October 8, 1998

October 8, 1998 | Commentary on Taxes

Tax Me Out To The Ballgame

Here's an interesting Sammy Sosa statistic you might not have heard this summer: Most of his home runs were hit in a privately funded ballpark. But alas, Chicago's Wrigley Field is a rarity-public financing of professional ballparks has become as common as an infield fly.

Take New York for instance. The Yankees broke a team attendance record this year, yet owner George Steinbrenner hopes to build a $1.1 billion stadium in Manhattan-largely financed by the taxpayers. Of course the Mets would scream "foul" if the city built a stadium just for the Yankees. So they're asking for at least $100 million of public booty to help underwrite a new $450 million ballpark of their own.

Now I love sports as much as anyone, but if I'm going to pay big bucks to go to a baseball or football game, I don't want to shell out a second time when I pay my taxes.

It isn't just the big cities that are doing this, either. The city council of Round Rock, Texas, was delighted when baseball legend Nolan Ryan pledged $6 million to build a minor league park in their community. The problem: Residents of Round Rock were expected to come up with an additional $7 million. Fortunately a grass-roots petition threw a wrench in the deal and forced it onto the Nov. 3 ballot.

"It's just corporate welfare," David Oatman, one of Round Rock's anti-stadium leaders, told the San Francisco Examiner.

What's truly indefensible is the disregard stadium supporters have for democracy. In 1995 voters in Seattle rejected a proposed sales-tax increase that would have been used to build a park for the Mariners. The legislature responded by authorizing taxes for a new stadium and declaring it "a public emergency." Worse yet, the Washington Supreme Court agreed that the need for a new ballpark was indeed a public emergency.

Voters have never been keen on spending their taxes on stadiums. Even in San Francisco-a city known for its welfare generosity-proposals to build the Giants a new home were rejected by the voters four times. The team finally got the message, and now the Giants are raising $136 million and borrowing an additional $170 million in private loans.

And that's the way it should be. Professional sports teams are big businesses and should rely on the free market, not corporate welfare. Unfortunately that's frequently not the case. A 1991 study by the University of California at Berkeley determined that 79 of 102 pro teams were playing in publicly owned stadiums and arenas.

Team owners often tout the economic benefits these venues bring to cities. And there's no doubt new ballparks are good for local businesses during game days. What these owners seem to ignore, however, is an economic concept called "the substitution effect." Simply put, consumers have a limited number of entertainment dollars. If they don't spend this money at the ballpark, they will spend it at a concert, the bowling alley or a movie theater. The net gain to the city is thus far less than advertised.

Unfortunately the teams that receive the generous subsidies are unwilling to repay the generosity of the taxpayers. Visitors to Washington, D.C., can tour the Lincoln Memorial or White House for free-because their tax dollars already paid for these magnificent structures. Somehow I don't think that argument would get me into a Redskins game without a ticket.

Edwin J. Feulner is president of The Heritage Foundation (www.heritage.org), a Washington-based public policy research institute.

About the Author

Edwin J. Feulner, Ph.D. Founder, Chairman of the Asian Studies Center, and Chung Ju-yung Fellow
Founder's Office