Subsidizing the Low Road: Economic ... - Good Jobs First

More documents

Recommendations

Info

Soon after Modell agreed to move his team to Baltimore, the Orioles cried foul.The Orioles had a clause in their lease that guaranteed the team parity with any dealstruck between the MSA and a football team. The Orioles claimed that the Ravens hadbeen given a better deal and filed suit against the Stadium Authority. An arbitrationpanel ruled in favor of the Orioles. Under the ruling, the MSA had to give the team thenaming rights to the ballpark and contribute $10 million toward improvements. 195Economic and Fiscal ImpactThe impact of the football stadium on the Maryland economy is unclear. In1998, the Department of Business and Economic Development (DBED) estimated thatteam and fan spending would create 2,730 new jobs and generate $11.3 million inadditional state and local tax revenue. 196 An analysis done by the Department ofLegislative Services (DLS), however, estimated that team and fan spending would resultin only 889 jobs and $7.7 million in state and local tax revenue. 197What accounted for this dramatic difference in opinion? The DLS argued thatDBED exaggerated the ripple effects of team and fan spending. DLS used lowermultipliers to account for the fact that many of the jobs created by the stadium wereseasonal and low-paying. Additionally, DLS argued that not all fan spending wasnecessarily new spending, since some local fans would have spent their moneyelsewhere in the area had the stadium not been built.Currently, the state is spending approximately $20 million each year to pay offthe debt on the two stadiums. 198 A look at the Stadium Authority's budget shows thattotal expenditures on both the football and baseball stadiums exceeded revenues fromthose venues by $21.3 million in 2001 (see Table 6.) 199 The MSA used $22 million inlottery proceeds and the $1 million annual contribution from the City of Baltimore tooffset these losses. 200 At the end of FY2001, the stadium budget showed a $4.1 millionnegative balance, down from $5.8 million the previous year. 201A close examination of the Baltimore stadium deals demonstrates that thebenefits of these projects do not outweigh the costs. More important is theopportunity cost of not investing taxpayer dollars in education, transportation or otherprograms that could yield more positive economic outcomes.42
Table 6. Maryland Stadium Authority Financing Fund FY 2001Beginning Balance -$5,769,000RevenuesAdmissions Tax $7,075,000Baseball Rent $7,109,000Other Baseball Stadium Income $1,406,000Football Maintenance Payments $6,219,000Other Football Stadium Income $554,000Warehouse and Camden StationRevenue$2,920,000Other Income -$584,000Total Revenues $24,699,000ExpensesMSA Operating Expenses $2,629,000Camden Yards Facilities Operations $15,573,000Equipment Leases $3,534,000Stadium Improvement Fund $400,000Capital Expenditures $1,292,000Debt Service and Financing Costs $20,264,000School Construction Fund Payment $2,400,000Total Uses $46, 092,000Revenues minus Expenses -$21,393,000Additional FinancingCity of Baltimore Payment (for DebtService)$1,000,000Lottery Proceeds $22,000,000Ending Balance -$4,162,000Source: Department of Legislative Services43
Page 1 and 2: Subsidizing the Low Road:Economic D
Page 3 and 4: Table of ContentsAcknowledgments…
Page 5 and 6: Executive SummaryAn analysis of Bal
Page 7 and 8: of packages. The BDC evaluates prop
Page 9: 1. Revitalizing Downtown: A History
Page 18 and 19: the agenda was the city's acquisiti
Page 20 and 21: Baltimore Management Corporation (E
Page 22 and 23: Table 3. Major BDC Projects Approve
Page 24: 3. How Baltimore Finances Economic
Page 27: While promoting development, TIF co
Page 30 and 31: 4. The Economic Development Decisio
Page 32 and 33: • whether the project would provi
Page 34 and 35: The real question, however, in eval
Page 36 and 37: to alleviate poverty if job quality
Page 38 and 39: Committee. 130 The Committee focuse
Page 40 and 41: emained skeptical. George Williams,
Page 42 and 43: Effect on State Aid. The state dist
Page 44 and 45: 7. Case Study: Additional Payments
Page 46 and 47: 8. Case Study: The Orioles and Rave
Page 48 and 49: The Ravens RoostWhile the Orioles w
Page 52 and 53: 9. Case Study: East Baltimore Biote
Page 54 and 55: However, the city may well be overe
Page 56 and 57: will allow Johns Hopkins to expand
Page 58 and 59: 10. ConclusionBaltimore’s massive
Page 60 and 61: Wage standards could be pegged to t
Page 62 and 63: 34 Hula, 1990.35 Thomson, 2001.36 L
Page 64 and 65: 103 Levine, 1987a.104 Levine, 2000
Page 66 and 67: 167 Baltimore Development Corporati

Subsidizing the Low Road: Economic ... - Good Jobs First

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?