Leftist Lady Turns Fiscal Conservative: You Can’t Buy A Stadium If You’re Broke

Leftist Lady Turns Fiscal Conservative: You Can’t Buy A Stadium If You’re Broke

And you can’t cut essential government services to buy something you can’t afford.

And you’re broke if you can’t afford basic services.

And you’re bankrupt if you think that cutting social services for the most vulnerable is acceptable ever, and even more so to buy a stadium for a professional sports team.

But that’s what happened in Washington, DC.

The city bought a home for the billionaire owners of the Nationals (who then refused to pay rent), spending at least $611,000,000 of public money on the stadium. This despite the fact that Theodore Lerner, the managing principal owner of the Washington Nationals has an estimated net worth of $3 billion. (Washington Business Journal/Forbes).

What now? The city’s broke. After buying a stadium for one of the world’s wealthiest men, the residents of Washington, DC are now missing half a billion dollars necessary to operate the city.

The City Council recently refused to raise taxes on those making $350,000 by by less than 1/2% (from 8.5% to 8.9%), electing to keep pulling from those who have little political power to resist.

According to the Examiner, “opponents of the tax increase said it would lead to the 4,000 residents who would be hit with the tax to simply change their primary residences to their second homes in more tax-friendly states.” My former boss Andy Shallal wrote a poignant letter to the Washington Post stating while he wouldn’t be leaving and supports this tax even though he will have to pay it.

This entire article on government funding of stadiums from the Cato Institute is surprisingly worth reading in its entirety:

Stadium advocates have been amazingly successful in taking from the poor and giving to the rich. Raymond Keating, chief economist for the Small Business Survival Committee, estimates that government has poured more than $20 billion (in current dollars) into sports ventures in recent decades.

Yet such facilities once were and continue to be built privately. The only reason more franchise owners decline to construct their own stadiums is because taxpayers so often relieve them of the need to do so.

But there’s no reason to sacrifice the interest of taxpayers to that of sports fans. Stadiums are not a good financial investment. Public finance experts Roger Noll and Andrew Zimbalist concluded: “no recent facility appears to have earned anything approaching a reasonable return on investment and no recent facility has been self-financing in terms of its impact on net tax revenues.”

Don’t let this happen in your city!: Ten Things You Can Do.

  1. Get informed.
  2. Talk to other people: tell friends, family, neighbors, everyone you meet. Tell everyone.
  3. Pay attention to government spending in your city, state, and government, and hold your representatives accountable.
  4. Call the offices of your representatives when important votes are coming.
  5. Meet like-minded people in your town, working together is more effective than working alone.
  6. Write letters to the editor.
  7. Write an article.
  8. Organize a demonstration at City Hall.
  9. Connect the dots: poor funding decisions are not isolated. Public money spent on private projects benefits few at the expense of many.
  10. Make it personal: what happens to the people whose homes and businesses are displaced?

7 thoughts on “Leftist Lady Turns Fiscal Conservative: You Can’t Buy A Stadium If You’re Broke

  1. If all the city paid was $611,000 to help fund the new Nationals stadium, that’s a heck of deal. The incremental sales taxes generated by all the conecession sales must offset that amount. Are you sure they only paid $611,000?

    There are plenty of other municipalities, like my home of Baltimore, that paid much more for stadiums, etc. Whether they were able to recoup their investment, that’s a difficult question to answer without careful case by case analysis.

    1. What a difference a zero makes. I wrote this post a while ago and did some crappy editing at 6am this morning. Thanks for catching, Cullen.

      $611,000 is not the cost of the stadium. It was $611 Million / $611,000,000.

    1. Thanks Michael! I’m going to have one tomorrow with some more explorations of fiscal conservatism.

      1. Ok. Now I agree with your conclusion. I find it hard to believe that DC will ever get $611 Million of benefits to offset the stadium costs.

  2. It’s likely the actual cost to the city is much greater and can’t be calculated.

    I don’t know about the National’s case and sort of don’t have time to look at it. If it’s like most places, the land itself was taken by Eminant Domain, and nothing close to a fair market price was paid.

    Also, stadiums in the wrong places, have an amazing ability to destroy property value by creating massive peak traffic loads, and the need for huge parking dead spaces.

    Even with Baseball, the stadium sits empty or underused most of the time.

    Can we calculate how much the waterfront property within walking distance of Pittsburgh’s Downtown might have been worth? I mean, most people go to Pirate’s games these days for the view.’

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