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Stadium welfare; Brazilians get it right

Froma Harrop

Publication: The Day

Published June 26. 2013 4:00AM

Something's gotten into Brazilians that hasn't caught on here, but should. They're out on the streets protesting their government's plan to sink billions into monuments to sport.

Rather than celebrate their country's hosting of the soccer World Cup next year and the Olympic Games in 2016, they are saying "hey." As in "hey," our streets are lousy. "Hey," the schools are substandard. "Hey," despite our economic miracle, poverty persists.

Most gratifying is the Brazilians' chant: "A teacher is worth more than Neymar!" That would be Neymar da Silva Santos, a 21-year-old soccer great, said to be making $18 million year.

A higher value has trumped Brazilians' love of soccer. Could you imagine Texans taking to the streets and shouting, "A teacher is worth more than Tony Romo"? (Romo just signed a six-year, $108 million contract.) They'd be called downright un-American, if not socialist, even though the Dallas Cowboys' $1.2 billion stadium was built with public largesse.

For starters, the city of Arlington issued municipal bonds to help the Cowboys' billionaire owner, Jerry Jones, build his palace. Nine years ago, its voters were conned into raising taxes on themselves to repay the bonds. Objections were crushed under the avalanche of pro-stadium ad spending.

Arlington further enriches Jones by owning the stadium and therefore not collecting real estate taxes on the $905 million property - another $17 million a year given to Jones and lost by the city.

Actually, all Americans have been sucked in because the interest on those bonds is tax exempt: Thus, Jones gets lower borrowing costs, and U.S. taxpayers subsidize his stadium to the tune of $65 million over 29 years.

Tax-exempt municipal bonds were intended to help local governments build roads, sewers and schools. Applying them to coliseums since 1986 will cost U.S. taxpayers $4 billion, according to numbers crunched by Bloomberg.

In 1986, Congress tried to stop cities and states from financing sports facilities with tax-exempt bonds. The legislation was messed with in a way that encouraged local governments to borrow even more for sports facilities.

In most cases, Americans passively march behind their civic leaders, dutifully wearing the team caps and shirts. They find their identities in these mega-businesses and adulate their players-for-hire.

Usually, a threat to leave town is enough to quiet unruly naysayers, as happened in Indianapolis. The Colts said in 2006 that without substantial taxpayer help, they would be gone. And so a new Lucas Oil Stadium, where the Colts will play 10 home games this year, was built at a cost of $720 million. The Colts paid $100 million of it, and the taxpayers the rest through a bunch of new levies.

Of course, the locals issued municipal bonds, a debt made more painful by the 2008 market collapse. Some of those losses were made up by cuts in grants for the arts and culture. Yet team worship continues apace. Hardly a bar in Indianapolis isn't lit by Colts neon.

Stadiums are sold as economic engines. But when you add it all up - the subsidies, local dollars diverted to far-off owners and players, and the rest - sports facilities provide little economic benefit, notes Harvard urban planning expert Judith Grant Long. She found that the average "public-private partnership" to build stadiums left the cities paying 78 percent and the teams 22 percent.

As for the Olympic Games, Goldman Sachs economist Jose Ursua says that they rarely turn a profit for the community. Whether Brazil would be an exception seems of little interest to the demonstrators there.

This is about taking care of the people, about themselves, not sacrificing their interests to the sports machine. If only Americans could reclaim their self-regard with similar zest.

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