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Public arenas, fiscal failures

From the Bluegrass Institute for Public Policy Solutions

Lawmakers from around the country seem more than willing to throw millions of taxpayers’ dollars into the building of sports arenas and convention centers.

Washington state taxpayers recently subsidized $591 million for Qwest Field, $427 million for Safeco Field, $139 million for a remodeling of Key Arena, $200 million for the retirement of the Kingdome's debt and $168 million for freeway access improvements to Qwest Field.

These humongous publicly financed facilities open up a bottomless vacuum that suck away people’s hard-earned money. Taxpayers often end up paying for such follies through restaurant taxes and fee increases, while local politicians slap each other on the back while congratulating themselves for bringing facilities to local communities.

Convention centers and sports stadiums can be good for a community if there is an adequate demand for them. However, facilities subsidized by government rarely succeed economically.

If a demand exists for convention centers and arenas, then private investments for the facilities should support the effort. For example, New York Yankees owner George Steinbrenner recently announced he will privately finance an $800 million stadium in his city.

Kentucky has its share of government-subsidized facilities. For example, Pikeville, which has a population of 6,000, now has an arena with more seats than the city’s entire population. Considering what’s happened in other places, this arena will likely lose money each year.

The next time local politicians travel to Frankfort seeking a handout to build a new arena, lawmakers should deny their request and point them to the private sector.

Sources:

“Magical kingdom not so enchanting after all” by Joel Peyton, Bluegrass Institute.

“Yes on sports facilities … with private funds” by Victor Joecks, Evergreen Freedom Foundation.

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