Raimondo’s Close Friend Sen. Booker Pushing Federal Bill that Would Kill PawSox Deal
Monday, September 18, 2017
Rhode Island Governor Gina Raimondo’s close friend (and former boss of Rhode Island Commerce Secretary Stefan Pryor), U.S. Senator Cory Booker (D-NJ) is pushing for federal legislation that would, de facto, kill the now proposed Paw Sox financing scheme.
Booker and U.S. Senator James Lankford (R-OK) are sponsoring the bipartisan legislation that would prohibit teams from using municipal bonds - whose interest is exempt from federal taxes - to help finance stadium construction.
Booker and Raimondo were college classmates and have been strong supporters of one another. And, Pryor -- who drafted the PawSox’s $83 million financing scheme -- worked as head of economic development for Booker when he was Mayor of Newark New Jersey.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTOn Thursday of last week, the Rhode Island State Senate held its first of six public hearings. The first four hours of speakers were loaded with supporters of the draft legislation that would provide $38 million in bond financing by the State of Rhode Island and the City of Pawtucket. Opponents were first allowed to speak at the hearing, which started at 6 p.m. - after 10:00 p.m.
Federal Legislation
“Professional sports teams generate billions of dollars in revenue. There’s no reason why we should give these multi-million-dollar businesses a federal tax break to build new stadiums,” said Booker. “It’s not fair to finance these expensive projects on the backs of taxpayers, especially when wealthy teams end up reaping most of the benefits.”
According to the Senators, since 2000, 36 professional sports stadiums have been constructed or revamped under financing provided by federal tax-exempt municipal bonds, costing taxpayers over $3.2 billion.
Despite billions of dollars of federal funding flowing toward these projects, stadiums have proven to have limited to no impact on local economic development. In fact, twenty years of research finds that “there is no statistically significant positive correlation between sports facility construction and economic development,” particularly across income growth or job creation," said the Senators.
For definition purposes, “A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures, including the construction of highways, bridges or schools (or baseball stadium)."
For the two U.S. Senators, their complaint zeroes in on the loss of federal tax revenue, which they estimate to be more than half a billion annually.
“The federal government is responsible for a lot of important functions, but financing sports stadiums for multi-million—sometimes billion—dollar franchises is definitely not one of them,” said Lankford. “Using billions of federal taxpayer dollars for the subsidization of private stadiums when we have real infrastructure needs in our country is not a good way to prioritize a limited amount of funds. I’m pleased to work with Senator Cory Booker to introduce this bill to eliminate the use of federal tax-exempt bonds for sports stadiums. Everyone likes free federal money to build their expensive stadiums, but with $20 trillion in federal debt, this is waste that needs to be eliminated,” said Lankford.
No Positive Economic Impact of Sports Stadiums
The Brookings Institution’s report found that, in part sparked the federal legislation, “The evidence for large spillover gains from stadiums to the local economy is weak. Academic studies consistently find no discernible positive relationship between sports facility construction and local economic development, income growth, or job creation.”
The report goes on to say, “Articles published in peer-reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.”
Booker is considered to be a leading Democratic contender for President in 2020.
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