Many Utahns are getting excited about the prospects of major-league sports expanding into Utah. As those discussions continue, it’s important for state leaders to remember that taxpayers shouldn’t be the ones footing the bill. The giant sports and entertainment complexes that politicians everywhere love to subsidize aren’t free, and the economic benefits of doing so rarely outweigh the costs.
A new proposal in the Legislature aimed at luring a Major League Baseball (MLB) team to Utah would do just that. Similarly, the Utah Jazz have been discussing the possibility of moving its arena further south into the valley for bigger and better facilities. Last week, the National Hockey League was pitched on bringing a professional hockey team and ice rink to Utah, as well.
There are few public policies that have been studied more closely or denounced more universally than taxpayer subsidies for sports stadiums. Economists on the left and the right agree. Communities in red and blue states, in cities and suburbs, have all learned the hard lesson that government-financed arenas almost always end up fouling taxpayers.
The jobs, economic development and tax revenue that stadium-subsidy advocates always promise almost never materialize. Many studies have found that subsidized stadiums actually reduce local economic growth. The promises inflate the benefits and conveniently exclude the costs like higher taxes and debt service or fewer resources available for other uses.
Utahns would do well to keep this fact — “one of the most consistent findings in economics” — in mind if and when lobbyists descend on Salt Lake City this year with their hands out for new arena subsidy schemes.
First, there is the ongoing drama of whether the Utah Jazz will leave the state capital for greener pastures south of the city. This will-they-or-won’t-they dance is standard operating procedure for professional sports franchises now. The respectable arguments for stadium subsidies have been so thoroughly discredited now that advocates often dispense with persuasion and go straight to threats: “Pony up, or we’re outta here.”
Taxpayers already ponied up for the Jazz, and not just with 221 consecutive home sellouts. In 2016, the Salt Lake City Redevelopment Agency unanimously voted the team $22 million in property tax kickbacks to subsidize the Delta Center’s renovation.
Yet just a few seasons later, politicians are once again debating how much more of Utah taxpayers’ money they should give to the team — even though the Jazz franchise has tripled in value since then, from $985 million to more than $3 billion. The “case” for subsidizing the Jazz at this point is not an investment prospectus — it’s a shakedown.
If the current proposal by the Big League Utah coalition and their members in the state House to bring an MLB stadium and team to Salt Lake City gains momentum, it needs to scrap any plans for a public-private partnership. While Gov. Spencer Cox, who sits on the board of the organization, has opposed the idea of using taxpayer funds, he is likely to be out of office by the time such a plan would come to bear.
Lawmakers know stadium subsidies are a bad deal for their constituents. Yet, the urge to support handing over the money continues because the optics of big shiny new stadiums and the prospects of new professional sports teams in the state are more exciting than the necessary work to foster free market economic growth.
Economic growth and opportunity don’t come from the government singling out winners and losers in the marketplace. Prosperity comes from broad-based, pro-growth policies that increase opportunities for everyone.
Lower tax rates. Fiscal discipline. Lighter regulatory burdens. School choice. Lower barriers to entry for people looking to work, launch businesses, buy homes and start families. Those issues may not be as fun for politicians to work on, but they have the virtue of improving people’s lives.
If Utah really wants to impress professional sports leagues, it should cultivate a more vibrant, growing, entrepreneurial state economy. Pro-growth economic policies spur investment, which in turn creates jobs, boosts wages, and lures high-skilled, high-productivity workers.
In Salt Lake City and elsewhere, our lawmakers should remember they don’t work for local sports teams’ owners; they work for all Utahns.
Kevin Greene
Kevin Greene is state director of Americans for Prosperity-Utah.
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