Now that two downtown Atlanta churches have agreed to sell their property for a combined price of $34 million — including $6.2 million from taxpayers — the last major obstacles appear to have been removed for construction of a new Falcons stadium to replace the archaic, verging-on-collapse Georgia Dome. (I know, I know …. I’m kidding.)
The success of the negotiations has to be considered a tribute to the diligence and salesmanship of Atlanta Mayor Kasim Reed, who kept on plodding even through those periods when the talks appeared doomed. However, even Reed can’t dispel the notion among a lot of his constituents that overall, the deal represents badly misplaced public priorities at a time when a lot of people are hurting and in real need of help.
Under the deal, roughly a fifth of the $1 billion construction cost for the new stadium will come from a tax on hotel and motel bills in the city of Atlanta and unincorporated Fulton County. Once you include repayment of both principal and interest on the 30-year bonds sold to finance that $200 million, taxpayers will have kicked in some $450 million to retire those construction bonds on the Falcons’ behalf.
In addition, that room tax is expected to generate considerably more revenue over the next 30 years than will be needed to pay back bond buyers. That additional tax revenue — up to another $450 million by some estimates — will also be dedicated to the Falcons’ use in operating and updating the new stadium. That adds up to some $900 million in subsidy over the 30-year terms of the deal, with the Falcons keeping most of the revenue generated.
And why are the Falcons insisting that taxpayers subsidize what is an already profitable team, in what is already a hugely profitable league? For the same reason that most other NFL teams demand and get the same treatment: Because they can. Even though repeated economic studies have shown that such deals are bad public investments, cities and states around the country continue to dump money into them anyway.
Compounding the problem, special language inserted into federal law by Congress decades ago allows the National Football League to operate as a non-profit entity that pays no federal income taxes. (Individual franchises, on the other hand, do pay taxes.) Among other things, that federal tax-exempt status allows the league to borrow money at a lower rate, which it then lends to teams such as the Falcons for their stadiums. So that’s yet another way the new facility is being subsidized.
As a condition of that non-profit designation, the league is at least obligated to reveal what its key officials are paid, which is how we know that the “Non-profit Football League” pays Commissioner Roger Goodell some $30 million a year. A chunk of that no doubt comes indirectly from taxpayer subsidies demanded by teams around the league.
In the current issue of The Atlantic, Gregg Easterbrook documents some of the sweetheart deals negotiated by teams around the country. However, the most telling anecdote in the Easterbrook piece involves the NFL’s 2008 lobbying push to get itself exempted from having to disclose the salaries of its top people. In other words, it wanted the tax-exempt benefits of that status but none of its obligations to the public.
Easterbrook writes:
“During the lobbying battle, Joe Browne, then the league’s vice president for public affairs, told The New York Times, “I finally get to the point where I’m making 150 grand, and they want to put my name and address on the [disclosure] form so the lawyer next door who makes a million dollars a year can laugh at me.” Browne added that $150,000 does not buy in the New York area what it would in “Dubuque, Iowa.” The waiver was denied.
Left no option, the NFL revealed that at the time, Browne made about $2 million annually.”
I have no idea how you make shameless arguments like that with a straight face, but apparently, the talent is rare enough that they’re willing to pay people who have it $2 million a year or more.
