The NFL, General Electric, and Fed Up Taxpayers

By January 19, 2016 January 10th, 2019 No Comments

Last week, we saw opposite ends of the spectrum of state and local governments’ hospitality to big business.

In the NFL, the now-St. Louis Rams announced that they will be moving back to Los Angeles, reinvigorating a longstanding debate about why taxpayers should be footing the bill for pro sports franchises.Although as The Economist notes, the Rams’ move is privately funded, the City of St. Louis, which has far less appeal for an NFL franchise, was apparently willing to shell out $477 million in public funds toward construction of a new stadium. The Rams declined and went back west.

Private funding in this context is mostly an exception, though, as the article notes: since 1995, it reports, 29 of 31 NFL stadiums used public subsidies to “help cover construction and renovation costs.” Over at the libertarian Reason magazine, Jared Meyer digs in a bit more, describing NFL franchises’ effectiveness in shifting costs to local municipalities through bonds “created by Congress to help fund roads and schools,” increased taxes, and other means. A glaring instance is the Denver Broncos, which offloaded 75% of the $400 million cost to build Sports Authority Field at Mile High Stadium. Meyer also points out that even the New England Patriots, which unlike many other franchises privately funded their home stadium, nonetheless saw Massachusetts agree to spend $72 million on nearby infrastructure improvements, and the Patriots avoid property taxes on the stadium.

The glitz and allure of an NFL franchise weren’t at issue in Connecticut, which has been General Electric’s corporate headquarters for about four decades. After a public and vitriolic feud over the past several months with Connecticut’s liberal, big-spending governor Dannel Malloy, GE finally announced last week that it will relocate to Boston, Massachusetts. This was a tremendous loss for Connecticut, and local communities here are again scratching their heads over Malloy’s stubbornness and failed leadership. Massachusetts offered significant incentives to GE, reportedly to the tune of $145 million, and this helped add GE to a robust stock of high-tech firms with an appetite for the talent streaming out of the Boston area’s colleges and universities each year. Whatever anyone thinks of GE or tax subsidies, this move will severely hurt Connecticut well beyond Malloy’s tenure, and it exposes the state’s systemic and pocket-picking tax habits. Many are wondering who’s next.

There is no perfect answer for taxpayers, but the spoils of a robust business environment will be enjoyed by states and local areas that reward measured, reasoned approaches to these issues by elected leaders, rather than the intransigent, stubborn, and politics-first mindset that convinced GE to leave Connecticut.