At a time when divisiveness seems to follow Americans like yellow jackets at a picnic, sports may be among the few anchors of unity left.
It can even get conservatives and liberals in the Utah Legislature to join hands behind public subsidies in the billion dollar range for stadiums, arenas and related developments.
It can spur talk of rare investments in Salt Lake City’s long neglected west side — something countless politicians have promised but never delivered.
It can even get conservatives and liberals in the Utah Legislature to join hands behind public subsidies in the billion dollar range for stadiums, arenas and related developments.
It can spur talk of rare investments in Salt Lake City’s long neglected west side — something countless politicians have promised but never delivered.
The state may be on the verge of acquiring a Major League Baseball and National Hockey League team. Excitement abounds, as if the area is about to join some exclusive club.
And yet, Utahns need to enter into this new phase of competition with their eyes wide open. These projects have two well-defined sides to them.
One of those sides concerns an old adage. Free money does not exist.
Politicians will talk about building facilities without raising taxes (or not much, anyway). But vast sums can’t be conjured from thin air.
One idea is to use tax-increment financing. This would take some of the new taxes generated by a stadium and surrounding commercial and residential projects in order to finance subsidies.
No tax hikes would be needed for this. However, it’s likely some of the commercial or residential development associated with the project would have gone somewhere else on its own along the rapidly growing Wasatch Front. That’s especially true given the current housing shortage. The taxes generated from those projects would have gone to local and state governments and schools, not to finance a stadium.
Also, there is talk of raising hotel and car rental taxes. This also would not directly affect locals. However, those taxes often are used to defray tourist-related costs, such as the need for a greater police presence or other emergency services, and to promote tourism itself. A higher tax on hotel rentals might actually hurt tourism.
Lawmakers also are talking about raising local sales taxes for a hockey arena. This could have a downward effect on sales in the city, however slight. As Rusty Cannon, president of the Utah Taxpayers Association, told a legislative committee hearing last week, “We can tip the boat and hurt our competitiveness if we’re not careful.”
And yet, the association is neutral on these ideas. And these arguments shouldn’t be the final word.
The other side has to do with a lot of intangibles.
As Karthik Vegesna wrote in the Berkeley Economic Review a few years ago, “I have realized that much of the true allure of sports is intangible. Rooting for your teams is largely based on where you live, and you derive a sense of belonging from being part of a community of irrational, borderline psychotic fans.”
You can’t put a price on that.
In this case, however, some of the promised benefits would be quite tangible. The west side of Salt Lake City might feel as if its ship has finally arrived, in the form of a baseball team. That was the essence of what that area’s state senator, Luz Escamilla, D-Salt Lake City, told reporters last week.
“The type of investment that we’re talking about is going to completely change the west side,” she said. “No one has ever invested in the west side. Ever. And if it takes bringing a team for that level of investment, I can tell you we are uniting forces within our community.”
Escamilla continued, “We have a criminal element, right now, in the west side, in that Jordan River area, and no one is going to clean it. And if bringing $3 billion into that area is going to change that, I want to see that in my district.
“That impacts, directly, the lives of thousands and hundreds of thousands of people. This is not just about a team coming. It’s about what it means to that community.”
A lot of economists have studied the impacts of stadium building in the United States. Governments have spent about $33 billion combined over the past 50 years to build them in the United States and Canada. Major sports leagues are monopolies that carefully control the number of teams, and that contributes to the rising costs.
Also, economic promises don’t always come true.
But even Andrew Zimbalist, a Smith College professor whose research has cast doubt on the value of such subsidies, acknowledged some possible benefits in a recent article.
“Sports teams bring people together and help to form communities,” he wrote for Econofact.org. “If a stadium project can come close to fiscal neutrality, then the cultural benefit may commend the project.”
Maybe a unique “Utah way” will apply to this, as it has to LGTBQ+ rights and religious liberties, immigration and other issues. But it will be up to Utahns and their representatives, no matter how unified they are over stadium funding right now, to make sure promises are kept.
And yet, Utahns need to enter into this new phase of competition with their eyes wide open. These projects have two well-defined sides to them.
One of those sides concerns an old adage. Free money does not exist.
Politicians will talk about building facilities without raising taxes (or not much, anyway). But vast sums can’t be conjured from thin air.
One idea is to use tax-increment financing. This would take some of the new taxes generated by a stadium and surrounding commercial and residential projects in order to finance subsidies.
No tax hikes would be needed for this. However, it’s likely some of the commercial or residential development associated with the project would have gone somewhere else on its own along the rapidly growing Wasatch Front. That’s especially true given the current housing shortage. The taxes generated from those projects would have gone to local and state governments and schools, not to finance a stadium.
Also, there is talk of raising hotel and car rental taxes. This also would not directly affect locals. However, those taxes often are used to defray tourist-related costs, such as the need for a greater police presence or other emergency services, and to promote tourism itself. A higher tax on hotel rentals might actually hurt tourism.
Lawmakers also are talking about raising local sales taxes for a hockey arena. This could have a downward effect on sales in the city, however slight. As Rusty Cannon, president of the Utah Taxpayers Association, told a legislative committee hearing last week, “We can tip the boat and hurt our competitiveness if we’re not careful.”
And yet, the association is neutral on these ideas. And these arguments shouldn’t be the final word.
The other side has to do with a lot of intangibles.
As Karthik Vegesna wrote in the Berkeley Economic Review a few years ago, “I have realized that much of the true allure of sports is intangible. Rooting for your teams is largely based on where you live, and you derive a sense of belonging from being part of a community of irrational, borderline psychotic fans.”
You can’t put a price on that.
In this case, however, some of the promised benefits would be quite tangible. The west side of Salt Lake City might feel as if its ship has finally arrived, in the form of a baseball team. That was the essence of what that area’s state senator, Luz Escamilla, D-Salt Lake City, told reporters last week.
“The type of investment that we’re talking about is going to completely change the west side,” she said. “No one has ever invested in the west side. Ever. And if it takes bringing a team for that level of investment, I can tell you we are uniting forces within our community.”
Escamilla continued, “We have a criminal element, right now, in the west side, in that Jordan River area, and no one is going to clean it. And if bringing $3 billion into that area is going to change that, I want to see that in my district.
“That impacts, directly, the lives of thousands and hundreds of thousands of people. This is not just about a team coming. It’s about what it means to that community.”
A lot of economists have studied the impacts of stadium building in the United States. Governments have spent about $33 billion combined over the past 50 years to build them in the United States and Canada. Major sports leagues are monopolies that carefully control the number of teams, and that contributes to the rising costs.
Also, economic promises don’t always come true.
But even Andrew Zimbalist, a Smith College professor whose research has cast doubt on the value of such subsidies, acknowledged some possible benefits in a recent article.
“Sports teams bring people together and help to form communities,” he wrote for Econofact.org. “If a stadium project can come close to fiscal neutrality, then the cultural benefit may commend the project.”
Maybe a unique “Utah way” will apply to this, as it has to LGTBQ+ rights and religious liberties, immigration and other issues. But it will be up to Utahns and their representatives, no matter how unified they are over stadium funding right now, to make sure promises are kept.
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