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:
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