Borrowing 20-Year Money – Risks Versus Potential Benefits

The Heartland Institutes’s Steve Stanek addressed the McHenry County College Board on Monday night about the advisability of baseball stadiums and convention centers. In the first article about his remarks, Stanek told how baseball stadiums are money losers for taxpayers. Yesterday, he concentrated on convention centers.

In today’s installment of what he said, Stanek focuses on what the MCC baseball stadium.

I have spent the time so far talking about the broad economics of the stadium idea. I’ll just touch on the specific MCC-related issues by noting you plan to borrow money for 20 years for a team in the Frontier League.

Yet the Frontier League has been in existence only 15 years. Not a single Frontier League team has been in the same town 15 years. Based on the Frontier League’s own Web site, teams appear to stay in the same town about five years on average.

Even if your plan works . . . even if all the revenues come in as projected and the costs are controlled and the team stays for 20 years . . . this is still a bad idea because it ties up tens of millions of dollars of borrowing that could be used for other things more directly related to the mission of a community college.

If the team investors believe it is such a good investment, they should build the stadium themselves. There is no reason for the college to be the pass-through mechanism to pay back the borrowed money.

Furthermore, the college could then collect property tax money from a privately owned stadium from day one, without risking one penny of the taxpayers’ money or tying up one penny of the college’s borrowing authority. So could other local taxing bodies. If the college owns the stadium, will it even be on the tax rolls?

And as volumes of research shows, stadiums create few jobs. Most of the jobs they create are low-paying and only part-time or seasonal. And people spending money at a stadium tends to reduce their entertainment spending at other places.

Nearly everything I have already mailed to you and presented to you tonight has come from sources other than the Heartland Institute. We are free-market oriented, and there definitely are people who dislike some of Heartland’s positions.

Some of them are the very people I have cited to oppose this stadium idea. That’s how broad-based the agreement is when it comes to government funding of sports stadiums. We disagree on many things but we agree that government funding, whether through borrowing or direct tax hikes, is a terrible use of the public’s money.

Thanks very much for your attention. I’ll be happy to answer any questions you might have.

The board meets tonight at the college at 7 PM. If you go early, you can tell the board what you think. No big deal; you’ll only get three minutes and the minutes of the meeting won’t even say what you said.

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