Poli-ticks

Will money worries curb PawSox subsidy largesse?

By Arlene Violet
Posted 8/19/17

Say you, riding around in your jalopy. You finally got a car tax break for this year. It was quite a ride, though, getting to the passage of this legislation. After more than a month of dawdling the …

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Poli-ticks

Will money worries curb PawSox subsidy largesse?

Posted

Say you, riding around in your jalopy. You finally got a car tax break for this year. It was quite a ride, though, getting to the passage of this legislation. After more than a month of dawdling the Senators explained their hesitation on the floor of the Rhode Island Senate. Senator after senator intoned that they had to be prudent. As one explained, we are in a bull market that could suddenly turn bearish and the state government would be up the proverbial creek. Another had his eye on North Korea where a military clash could send the United States economy into a spiral. Let’s just hope that this same prudence curbs the penchant for a giveaway to the billionaire boys club when they come looking for a $71 million subsidy for their ballpark this September.

Under legislation submitted on behalf of the Pawsox owners, $71 million would technically be the responsibility of state taxpayers. Each year’s budget must include money for full payment of the state and city shares of the stadium debt if rent payments and naming rights don’t pay for each year. When adding in the interest over 30 years plus costs of issuance, the amount for which taxpayers would be on the hook is about $135 million.

Legislators should think twice then about the choice to give continuing car tax relief to the middle class or to give corporate welfare instead. If the stadium is such a failsafe idea, the owners should sign personal guarantees that bind them, their heirs, and assigns to pay any shortfall.

One fig leaf being circulated is that the league will pay if revenue falls short. First of all, no such obligation is in the legislation. Secondly, even if the league was part of the lease agreement what makes you think they will still be in business in 25-30 years? Just watch an away game for the Pawsox. The bleachers are barren of fans. There also is a legal issue as to whether an entity like the league can indemnify a state or municipality as an “owner” since either isn’t a league member.

So, when you look at the conclusion of the Brookings institute, its 15 expert collaborators,a veritable treasure trove of analyses on the economic benefits of sports stadiums, etc. the research concludes that a new sports facility has an extremely small if any (and mostly negative) effect on overall economic activity. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues.

It is quixotic to think that the “lease” would protect taxpayers with provisions requiring 30 years of rental, or a penalty, if vacating the stadium. As you have already seen, the Pawsox were very willing to walk out of its Pawtucket lease. Ironically, the very reason, i.e. an outdated facility, why the Pawsox owners are arguing that it needs a new stadium will exactly be the grounds for a further extraction of taxpayers money as technology makes the “new” stadium as obsolete as yesterday’s flip phone or the PET 2001 personal computer.

You shouldn’t be clubbed with a future withdrawal of the car tax so the billionaire boys club can be protected with your money.

Arlene Violet is an attorney and former Rhode Island Attorney General.

Arlene Violet

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