Most cities want to boast being the home to their state’s NBA or NFL team but recent news shows that these bragging rights don’t necessarily bring profits to the residents or the tax payers of the town. As such, the Obama administration has proposed in the 2016 budget to repeal the use of tax-exempt bonds to finance professional sports facilities.
“The current structuring of the governmental bonds to finance sports facilities has shifted more of the costs and risks from the private owners to local residents and taxpayers in general,” stated the Department of Treasury in the 2016 Revenue Proposal.
Many economists have stated over the years that sports facilities do not bring the economic boost that most small cities expect. In the Wall Street Journal, Dennis Coates, an economist at the University of Maryland stated “You’re not going to get income growth; you’re not going to get tax growth; you’re not going to get employment growth.”
Yankee Stadium in New York was built with more than $1 billion in tax-free debt, according to the Wall Street Journal which reports that little real-estate development followed.