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Financing Tucson's New Baseball Stadium Has Some Unseen Consequences.
By Emil Franzi
OPENING DAY AT the new Tucson Electric Park has brought
forth a torrent of puff from all of the local media, and there
are clearly thousands of baseball fans happy as little clams about
the new sports palace the taxpayers have provided and whose operational
losses they have guaranteed. But there's a big economics lesson
here our local pols and business types need to learn.
It's called the principle of the seen and the unseen, and was
illustrated years ago by economist Henry Hazlitt, one of the great
gurus of the free market, so this isn't some pinko whine. He used
the illustration of the broken store window.
Vandals smash a shop window and what do you see? The glass company
replacing it. Pretty good deal for the glass guy--in fact, under
methodology used until recently, that was considered a contribution
to the gross national product. And the shop owner was probably
insured. That's what you saw.
What you didn't see was the incremental increase in everybody's
insurance premiums to replace the window, if it was insured, and
the deductible eaten by the shop owner--money he was going to
use for something else, like a new suit. You didn't see the suit,
nor notice that the glazier's gain was the tailor's loss.
That principle applies to the $37 million in taxes spent on a
brand new, top-of-the line baseball stadium and thousands of happy
fans enjoying something paid for by others, with the profits going
to out-of-town team owners whose financial risk is zilch. What
you don't see is the other things taxpayers could've done
with that $37 million.
That tax revenue comes from rental car surcharges, hotel bed
taxes, and a little from the controversial RV Park taxes, all
designed to hit up people who don't live here. The Legislature
passed those taxes for the sole purpose of funding stadiums, proving
they're just as ignorant as our local pols.
There's nothing wrong with making money off of travelers. If
you don't, why would you want them? But other places gouge them
for the benefit of all their locals. When I pay 18 percent on
a car rental at O'Hare Airport in Chicago, trust me, Richard Daley
II doesn't cut Jerry Coangelo in on the action. The White Sox,
the Cubs, the Bulls, and the Bears are on their own, too. The
Bears threatened to leave Chicago unless the city built them a
new stadium, and Chicago told them to shove it. Despite the Windy
City's other problems, it's nice to see a city that knows how
to act like one.
Our local leadership is so bush-league it thinks that taxes collected
from tourists should be used solely for attracting more tourists.
Other places have more sense.
Check the Nevada state budget: Over half that state's income
comes from gaming and entertainment. Nevada has very low taxes
for people who live there for that reason. Nevada does not build
new casinos with tax revenues so more people will come so they
can build more casinos with their money. They let the private
sector do that and collect their piece of the take for the citizens
of Nevada. We could do the same here.
We see the new stadium. Here's just some of what you don't see
that we could've bought with that $37 million:
- Between 15 and 20 new high- school sites. We're having
the battle of the decade over pygmy owls on one lousy $2 million
site now, while our schools are overcrowded.
- At least seven or eight new libraries, some of which could
even have books.
- Arts groups in a bind? Thirty-seven million bucks would
cover the entire budgets of Arizona Opera, the Tucson Symphony
Orchestra, Ballet Arizona, and Arizona Theater for about four
years. And I bet they have a higher combined attendance than baseball
spring training.
- You could cover between 100 and 200 life-saving transplant
operations, depending on complexity, that the Arizona Health Care
Cost Containment System currently denies.
- If you just took the money and bought some other jurisdictions'
bonds with it, with the resulting interest alone you could replace
all the after-school programs that have been cut by local school
districts. Or you could give a lot of teachers, nurses and cops
a raise.
- And if you're a real free-market type who doesn't believe
the government should do squat, you could give everybody a tax
rebate of close to $200 for a family of four.
Kinda makes you wonder what the bastards do with the over $2
billion a year they spend in all those local jurisdictions now,
doesn't it?
In the meantime, play ball!
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