Obama budget could disrupt funding for new stadium
An effort to build a new stadium for the St. Louis Rams could hit a snag if a provision in President Barack Obama’s proposed budget makes it into law. Under the president’s budget plan, states and cities would no longer be able to use tax-exempt bonds to help pay for professional sports venues.
That could put a crimp in the plan to fund a new riverfront stadium in St. Louis. Backers of the proposed new venue have said it would be funded by numerous sources, including private investment and a possible extension of the tax-exempt bonds currently being used to pay off the Edward Jones Dome.
But Dennis Zimmerman, the director of the American Tax Policy Institute told USA Today, that he’s glad the president included the provision in his budget. “Tax-exempt bonds are supposed to be for state and local infrastructure,” and he says that does not include helping to fund private businesses.
A Bloomberg analysis in 2012 concluded that the U.S. Treasury has missed out on nearly $150 million in tax revenue because of the use of tax-exempt bonds for the construction of professional sports facilities.
Advocates have long pointed to the community benefit of jobs and prestige when backing the use of public dollars to help private owners build new homes for their teams.
U.S. Sen. Claire McCaskill, D-Mo., who’s built part of her reputation in Washington fighting waste in government, says that she understands “the sentiment” against using the tax code as a form of “corporate welfare.” But, she added, there are better places to start making changes.
“I don’t think any of us are anxious to hand out government welfare to billionaires, but having said that, there’s a long list of places where we do that right now and I’d like to get started on that before we pick off the ability of local communities to participate in making sure that professional sports teams are part of the landscape.”
One such change McCaskill says would be of greater benefit to U.S. taxpayers would be to eliminate the ability of companies to claim a tax deduction for costs related to moving employees and jobs overseas. “I’d much rather start with that problem” than with one that “has an economic benefit in terms of jobs that are created and the economic activity that is generated by a professional sports team.”
St. Louis is not alone in looking to build a new stadium. While leaders in the new Republican-led Congress have said that tax reform is a possibility, what’s not known is whether lawmakers will agree to do away with what many see as a necessary component of economic development.