By CHRIS HELLER at Pacific Standard
What’s America to do about its stadium problem?
Over the past 15 years, more than $12 billion in public money has been spent on privately owned stadiums. Between 1991 and 2010, 101 new stadiums were opened across the country; nearly all those projects were funded by taxpayers. The loans most often used to pay for stadium construction—a variety of tax-exempt municipal bonds—will cost the federal government at least $4 billion in taxpayer subsidies to bondholders. Stadiums are built with money borrowed today, against public money spent tomorrow, at the expense of taxes that will never be collected. Economists almost universally agree that publicly financed stadiums are bad investments, yet cities and states still race to the chance to unload the cash. What gives?
To understand this stadium trend, and why it’s so hard for opponents to thwart public funding, look to Wisconsin. Last month, Governor Scott Walker signed a bill to spend $250 million on a new basketball arena for the Milwaukee Bucks. (The true cost of the project, including interest payments, will be more than $400 million.) Milwaukee Common Council, the city’s lawmaking body, will weigh the arena proposal on September 22, after a series of public hearings. If the council-members approve it—and if recent history is any indicator, they will—construction could begin as early as October. When the Bucks step onto the court to start the 2017–18 NBA season, they could very well do so in a shiny, subsidized, half-billion-dollar arena.
Stadiums are built with money borrowed today, against public money spent tomorrow, at the expense of taxes that will never be collected.
The story of what’s happening in Milwaukee is remarkable, if not already familiar. Step one: A down-on-its-luck team is