Tag: revenue

Pro Sports Subsidies From State Taxes Continue While Services Get Squeezed
August 30, 2010

Add Florida taxpayers to the list of those subsidizing profitable major league baseball franchises in Miami and St. Petersburg, even if most Floridians don’t realize it.

Financial documents leaked this week show that both the Florida Marlins and the Tampa Bay Rays turned profits in recent years even as they insisted that local taxpayers finance new stadiums.  (Read news stories about their profitability here and here.)

In the Marlins’ case, the cost to local taxpayers for “a sweetheart stadium deal” will be $2 billion or more to repay bonds over 40 years.  The Rays also say they need a new stadium financed in part by local taxpayer subsidies.  Both teams let it be known that they might move to another city if new stadium arrangements weren’t satisfactory.

Meanwhile, thanks to a Florida law enacted in 1991 to subsidize a "new or retained professional sports franchise," the Marlins, Rays, and six other professional sports franchises each receive a check from the state every month for $166,667.  That’s $2 million a year for each team, for 30 years.

Together with $5 million in subsidies for major league teams based in Florida for spring training, these subsidies from state money cost $21 million each year, straight from collections from the sales tax.  In addition, Florida provides a $2 million annual subsidy to the Professional Golf Hall of Fame and $1 million annually to the International Game Fish Association World Center. 

The Marlins, Rays, and other baseball, football, basketball and hockey teams subsidized by Florida taxpayers are each worth hundreds of millions of dollars, according to annual sports franchise valuations by forbes.com: 

Florida Marlins                                  $317 million

Tampa Bay Rays                              $316 million

Jacksonville Jaguars                         $725 million

Tampa Bay Lightning                        $191 million

Florida Panthers                               $159 million

Tampa Bay Buccaneers                    $1 billion

Miami Heat                                       $364 million

Orlando Magic                                  $361 million

In just the last five tough budget years, Florida’s taxpayers will have subsidized these profitable pro sports teams with more than $100 million.  This money leaves the state treasury month by month and is not available to fund priorities like education, health care and health insurance, and other services needed by those caught in the economic downturn.

Subsidies for professional sports teams fall under the guise of “economic development,” where tax revenues are handed out with the rationale that they will create jobs and other positive economic outcomes.  The $21 million annual subsidy to sports teams is one of hundreds of tax breaks in Florida law, costing billions each year, which are seldom if ever reviewed.

Supporters maintain that the state can’t change the 1991 law to eliminate the subsidies because the money supports bonds sold to finance pro sports stadiums.  Other money could be substituted, however, if legislators decided that the Florida had more important priorities.

Many tax breaks merely provide government subsidies to profitable businesses or provide money to employers who would have hired new workers anyway.  (See “Tax Breaks Shift Money to a Few Winners and Compete for Limited State Revenue.”) 

Sport subsidies are opposed by most economists.  “There appears to be little or no evidence for any net beneficial economic impact of public stadium financing,” concluded an economist’s study for the James Madison Institute in Tallahassee.

An examination of a multitude of national studies on tax breaks for sports teams reached the same conclusion.  “Sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation.”

“The fact that sports subsidies continue to be granted, despite the overwhelming preponderance of evidence that no tangible economic benefits are generated by these heavily subsidized professional sports facilities, remains a puzzle,” said the authors of the study for the International Association of Sports Economists.

Part of the explanation may be “simple collective foolishness when it comes to matters of the heart like sports,” the economists said.

One former owner of the NFL’s Philadelphia Eagles, Norman Braman of Miami, drew his own conclusion when talking to the Miami Herald about the Marlins’ profitability while the team sought taxpayer subsidies.

“The taxpayers are stuck with paying [the money for the stadium] back.  It shows [the Marlins] should have built the thing themselves.  It shows the taxpayers are a bunch of suckers.”

 

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Legislature to Schools: Do More With Less State Money
April 12, 2010

The furor over the merit-pay-for-teachers bill sent by the legislature to the governor for his signature (or veto) occurs in the context of a long battle over the level of funding for education in Florida.

For more than a decade, governors and legislators have enacted a series of education policy changes focused on the FCAT and various accountability systems designed to hold educators' feet to the fire to make sure that "no child (is) left behind." 

Educators and others counter that it's the legislature that hasn't been accountable, failing to fulfill this guarantee in the Florida Constitution: 

"Adequate provision shall be made by law for a uniform, efficient, safe, secure, and high quality system of free public schools that allows students to obtain a high quality education...."

When the people of Florida have spoken directly about public schools in the last decade, they have twice voted to require the legislature to spend more to make schools high-quality (approving constitutional amendments for a universal voluntary prekindergarten program and a major reduction in class sizes). 

The legislature has been finding it difficult to do what the voters required (and to maintain adequate levels of funding for other vital state services) and is relying heavily on temporary federal stimulus money to make ends meet.

SB6 links teacher pay to outcomes on standardized tests, some of which aren't developed yet.  And it requires local school boards to set aside 5 percent of existing funds to make the necessary changes.  In other words, it requires school systems to do more with the same amount of funding--an "unfunded mandate" from the state to school boards. 

The long, deep national recession makes the task difficult for the legislature, of course--particularly when it refuses to close any tax loopholes or considers adding more.  But declining revenue also makes it even harder for teachers, school administrators, and school boards to do their jobs.

When considering how well the legislature has funded public schools in Florida, here's a useful measure: 

In the 1998-99 school year, 52 percent of all government funding for public schools in Florida came from the state.  Local school boards provided almost 41 percent, and federal funds less than 8 percent.

In 2007-08, the state and local shares had reversed.  State funding had fallen to 40 percent of all public school spending while local revenue climbed to 51 percent.  

For those dissatisfied with property taxes, there's one reason.  The legislature provides less state money to schools while requiring local school boards to provide more.

 

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900,000 Jobs Have Been Lost in Florida, But We May Have Turned the Corner
April 12, 2010

The national recession that officially began in December 2007 started hitting Florida several months earlier.  For almost three years now, the number of jobs has dropped almost every month, from a peak in March 2007 to a low in January 2010.

For the first time in 34 months, however, Florida actually gained a substantial number of jobs in February--26,300.  One month doesn't make a trend, of course, but it may indicate that the period of job losses in Florida may have come to an end.

The leveling off of job losses may reflect the billions of dollars injected into Florida’s economy by the American Recovery and Reinvestment Act.  These "stimulus funds" helped preserve jobs funded by government, particularly teachers and others school workers.  In addition, some of the federal money aided private employers, such as those who provide healthcare services funded by the Medicaid program.

A look at Florida's long, steady decline in nonfarm jobs:

 

 For more about Florida's unemployment situation, see our report on job losses.

 

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