After all, that is one of the basic lessons I learned in my first job as a budget examiner at the United State Bureau of the Budget in Washington.
You may remember that the Northwest Herald reported in June that the baseball stadium would provide “two-thirds” of the revenue for the project.
Here’s the paragraph from Jocelyan Allison’s story:
“College officials expect that revenue from the team will cover two-thirds of the debt to build the complex.
The remaining debt will be paid through renting out the fitness center, which includes indoor basketball and volleyball courts, to traveling sports teams, (MCC President Walt) Packard said.”
The number that President Packard used was incorrect.
That’s what he told me in early September.
Instead of covering two-thirds of the debt, it will really only cover 36% of the debt.
So, how does that compare with the stadium’s cost.
Let’s look at the original debt proposal.
$10 million of the $26 million was supposed to pay for the stadium.
That’s about 38.5% of the total cost.
Wait a minute!
provide 36% of the revenues,
but be 38.5% of the project’s cost?
Does anyone but me see a disconnect?
And, from the reaction I got from board members when I asked if the baseball team was going to pay the extra interest that its non-tax free bonds would require, I think that 38.5% figure may be low.
Maybe it’s closer to 40%.
I hope the college’s financial advisor might provide that information.
Hence, the title of this article:
Which Way Does the Subsidy Flow?