Mr. Speaker, it is official: the Oakland Raiders are moving to Las Vegas. Beginning in 2020, they will play in a shiny, new 65,000-seat stadium outfitted with a retractable roof that is expected to…
Mr. Speaker, it is official: the Oakland Raiders are moving to Las Vegas. Beginning in 2020, they will play in a shiny, new 65,000-seat stadium outfitted with a retractable roof that is expected to cost $1.9 billion.
If you are an American taxpayer, you will help pay for it, even if you live nowhere near Nevada. About $750 million for the project will be financed through municipal bonds, which are tax exempt. The Federal tax break is projected to amount to some $120 million, according to a study by the Brookings Institution.
Congress and President Trump should take the Raiders' bad example as an impetus for reform. As the President considers a $1 trillion plan to restore America's aging roads, rail, bridges, waterways, and airports, lawmakers should ask why so many stadiums are following the Las Vegas model, fleeing one bad economic State and using your tax dollars to go to another.
The alternative is what we did in Oklahoma City in 1993. Our residents passed a temporary 1 percent increase in sales tax to fund, without incurring a debt, a building spree called the Metropolitan Area Projects, or MAPS. Over 5 years, the plan raised $350 million for nine projects, including a stadium now called the Chesapeake Energy Arena, home to NBA basketball's Oklahoma City Thunder. This pay-as-you-go approach may sound unremarkable, but it is nothing short of exceptional.
Most professional sports stadiums these days are financed with municipal bonds, something that they were never intended to be used for. But this kind of debt wasn't intended for lavish football stadiums or basketball arenas. Municipal bonds were supposed to give communities a way to build public projects--hospitals, schools, roads--without having to pay Federal taxes on the debt's interest. The point was to ease the financial burden on cities and States that invest in expensive but essential infrastructure.
Over the past 30 years, however, stadium financiers have exploited a loophole in the Tax Code to qualify professional sports arenas for municipal bonds. Because Federal taxes aren't incurred on the interest of this debt, stadiums essentially receive a multimillion-dollar subsidy from Washington.
Last year, a Brookings study examined 45 stadiums built or seriously renovated since 2000; 36 were funded at least in part with municipal bonds, resulting in forgone Federal tax revenue of $3.7 billion. That is enough money to employ 88,000 military staff sergeants or give each State a $74 million block grant, or it could help reduce the national debt.
To solve this problem, I have introduced, along with my Democratic colleague, Earl Blumenauer from Oregon, H.R. 811. This bipartisan No Tax Subsidies for Stadiums Act would prohibit arena financiers from using municipal bonds. Instead of building enormous, lavish sports facilities on the backs of unsuspecting taxpayers across the Nation, financiers should ask communities to buy into their vision. If residents want a stadium to be built, fine. They should be willing to pay for it like we did in Oklahoma City; or sports franchises and leagues always have the option to finance construction like most businesses do, privately.
Funding an upgrade to America's core infrastructure will be a challenge. It shouldn't require Congress to use budget gimmicks or run up the national debt.
Closing loopholes, such as requiring stadium financiers to pay Federal taxes on bond interest that was intended to improve our decaying infrastructure, would ensure taxpayers get the best return on their dollars to improve public infrastructure that all Americans use.
Mr. Speaker, I yield back the balance of my time.
