JUSTIN STEVENS: Taxpayer stadium subsidies is corporate welfare

We Hoosiers love sports.

Perhaps this is why professional sports team owners are convinced that they have us all figured out. Every few years they come to us with a pretty convincing pitch: Help us build a new stadium or arena for our team and, in return, we’ll see increased economic growth in our community.

But just as with any offer that sounds too good to be true, it pays to read the fine print. The two words that often get buried in the excitement of a shiny new sports complex are “taxpayer subsidies.”

Taxpayer subsidies are often a big part of the financing that goes into building a new stadium. Unfortunately, years of research tell us that the economic benefits of taxpayer-subsidized stadiums are likely to never exceed the investment costs — and end up leaving taxpayers on the hook for millions of dollars.

State Rep. Tim Wesco (R-Osceola) recently introduced legislation that would put an end to this unfair arrangement that takes money from hardworking taxpayers and gives it to the professional sports teams that do not need government help and end up costing taxpayers a lot more than we bargained for.

We know this because we’ve been down this road before.

Built in 2008 for our beloved Colts, Lucas Oil Stadium ended up costing a staggering $719.6 million. But the real story here is that Indiana taxpayers paid 86 percent of the tab. When the stadium was built, that was the largest taxpayer handout for any NFL stadium in history.

To make matters worse, records show that we ended up paying some of that cost in the form of higher taxes.

Harvard University Professor Judith Grant Long recently crunched the numbers and found that around 70 percent of the capital that is poured into the construction of new professional sports stadiums is being paid by taxpayers.

In fact, over the last 17 years, 36 pro teams have made improvements to their stadiums or built new ones at a cost of $3.2 billion, according to the Brookings Institution.

As for the promised economic benefits of taxpayer-subsidized sports facilities, the Mercatus Center found that “at most, sports account for less than 5 percent of the local economy.” The authors of the study sum it up this way: “sports teams are not the star players in local economies.”

Fortunately, there are signs that taxpayers are beginning to smarten up about this poor return on investment. Just last year, San Diego voters and public officials rejected a proposal to subsidized a new sports complex with revenue from a hotel tax increase (from 12.5 percent to 16.5 percent).

Rep. Wesco hopes to build on that momentum by saying no to crony capitalism — no matter how tempting. His measure would prohibit public dollars from going toward the construction of professional sports stadiums, but only after 24 other states enact similar legislation. In the interim, this makes sense. The last thing we want to see is our favorite pro sports team move to another state because they offered incentives when we didn’t. But by including this provision, it would all but eliminate that risk while still putting the state in a position to end stadium subsidies.

At the end of the day, this isn’t about how much we love the Colts or the Pacers or the Indians. It’s about demanding that our public officials be good stewards of our tax dollars.

Cheering Victor Oladipo shouldn’t require saddling our children and grandchildren with a mountain of debt. We might believe in our hearts in the fairy tale story that Andrew Luck will return to health and lead the Colts to glory, but that doesn’t mean we have to believe in the fairy tale of new stadiums that lead to economic booms.

We should know better, and it’s about time we take some steps to ensure it won’t happen again.

Justin Stevens is the Indiana director for Americans for Prosperity.