Democratic leaders of the city and Milwaukee County.
“The price of doing nothing is not zero. It’s $419 million,” Walker said, one of repeated references to the estimated lost revenue and growth over 20 years if the team moves. “It’s not just a good deal. It’s a really bad deal if we don’t do anything.”
Walker, who is running for president, is largely seen as a strong fiscal conservative. His recent announcement should surely put that idea to rest.
I would advise him to read the lessons of free market economist Frederic Bastiat, who in 1850 wrote the incredible piece “That Which is Seen, and That Which is Not Seen.”