Wisconsin Gov. Scott Walker took a break from the presidential campaign trail Wednesday to commit $250 million in taxpayer money to pay for a new arena for the Milwaukee Bucks.
Walker’s come under a lot of criticism from both left and right for his arena funding plan, including an article I wrote at the Huffington Post after he defended his plan on ABC’s “This Week.” Such deals are paid for by average taxpayers to benefit millionaire players and billionaire owners. But millionaires and billionaires have more influence than average taxpayers, and the pictures around stadium deals are great:
Calling the new NBA stadium a “dynamic attraction for the entire state of Wisconsin,” Walker signed the bill at the Wisconsin State Fair Park surrounded by state lawmakers, local officials and Bucks team president Peter Feigin.
The economics, not so good. Walker has claimed a ”return on investment” of three to one, which he says is “a good deal” for the taxpayers. Economists disagree. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed D.C. stadium subsidy, “The wonder is that anyone finds such figures credible….
Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.
Republican voters are looking for fiscal conservatives and straight talkers. We’re hearing a lot of denunciations of corporate welfare and crony capitalism. And here’s a leading conservative candidate for president sitting down in front of cameras to sign a bill handing $250 million in taxpayers’ money (Bloomberg says $400 million with interest) to wealthy owners of a sports team (some of whom, no doubt coincidentally, are large donors to his campaign), in defiance of free-market advocates and virtually all economists. Will the other Republican candidates take him on? Will they denounce this wasteful extravagance?
Or will we have to rely on John Oliver to do the job small-government Republicans ought to be doing?
And then we get to the empty promises of investment returns, which Walker ludicrously estimates will be 3-to-1. At this point, the literature debunking the purported benefits that stadiums bring to local economies is too extensive to list at once. But to review: Initial estimates almost always understate true costs; the jobs such projects create are part-time, seasonal and temporary; money spent in sports stadiums is money that would have been spent elsewhere; and arena revenues and signage deals tend to line the pockets of team owners, not public coffers.
It's this economic reality, coupled with some questionable political ties, that has brought together liberals, conservatives and libertarians in opposition to Walker's stadium deal. Walker's association with Jon Hammes, a Bucks minority owner and the national finance co-chairman for the governor's presidential campaign, has raised eyebrows on the left. Lasry's involvement in fundraising for Hillary Clinton has raised objections on the right. Libertarian groups like the Cato Institute have joined the chorus of those calling this what it is: corporate welfare.
Walker's numbers are bogus. The deal is a scam... just another conjob misappropriation of public funds for Walker cronies.
