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Federal Subsidy for Private Sports Stadiums Since 2000: $3.2 Billion
Ted Gayer, Austin J. Drukker, and Alexander K. Gold write a blog post introducing a new paper on the federal subsidies devoted to private sports stadiums in the United States.
The article opens with the example set by the house that replaced the "House that Ruth Built": the new Yankee Stadium that opened in 2009. The stadium received $1.7 billion in tax-exempt municipal bonds, which amounts to a $431 million federal subsidy. The stadium's financing is also responsible for another $61 million in lost federal tax revenues: "High-income taxpayers holding the bonds receive a windfall tax break, resulting in an even greater loss of revenue to the federal government."
The new paper by the Brookings team finds 35 examples of tax-exempt bond financing of professional sports stadiums since 2000.
All together, the federal government has subsidized newly constructed or majorly renovated professional sports stadiums to the tune of $3.2 billion federal taxpayer dollars since 2000. But because high-income bond holders receive a windfall gain for holding municipal bonds, the resulting loss in total revenue to the federal government is even larger at $3.7 billion.
The article also includes an interactive menu of federal financing for stadiums, with stadiums from Major League Baseball, the National Football league, the National Basketball Association, an the National Hockey league included.
The study also recommends a way to end the subsidy gravy train for private sports stadiums: eliminate the private payment test for stadiums. "By doing so, any stadium used primarily for 'private business use' (that is, all professional sports stadiums) would no longer be eligible to receive federal tax-exempt financing," according to the article.