One of my causes célèbres on this blog has long been some vocal opposition to way the Yankees have gone about seeking and securing money for the new stadium. While at this point, there is very little anyone can do about the way the stadium has been funding, I believe that it is important to understand why the funding process has been so flawed.
To that end, allow me to introduce a Daily News column by Paul Weinstein about the Yanks’ latest request for tax-exempt bonds. He writes:
According to an estimate by the New York City Independent Budget Office, the request for more bond authority will cost city, state and federal governments more than $80 million in lost revenues. This is happening, remember, at a time when the city can ill-afford to waste a single dollar.
It’s not just the literal dollars being spent that hurts; it’s the opportunity cost. New York City will lose $259 million in tax-exempt debt that could be used to fund other important projects – such as building more affordable rental housing or a new Moynihan Station. In 2009, according to the IRS, New York State will receive roughly $1.7 billion in tax-exempt bond authority for joint public and private ventures. If the Yankees’ request is approved, it will use about 15% of that allotment…
Worst of all, that $259 million in extra bonds will not create a significant number of new jobs at a time when New York is facing the worst economic crisis since the Great Depression.
Weinstein goes on to talk about how public support and financing for stadiums and arenas can be efficient as long as the proposed buildings are multiple-purpose venues anchoring distressed areas that serve as an integral part of the community. Considering that the Yanks have shouldered a significant portion of the construction costs, this is a prime example, he writes, of when public financing for a stadium should not be frowned upon.
Put he then takes the city to task for allowing the Yanks to return to the trough of public, tax-free bonds. “It is never a good idea to use public funds to cover costs not projected in the initial plan,” he writes. Doing so encourages government officials and sports franchises to hide the true cost of the projects and contractors to overcharge for their work.” That is, by the way, why New York has now changed its laws concerning the public financing of major construction projects.
I do take an issue with Weinstein’s central thesis. He claims that the Yanks’ spending on players — he throws out that misleading $420 million figure journalists love to throw around — means that they have the money to spend on stadium construction. That’s just a faulty claim though. The Yanks’ 2009 payroll should be marginally higher or the same as the one they had in 2008. That’s the number that counts, and it certainly doesn’t mean that they have $200 million lying around to cover stadium construction cost overruns.
In the end, I clearly do not support more public financing for the stadium. The City is already funding important infrastructure projects in the South Bronx area, and the team has received enough in tax-exempt bonds. The city has too many other important projects and not enough money to continue to dole out funding to the Yankees.