May 17--Thanks to Massachusetts taxpayers—and politicians who never tire of spending other people’s money—the New England Patriots will stay in Massachusetts. As a result, countless jobs and services will be killed. This is a reality that neither the Patriots nor the pols on Beacon Hill want to talk about. 
 
     The reality is that for every dollar spent in the public sector there is one less dollar spent in the private sector.  In this case, the number of dollars is $70 million. (That’s the amount the state will take through taxes to subsidize “infrastructure” work in and around the Patriots’ stadium in Foxboro.) Seventy-million dollars will be taken from private citizens and redistributed by public bureaucrats for the benefit of a politically-favored business. In this case, the Patriots and its owner, Robert Kraft. This is an example of a “state-business partnership.” 
 
     The pols win because they can say they’re creating infrastructure jobs. And Kraft wins because he doesn’t have to pay the real costs of getting real financial help from the private sector. But the losers are Massachusetts workers and businesses that already are or would have been supported by that $70 million in the private sector. Their economic well-being is destroyed. And this is done by political fiat—a Beacon Hill brokered deal—not by the marketplace. 
 
     That’s what subsidies do, and that’s what the stadium deal is about. Meanwhile, $70 million that could have been spent or invested more prudently by Massachusetts workers, won’t be—and we’ll never know what great things might have happened had private citizens been allowed to spend that money as they saw fit. 

State Gets 'Paid' 
 
     The stadium bill is on a fast track and is expected to pass in the House and the Senate and be signed by Gov. Paul Cellucci this week. Here’s how the $70 million will be spent: Some $42 million will go to upgrading land owned by Kraft. Another $14 million will be spent for “health and public safety.”  And $14 million more will be spent improving Route 1. Union contractors should do well. 
 
     The deal also says that the Patriots are required to build a new stadium in Foxboro at some point in the future. Finally, the scheme creates work for the Foxboro Industrial Development Corp., a near-public entity that will issue the $70 million in taxpayer-backed bonds. 
 
     The Patriots, in turn, must pay the state—not the taxpayers—$1 million a year for 25 years. The state will also take $400,000 a year for a quarter-century from satellite parking lots. Kraft and the parking vendors will, of course, pass these costs on to Patriots fans. So, this talk about the Patriots “paying” to stay in Massachusetts is, well, false. 
 
     Simply, Massachusetts taxpayers will shell out $70 million to the state. Over the next 25 years, Patriots fans will shell out another $35 million to the state. Kraft, Cellucci, and House Speaker Thomas Finneran say that the deal will further boost the Massachusetts economy. They call it an “investment.” But nearly all evidence shows that publicly financed sports arenas—and those publicly financed only in part—have a near-zero effect on economic growth. 

Kraft Benefits--Not Massachusetts 
 
     Raymond Keating, chief economist for the Washington-based Small Business Survival Committee, says:  “The lone beneficiaries of sports subsidies are team owners and players. … The results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports. … Indeed, almost all sports-happy politicians justify subsidies by claiming that stadiums and arenas are economic engines, and they point to supporting reports from hired-gun consultants that amount to the worst kind of guesswork.” 
 
     Countless studies on this topic, as reported by Boston Globe columnist Jeff Jacoby, show the following: “No statistically significant impact on economic growth rates. … No new net job creation. … Cities with major league sports teams grew more slowly than those without them.” 

It Was Your Money 
 
     Given the evidence, it’s unlikely that the stadium-deal being whisked across Beacon Hill will benefit the people of Massachusetts. But the $70 million in tax money might have if the people of Massachusetts could have decided for themselves how and where to spend or invest it. 
 
     How would they have spent it? No one knows. But given what we know about the economic benefits of subsidized sports stadiums and other publicly financed “work,” ask yourself this question: Who does a better job spending or investing your money, you or the bureaucrats on Beacon Hill? 
 
     As Gregory Christainsen, professor of economics at California State University, says: “If taxes are levied, the government obtains funds which can be used to employ workers at a project site. But taxpayers will now have less disposable income.” They then buy fewer products and the number of jobs in those industries declines. 
 
     “Government spending and government employment replace private spending and private employment,” said Christainsen. “No public official can create jobs without at the same time limiting jobs created by private, tax-paying concerns.” 
 
     With $1,000 each, 70,000 Massachusetts residents, for instance, might have bought $70-million worth of furniture, home appliances, auto parts, clothes, computers, TVs, or any number of thousands of other products. Or those residents might have put that $70 million into mutual funds, stocks, charities, churches or college tuition for their kids. 
 
     We’ll never know what might have happened. And that’s the way 
Cellucci, Finneran, and Kraft want it. 

-- Michael Chapman is editor-in-chief of Massachusetts News. 

 

RETURN TO FRONT PAGE