Tuesday, July 29, 2003
Copyright © Las Vegas Review-Journal

EDITORIAL: Stadium deals

The glut of taxpayer-financed sports facilities constructed throughout the 1990s did more than drain local coffers -- it dinged federal taxpayers as well.

A report published in The Washington Post on Monday noted that, thanks to a loophole in the Internal Revenue Code, backers of local sports facilities have issued more than $6.3 billion in bonds that are exempt from federal taxes. The cost to the Treasury: as much as $500 million a year.

"The advantage of tax-exempt bonds is that they allow cities, counties, stadium authorities and other public entities to borrow money at lower interest rates, saving millions of dollars annually on debt repayment," the Post reports. "Bond investors accept the lower rates because their earnings are not taxed."

While this money may be a drop in the bucket, relatively speaking -- the federal budget this year totals some $2.1 trillion -- the subsidy is difficult to justify.

Barry Platt, communications director for stadium critic Sen. Byron Dorgan, D-N.D., accurately calls this tax break "a very expensive public housing program for millionaires -- a subsidy for the millionaires who own these teams and the millionaire athletes who play on them."

The issue here is not whether communities should dedicate public funds to support sports franchises. Some facilities are boondoggles, pure and simple. Others can spur economic development, become a cultural attraction or alleviate urban blight.

But the construction of sports arenas is not the concern of the federal government. Congress should close this loophole and allow local officials to decide -- based on the merits of the proposal -- whether public support of a stadium is a worthwhile cause.