Delta Center Major cities are positioning themselves to lure professional sports teams to their city by building new stadiums. Before the facilities are constructed, however, politicians and residents alike are asking a fundamental question: "Are we going to get a positive return on this multi-million dollar investment? Will this team be the one to attract visitors and perhaps a national championship to our city?" These questions and more invade the resistant minds of America's millions who desperately want a sports team in their city, but don't want to be stuck with the bill. A study from the U.S. News & World Report revealed over $7 billion has been spent or committed in the last three years to build or renovate over 30 professional sports facilities, and the figure may double in the next few years (Maloney, 1996).

Target CenterTaxpayers are ultimately paying the cost of building stadiums for potential and current teams. Some cities, however, are starting to come up with alternative ways to fund arenas. By 1997, 18 cities around the country were using travel tax revenue to support stadium facilities and more are expected to follow suit. Officials have increased taxes on products such as car rentals, hotels and restaurants. In the 18 cities, in fact, the average hotel tax increased 15 percent and car rental taxes increased about 20 percent (Mukherjee, 1997).

On the flip side, opponents to increasing travel taxes say that the tax hike would scare away conventions and may actually target city residents instead. A spokesperson for the American Car Rental Association said that more than 40 percent of Budget car rentals and at least 90 percent of Enterprise rentals are loaned to people in their own community and says that some people will be targeted and will eventually pay more than others. He also says that a broad-based sales tax would be a better option than using a travel tax on potential tourists (Mukherjee, 1997).

Other avenues have been explored as well. Government officials are approving bills that would allow the residents to vote on whether a new stadium should be built and whether to increase certain taxes to pay for it. Ticket prices and parking fees are among the fee increasing options to help subsidize the funding. Ironically, voters are more likely to agree to use tax money to fund a sports arena when the team wins. Voters are more hesitant to pay for an arena for a relatively new team like the National Hockey League's (NHL) Minnesota Wild or a struggling team like the Houston Rockets. A year after the San Antonio Spurs won the NBA Championship, residents voted 60-40 in favor of increasing hotel and rental taxes to help fund a new $175 million arena that would replace the 6-year-old Alamodome. The Spurs organization pledged $28.5 million toward construction, with the rest funded by bonds paid for by the increased taxes. Corel Centre

Between 1987 and 2000, taxpayers forked over almost 60 percent of the $12 billion or more that was spent on new stadiums and arenas in the four major league professional sports (not counting hundreds of millions more for minor-league ballparks)(Bast, 1998). State and locally elected officials and team owners are in agreement that taxpayers should pay for new ballparks. Only the voters can stop stadium-happy teams and owners from erecting multi-million dollar buildings to house their athletes. At the very least, the public should have the opportunity to review and vote on any taxes levied for new sports facilities. Although polls show the public overwhelmingly opposes taxpayer funding for sports facilities, voting on recent proposals has been mixed. But even projects that are approved by voters usually pass by only slim margins, and only after stadium supporters have waged huge public-relations campaigns.

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Last Updated: April 19, 2001
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