As the stadium economics turn

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Prospect Profile: Melvin Croussett

As the new Yankee Stadium near completion and the date rapidly approaches for the NYCIDA to determine whether or not the Yankees and Mets deserve another round of tax-exempt bonds, more stories are coming out that don’t portray the latest bond request in the latest light. Before we get to those, however, let me give some air time to the Yankees.

Earlier this week, Darrell Rovell interviewed Randy Levine about the state of Yankee economics, and the two got to talking about the stadium. Since CNBC doesn’t allow embedding of their videos, watch the video by clicking below.

Rovell posted a transcript of the interview on the CNBC website. The relevant part from the Yanks’ team president:

We’ll, I’d like to make this very clear. The way this stadium is being constructed and financed, every single penny, every single penny, is going to be paid for by the New York Yankees. There are no taxpayer funds that are being used to fund this stadium, which is different from 99.9 percent of stadiums all over the world. No taxpayer money will be used to fund this stadium. The Yankees are funding the entire bill of the construction and, unlike today, the maintenance and operation of the stadium. The Yankees are on the hook, there’s no liability for the city or any governmental agency. So this is a $1.3 billion investment in the poorest congressional district in the country. It’s the largest investment in the Bronx and, in these hard times, this has generated over 6,000 construction jobs by moving us across the street from the old Yankee Stadium to the new Yankee Stadium, we’re going to create approximately 1,000 new jobs. So this is a good thing.

In one sense, Levine is arguing semantics. In another sense, he’s flat-out wrong. I guess it’s not inaccurate to say that taxpayer money isn’t being spent on the stadium itself. Tax-payer money is getting spent on infrastructure improvements in the South Bronx, but those do have a value to the community. Whether the South Bronx, though, needs more parking lots is up for debate. The Metro-North stop is a wise and overdo investment.

Levine’s statement is not quite accurate though because the city isn’t getting money it should be getting through taxes if they continually grant the team tax-free bonds. I’m certainly not opposed to an initial outlay of tax incentives for construction, but at some point, that outlay has to stop. When the team wants more bonds to cover cost overruns and items such as bathrooms, suites, fancy video boards and team offices. Clearly, at this point, the team should be awarded taxed bonds. Enough is enough.

Meanwhile, I’d challenge Levine on the job statement too. This work has generated a bunch of temporary construction jobs, and that’s good. That “1000 new jobs” figure, however, is completely inaccurate. According to a recent examination of the Yanks’ own bond application (available here as a PDF), the stadium will generate a whopping 22 new permanent jobs, and the taxpayer subsidy would be around $2 billion if this latest round is approved. An economic stimulus it is not.

Now, I know many people are fine with subsidies for the stadium. To a extent, I am too, but not to this extreme. The city needs the taxes, and the Yanks shouldn’t get any exemption that others constructing $2-billion buildings wouldn’t get. It’s just bad government.

Hat tip to iYankees on the Darrell Rovell interview.

RAB Live Chat
Prospect Profile: Melvin Croussett
  • radnom

    OH man, Pavano quote.

    Post it. Post it.

    • steve (different one)

      just saw that. give me a break.

    • VO

      i guess paying his salary wasnt enough? i guess making a creative nick name like American Idle wasnt enough? I guess not making him pitch injured cause he was a total retard who probablly prentended to be injured wasnt enough?

  • JK

    So let me get this straight…

    80-100% public funding of stadiums in the past were perfectly fine but the city missing out on 8%-10% of the bond investors interest income due to their tax exempt status is a crime?

    This is the biggest farce I have ever seen reported. These idiots are reporting this story as if the Yankees are getting free money and are getting huge tax breaks too.

    • tommiesmithjohncarlos a/k/a Ridiculous Upside

      Regardless, the city and state are currently in a massive budget crunch, the Stadium is already up and hence, there’s zero chance of the Yankees abandoning the project, and the team has already signed a non-relocation agreement, meaning the Yankees have absolutely zero leverage to force the city or state to do anything at all for them.

      They’re asking for an additional half billion in tax free bonds. New York City and State could most definitely use the tax revenues generated on those bonds over the next 30 years or so. Why not force the Yankees to take out taxable bonds? We (the citizens of New York City and State) have us (the Yankees) right where we want them, now.

      Even if you feel that the Yankees were totally justified for their previous requests (which I don’t), you can’t justify an additional 450M of tax-free bonds now.

      • Ed

        What makes you think the city would see any significant revenue if the bonds were not tax free? The city would only see tax income from the bonds are held by residents of the city, which is not at all a given.

        • tommiesmithjohncarlos a/k/a Ridiculous Upside

          The city needs every penny it can find. Doesn’t matter if all of the 2B isn’t taxable by the NYC, some of it would be.

      • Old Ranger

        Money generated by the new stadium will bring in tax $$$. Besides, the City should try doing the same as we do in tough times…cut the damn budget.
        Also, Ed is right, the income from the bonds would go to those that hold them…the people!

  • Jamal G.

    So, what kind of ripple effects do all these more-than-questionable bond approvals create?

    • Ed

      They allow the city/state to say to the Yankees “The work must be performed by NY based businesses, at least x% of the workers doing the work must live in NY, and at least y% of the materials used must be purchased from NY based suppliers.” The city/state is then guaranteed that most of the money spent on the project stays within the NY/NYC economy and generates tax revenue for the city and state.

      Without these bonds, the Yankees would have a harder time securing financing due to the tough economy, and would likely have to cut portions of the project. The remaining work would mostly be done by NJ or CT based businesses, and the materials would be obtained wherever they could be found cheapest. The stadium would end up with less luxuries, and most of the money spent will have left the NY economy.

      • Buffalo Ed

        Ed you are dead on. The amount of interest generated is negligible next to the money being spent in the Bronx for the Stadium. The Yankees are really paying for this this out of their pockets. That is very rare for a team these days, but it should be the norm.
        We should worry about why the size of our government is larger even though there are fewer people in the State. Why our spending goes up every year even as people leave in droves.
        The Yankees are a welcome diversion from the inept government – City and State – we continue to elect.

      • JeffG

        I’m not sure there would be short cuts taken to complete the stadium. I just imagine the Steinbrenners would be taking in less profits over the next several of years. FA’s, players union better lobby for us.

        The main difference between getting taxed vs. tax free bonds is that if they are tax free the Yanks could offer the bonds at a lower percent of interest and thus pay less in financing cutting their liabilities.
        When tax free bonds are put on the market buyers would expect less of a yield for a similarly rated bond seeing that they calculate their tax savings and still may come up with a better deal.

  • JK

    Jamal G,


    400M in newly issued municipal debt is a drop in the bucket for states like NY & CA.

    • tommiesmithjohncarlos a/k/a Ridiculous Upside

      You obviously didn’t hear the State of the State or hear Patterson’s budget.

      Both NY and CA are major-leagued fucked economically right now, as is the entire country. The Yankees are rich. The city helped make them richer. It’s time for the Yankees to be less greedy.

      • Old Ranger

        The Yankees earned their money by taking chances with their own money. In other words, they spent their money to make money…why do they have to share it with anyone?
        If you have a job and get payed, would you want the gov. to take half of it and give it to me…because I am to lazy to work and think I am entitled to it? And don’t give me the old rhetoric of “they can’t get a job”…I am older then 99% of the people and I have two jobs. I have heard that excuse (for raising Taxes for over 50 years).
        $1.3 Billion is a lot of money being fed to companies and people working on the stadium. He is right 99.9% of the new stadiums are mostly paid for by the city/state. At least the Yanks are paying for the place…so, one could say the Yankees are saving the Gov., $1.3 billion.
        Oh, come summer I stop working, gotta go fishing and watch the Farm Hands play. Speaking of work…I’m off, see ya!

    • tommiesmithjohncarlos a/k/a Ridiculous Upside

      Also, to keep The Honorable Congressman Mondesi and myself from having an aneurism, please use the “reply to this comment” link at the bottom of each post. It’s ever so much more civil.

      • The Honorable Congressman Mondesi

        You’re a peach.

        • UWS

          Get a room already, you two!

          • The Honorable Congressman Mondesi

            Oh hey UWS, I forgot you were back from vacation, too. Funny how that worked out. Convenient.

            • The Honorable Congressman Mondesi

              (Sorry to whoever originally made that joke that I just totally ripped off.)

          • tommiesmithjohncarlos a/k/a Ridiculous Upside

            Hey UWS, did you see my response to your comment from the other day?


            • UWS

              No, I missed that. Aww, you’re so sweet.

              But Mondesi might get jealous.

              • The Honorable Congressman Mondesi

                Jealousy is not an emotion that is in Raul’s arsenal.

                • tommiesmithjohncarlos a/k/a Ridiculous Upside

                  Apparently, the third person voice is, though.

    • Sweet Dick Willie

      400M in newly issued municipal debt is a drop in the bucket for states like NY & CA.

      While this is technically a true statement, by granting those tax-free bonds to the Yankees, the City is depriving some other (possibly more deserving – although with the corruption in City gov’t, that’s not a given) entity of those bonds.

      • Buffalo Ed

        That is untrue. These bonds will stop nothing from happening in the city. The yankees are a much better credit risk than the City.
        Agree with corruption comment yet we continue to elect these people…

  • Manimal


    Carl Pavano:
    “When you’re down, you expect your organization to pick you up, not kick you when you’re down. I’ve had to pick myself up quite a few times the last four years.”

    What a fucking baby.

    • whozat

      In a cage-match between Carla and a baby, I would definitely put my money on the infant.

      • VO

        of course the todler would win, he would be to busy thinking of fake injuries, i hope by he knows by saying tht hes guna get murdered by ny

    • Yankee1010

      But hey, at least he redeemed himself with this – “There’s no reason for me to focus on what happened to me, because that’s all behind me. I’m not holding any grudges. You just keep moving forward.”

      May holy Hell rain down on this D-Bag.

      • Frank

        Stay classy, Carl.

  • A.D.

    22 Full-time jobs, but many more in part time jobs… which is something.

    • tommiesmithjohncarlos a/k/a Ridiculous Upside

      Yes. Is that something worth 2 billion worth of lost taxability for the city and state? Perhaps not.

      • A.D.

        I’m curious in that 2B figure, I’ve seen mixed reports, other articles have it at some 600M in lost revenues. Ben or TSJC is there an actual explanation somewhere where they breakdown the 2B?

      • Chris

        Let’s be clear – it’s not $2B in lost taxability. The city only loses out on taxes on the interest to that $2B that is paid to city residents. That comes out to about $7M per year in potentially lost revenue for the city – most likely less because most of the bond holders will not reside in the city.

      • Ed

        The city/state would only get to tax the interest on bonds held by residents of the city/state. That’s only going to be a fraction of the money.

        The IRS is the only entity that would be seeing the full value.

    • The Honorable Congressman Mondesi

      How many more jobs, though? Or, more accurately, how many more jobs than existed when they played across the street in the old Stadium?

  • Andy

    Please, stop these stories about the economics of the stadium. Usually, you guys are homers, but this is ricockulous.

    First, you are the one “misstating” the facts – the taxpayer subsidy will NOT be $2 billion, or anything close. They are getting $2 billion in tax-free bonds, there is a huge difference.

    Second, most stadiums are funded directly by the taxpayers, with the city paying a large chunk of the actual construction costs. The Yankees, to their credit, are going about it a different way, and one in which, in the end, the taxpayers will save more money than they would have had the Yankees followed standard operating procedure and had a large part of the construction costs paid by the city.

    Third, by attacking the Yankees on this issue, you are perpetuating the stereotype out there that the Yankees are the “evil empire,” when in fact they should be lauded for not going to the city to put up money for the actual construction, like everybody else does.

    Fourth, this may be your pet peeeve, but it is BORING. I love you guys, but please, stick to baseball.

    • The Honorable Congressman Mondesi

      “Ricockulous.” OMG. Hysterical.

      I enjoy these posts, and judging by the response to them, it seems like other people read and enjoy them as well. Nobody has to stop writing anything just because you don’t like it.

      • Andy

        Can’t claim to have made that up, got that word from an Infectious Grooves album. Worth checking out if you want to be amused while listening to speed metal…

        • Andy

          Oh and I read the post because I have nothing better to do, obviously.

    • UWS

      Dude, if you don’t like these stories, don’t read them. It’s very easy to scroll past them. Seriously.

      • NY Yankee Fan

        The money spent by the Yankees is helping the City and State of New York. When we were in the great depression, one of the tools used by the government to keep people fed were to hire them as temporary workers for public works projects. That ” a whopping 22 new permanent jobs” will be created is irrelvant to the thousands of people that are putting food on tables for their families to eat and roofs over their heads in these horrible economic times. In fact, this is exactly the perfect time for stadiums to be built. If the Yankees want to borrow more money to handle cost overruns so that more blue collar jobs exist for a couple of more months, then the City and State should assist them in making that happen. But we should keep in mind, every dollar that is borrowed will eventually have to be paid back.

    • tommiesmithjohncarlos a/k/a Ridiculous Upside

      Second, most stadiums are funded directly by the taxpayers, with the city paying a large chunk of the actual construction costs. The Yankees, to their credit, are going about it a different way, and one in which, in the end, the taxpayers will save more money than they would have had the Yankees followed standard operating procedure and had a large part of the construction costs paid by the city.

      The flipside of that is that with publicly financed stadiums, the cities own them and generate revenue from them via leases or portions of the gate (or special events like concerts and such). The Yankees owning the stadium means the city gets nothing from the Yankees money mint going forward, and the city also forfeited rights to collect property taxes on the land underneath the new stadium.

      In exchange for allowing the team to build a new building across the street, the city basically:
      A) spent millions and millions of dollars building new infrastructure to support a private industry facility that generates no additional revenue for the city
      B) spent millions more dollars demolishing the old Stadium, which is now virtually worthless
      C) forfeited all its natural municipal rights to generate any type of financial benefit from the areas in question
      D) forfeited all its natural municipal rights to generate any type of financial tax revenues from investors associated with the project
      E) lost a considerable amount of parkland for the residents of the South Bronx, already a heavily congested area prone to asthma and chronic heath problems for its residents
      F) allowed the team to reneg on its promises to use NYC contractors and laborers to build the stadium, thus failing even to create jobs for city residents (or capture the income tax benefits thereof)
      G) possibly criminally overvalued the land in the project to further ensure its approval and bolster its case for ratification.

      All for a building that, while nice, is utterly unnecessary.

      • Andy

        Is that all? Man, that sounds like the cleanest construction job the city has ever seen…

        I did love the part about the asthma problems – that damn evil empire!!!

        • tommiesmithjohncarlos a/k/a Ridiculous Upside

          I did love the part about the asthma problems – that damn evil empire!!!

          Go spend a day in Bronx Lebanon Hospital before you joke about asthma in the South Bronx. It’s a serious problem.

          The Yankees promised to replace all the parkland they displaced in the project. Not only aren’t they going to do that, half of the replacement “parks” they’re doing are FieldTurf and not grass, and one of them is atop a parking garage.

          Do you want your kids playing on synthetic grass atop a parking garage with exhaust fumes wafting up into their games of tag?

          • JeffG


            – never had the urge to do that BS but it kind of felt good.

          • Old Ranger

            I’m back back back…
            Come on tsjc…
            I understand where you are coming from, hell, I’ve spent a lifetime going head to head with the Libs. way of thinking. There is no way anyone will change the way you think (or I) I think a big clue into your thinking was the name you use.
            As with all of us, we always think we are right. The politicians in this state (and DC) are so inept (all the while thinking otherwise) and dumb, they let a dumb (to them) real life businessman pull one over on them. Yet they think they know how to run the auto industry better then the people in the business.
            Hell most of those guys don’t even know what is in the bills they pass…the staff does, but they don’t.
            Not meant to be derogatory, just semi-facts.

        • E-ROC

          I don’t know much about this topic because I don’t live in New York, so I usually refrain from posting on such topics. Asthma is serious disease. Let’s joke about that. Asthma can lead to lung infections which can lead to a collapsed lung which can lead to a person being laid up in the hospital for a week or so, or something worse happens. I know this because my daughter has asthma. She is Singular, Albuterol, and Pulmicort (steroid). Go watch a kid’s chest retract as that person tries to breathe.

      • NY Yankee Fan

        Yankee Stadium is located in one of the poorest congressional district in the entire United States. In these areas, the City of New York (as has many municipalities) regularly sells land to developers for as little as $1 so something of value can be built. The Yankees wanted to move their team into Manhattan, which was ultimately opposed successfully. Particular opposition came from on the grounds that the stadium anchors the job market for this area. It is simply off base to contend that as a result of the stadium being built that the the City has, among other assertions, “forfeited all its natural municipal rights to generate any type of financial benefit from the areas in question” and “generates no additional revenue for the city.”

      • JeffG

        “Spent millions and millions of dollars building new infrastructure to support a private industry facility that generates no additional revenue for the city” – Can’t wait to ride the free train.

        Infrastructure projects will be created all over the US this year. People that work do contribute more than the 7.2% that are currently unemployed.

        Plus making it easier for people to come into the city spend their money in the local economy will create additional revenue.

        I’d even argue the Yanks are acontributing to NY “going green” – less congestion getting to the game = less CO2.

        Ultimately, being serious for a second. I do think the Yanks, as a business, do not take advantage of their position more than other sports franchises throughout the country.

        Viewed as a whole you’d have to admit the Yankees have contributed more to NYS than if they were not here or in the Medowlands where people are taxed less. On a very simple level I do not find fault with reaping a bit of reward for that.

        Last there are many other areas of govt. abuse that are crippling to the States health – it is just that the name Yankee brings attention to a large section of the public that does not care to – that makes this a news issue.

        • Old Ranger

          Good post JeffG.

    • Buffalo Ed

      Amen Andy. Didn’t we sign a pretty good first baseman recently. Miranda I think??

  • JK

    lol, it cost the city 10-15M annually to maintain the old Yankees stadium. The annual NY state income generated on 1.3B 40 year municipal bonds @ 5% interest is slightly over 3M per year.

    This story is a complete JOKE!

    • tommiesmithjohncarlos a/k/a Ridiculous Upside
    • tommiesmithjohncarlos a/k/a Ridiculous Upside

      Members of New York State Government don’t seem to think it’s a joke.

      I’ve been to tons of hearings/conferences on this, and other similar topics. IDA corruption and mismanagement is a gargantuan problem in New York State. Yankee Stadium is only one of many projects where billions and billions of state and city dollars go towards construction projects that have little to no benefit to the residents of the area. Saying this shouldn’t be a concern to a state in the midst of a massive budget crunch is foolish.

      We’ve given the Yankees free financing and poured millions into new construction projects for something that creates 22 jobs and prevents the city from making money on (or using) publicly owned land into perpetuity. This deal was horrid for the city and the state. The only winners here are the Yankees.

      If you think the Yankees don’t benefit by having the bonds issued tax-free, why do they keep asking for tax-free bonds?

      • NY Yankee Fan

        The money is not coming out of the State Fisc and misrepresenting that “billions and billions of state and city dollars go towards construction projects that have little to no benefit to the residents of the area” will not make it so. In case anyone wants to read about the stadium financing, here is a pretty generic site (for the good and the bad):

      • Old Ranger

        If you have gone to all those hearings etc., you’re wasting your time. Nothing is going to change as long as the people are corrupt…have you ever seen a middle class politician? Not likely, their hands are out from day one.
        If one thinks Chi., politics are bad…one must look past their nose. It is the same everywhere, just more prevalent in some places.
        Let’s face it, NYC and State got taken to the cleaners by the Yankees using the same system the politician’s set-up.

  • Sweet Dick Willie

    Ben –

    Just out of curiosity, how does the Yankees funding of their new stadium compare with how the Mets are financing their new home?

    • Ben K.

      I don’t honestly know. The person to ask on that would be Neil de Mause. I think the city is more involved there but they owned Shea Stadium, and in Queens, they’re simply turning a parking lot into a baseball stadium instead of parkland into a stadium.

  • bottom line

    This is really close to a non-story, given the Yankees commitment to build and to fund construction in an area that most would shun. As a journalist, I know it’s nice to feel you’ve got your teeth into a big story — but this just simply ain’t.

  • huuz

    does anyone on this site (authors/commenters) actually truly understand the finances and mathematics behind this whole thing? I do not. But i also have not seen any rigorous analysis on this matter…only hand waving and moral platitudes.

    i’m excited to see anything that can be submitted by someone…

  • JK

    If Bloomberg wasn’t running for re election no way in hell is this getting covered in the same manner because his political opponents wouldn’t be trying to use the issue as ammo in the press.

    They are making a big stink over the annual income on taxable bonds the equivalent of what Hawkins made on the Yankees last year…


    Give me a break!

  • JK


    The only benefit for the Yankees from getting tax exempt bond financing is that they pay much lower interest rates because out of state (non NY residents) municipal bond investors don’t have to pay NY state taxes (8-10%) on their interest income.

  • Januz

    Once again RAB beats this story to death, sort of like what happens to a dead horse. The problem with this, is they help give the real Yankee Haters (Like those found at Yawkey Way, Camden Yards, the NY Daily News & ESPN) “ammunition” to trash this team over all the advantages they have real & perceived. Concepts like the oppressed little Red Sox, who play in a classic stadium, and can’t compete against the “greedy”, “Evil Empire” in the Bronx are given a lot of publicity in the national media.
    I am glad Randy Levine and company are not taking the “Politically Correct” approach and feeling sorry for Yankee critics (Those guys have despised the Yankees ever since the 1920’s, because of jealousy). The goal should be to become the best at anything you attempt. It does not matter if it is signing free agents, developing a farm system, or building the best Stadium possible.
    I know there are some who think that a capitalistic system is wrong, but here is a little quote………. “Democracy is the worst form of government except all those other forms that have been tried from time to time” (Winston Churchill). The same thought applies to capitalism. I want people striving to best the best, instead of having a failed socialistic system out of pity for others who can’t cut it. That is the Yankee approach, and thank GOD for it.

    • Tony S

      good thoughts

    • Old Ranger

      Great, like the Winston quote the best…because it’s true. It has worked for over two hundred years…while others have failed, time and again.
      Enough of this…let’s write about baseball. Hows dem-dare Mets’? Oh, wrong place…just like politics!?!?!

  • Peter Quintiliani

    Realy? wtf

  • Tony S

    Ben you are making stronger arguments – I may slowly see your point


  • tim

    …OK…enough with the misunderstanding of tax exempt bonds…

    let’s say i own a company, and i issue bonds. for my industry and financial condition, let’s say 8% was a competitive rate for me to pay.

    YOU buy one of my bonds, priced at $100.00…which really means $1,000.

    YOU give me $1,000.
    ever six months, I give YOU $40. (8% of $1,000 is $80/2 times a year = $40)
    UNCLE SAM says you, in the 25% tax bracket, owe him $20 (the last dollar of income you made was from this bond, so $80*25%=$20).
    in essence, you made $60 after tax dollars.
    for the LAST payment, in 10 or 30 or however many years, you get $1040. your biannual payment PLUS par, or the original $1000. You no longer get any payments–i’ve paid the IOU. And since you bought it and sold it at the same price, no other taxes.
    If the city of New York, a MUNICIPALITY, issues a bond–A TAX FREE BOND–you the bondholder doesnt have to pay taxes on it.
    NYC sells a 100.00 bond with a 5% coupon (the rate they pay is called the coupon). You get $25 every six months…BUT you don’t owe any taxes on it…lets say this time, you are in the 35% tax bracket…if you had bought the corporate bond, you would have owed 8*35%=$28 in taxes PLUS IF you live in NYC, you would owe NY state taxes (6.8%) PLUS NYC taxes (3.6%) for a total of 45.5% (whew).
    On the $80, since it was taxable, you would net $43.60.
    On the $50, since it was tax free, you would net $50.00
    (if you are a CPA, Lawyer, CFP, please dont bring up AMT. its late, and i’m tired!)

    TO WIT:
    the state and city ARE technically losing taxable revenue, IF you assume anybody who bought a Yankees bond would have otherwise bought a taxable, corporate bond. IN REALITY the would have bought some other tax free bond…they could have just as easily bought a triple tax free bond issued by anything in Puerto Rico and had the same tax situation, and probably a higher rate.

    The fact that the Yankee’s rate was lower than the Met’s implied to many analysts (its like a reverse auction…the more interest, the lower the rate) that most investors just ‘wanted’ the Yankee issue more regardless of rate.

    SO PLEASE…give it up.

  • drdr

    Let’s do the math for $1B in bonds:
    For tax-exempt bonds (5%), NYY have to pay $50M to bond-bearers every year and secure full $1B by the end of 40 years (usually it is done by putting equal REAL (i.e. adjusted for inflation) sums in a fund, that is invested in something secure).
    For normal bonds, 8% interest rate, NYY have to pay $80M to bond-bearers every year and secure full $1B by the end of 40 years. If we assume that everyone who bought it would be in 35% bracket, federal government would get $28M, NY state $5.44M and NYC $2.88M annually. Realistically, you can’t hope for more than 50% of bond-bearers to live in NY, and in all probability, at most $15M of taxes would be left to pay. So, NYY pay $30M less, federal government gets about $15M less, NY state about $3M less, and NYC about $1.5M less annually because of the tax-exempt bonds (other states and cities also lost some, depending on the place of residence of bond-bearers). NY state and NYC didn’t lose that much (yes, $3M and $1.5M annually is a lot, but based on standard efficiency of such budgets, most of that money would have been lost anyway). NYY profit a lot, because their rate is cut by about a third (depending on the payments to the fund).
    I’m not sure if NYY issued these bonds, or if NYC issued them on NYY behalf. In the later case, the amount that NYY have to pay to the fund will depend on the deal with NYC (NYC pays interest and bond value, and NYY gives money to city to cover those payments).
    The only real loss for NYC is the loss of opportunity to issue those bonds for something better.

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