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Supposed Economic-Opportunity Zones Are Taxpayer Scams
Tallahassee, FL – Americans for Prosperity-Florida, the state’s leading grassroots advocates against corporate welfare and using taxpayer dollars to prop up privately owned sports franchises, released the following statement upon news of Tampa Mayor Bob Buckhorn carving out a path through federal policy to pull tax dollars from across the country for a sweetheart to lure the Tampa Rays to Ybor City.
“The only ones who will benefit from this lopsided deal are crony politicians and the Rays’ ownership. The audacity of the team to insist that they will only pay for $150 million of a potentially $800 million project is emblematic of the entitled mentality that drives these corporate welfare schemes. Taxpayers deserve better.”
“A new empirical study for the Mercatus Center at George Mason University finds that there is still little evidence that building stadiums or arenas for professional sports franchises leads to significant economic benefits. Sports-initiated development is unlikely to make a community wealthier, and subsidizing professional sports teams may actually reduce economic growth. If a local government is considering adopting economic growth policies, there are far better candidates than subsidizing professional sports franchises.”
In our…Brookings book, Sports, Jobs, and Taxes, we and 15 collaborators examine the local economic development argument from all angles: case studies of the effect of specific facilities, as well as comparisons among cities and even neighborhoods that have and have not sunk hundreds of millions of dollars into sports development. In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.
According to Chris Hudson, director of AFP’s Florida operations, the group aims to draw a line in the sand as discussions continue between local government officials and the Rays to ensure no taxpayer money is used to woo the team from one side of the bay to the other.
So far, the commission has sent mixed messages about its willingness to use public money for a potential stadium in the Ybor City area. Early estimates for the stadium have put the cost somewhere in the $500 million to $650 million range.
According to a study by the Florida Office of Economic and Demographic Research, financial incentives from state government to professional sports teams only bring back 30 cents for each dollar given to the team. Amy Baker, chief economist for the Legislature, said the return is likely higher for local governments rather than the state, but it’s hardly a guarantee that the local government will break even.
Investigative reporter Noah Pransky points to the boondoggles in Miami that led to taxpayers being on the hook for over $1 billion that has not produced big crowds nor the revitalized neighborhood the team promised, the deal in Cincinnati that resulted in a local officials having to sell off a hospital to pay for their stadium deal, and how Atlanta’s new park has forced county officials to look at shutting down local libraries.
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