Commentary: Andrew Steele: The privileged position of sports
By Andrew Steele email@example.com April 2, 2013 12:14PM
Updated: April 2, 2013 1:09PM
One of the issues lurking around state government this year has been creation of a motorsports investment district — essentially a benefits package for the Indianapolis Motor Speedway.
The district would collect income and sales taxes paid in its boundaries up to $5 million a year for 20 years. It’s essentially the same issue every host of a professional sporting venue faces — the stadium or racetrack owner trumpets its economic impact, and government officials, often begrudingly, find a way to get them their money.
There doesn’t even have to be a credible threat of moving, anymore. It’s simply become something that everyone does.
At this writing, the Senate has passed the bill; the House is considering it; and the governor claims to be skeptical, because budgets are tight, he wants an income tax reduction, and the investment district doesn’t seem to provide much opportunity for new private investment, outside the speedway’s portion of the project.
The argument that proponents have decided is convincing has been provided by the Indiana University Public Policy Institute, which reports simply that the speedway generates $510 million annually for the “Indiana economy.”
Five million a year for $510 million in economic activity? Sounds like a good investment, and the speedway is certainly not a revenue-generator the state would want to lose.
But that argument applies to everything, and everyone — why not a subsidy for people willing to move to Indiana and bring their economic generating to the state? (Or why not a state subsidy for a local event like the Gary Air Show — surely that most be an economic generator.)
Generally with subsidies there’s a significant competitive issue with another community or state, or a significant public interest in redevelopment. There has to be that hook to justify, at least rhetorically, pulling tax revenue from its regular destination and giving it to a private entity (or event to use it for public purchases, as with a TIF district).
But with sports, no. The argument seems to be a formality. The economic activity is certainly big — pro sports concentrates people and money in so small an area it has a significant multiplying effect on everything from the price of a hot dog to the generation of service jobs.
But we don’t spend money on sports as an investment. We spend it because it’s so closely associated with our community identity, or pride, or both.
Sports enjoys a privileged position at all levels. We have almost twice as many high school football stadiums as we need. Why? Because every school needs its “home field.” There’s no practical justification for it.
The Crown Point Sportsplex is a public-private partnership that’s not just about local youth sports, but about the economic concentrations amateur sports make possible. There’s a market for leagues and organizations and unions that offer “championships” of just about any sort.
They’re not worth much practically, but they feed the ego in ways for which people are willing to pay. Sports are mainly about pleasure and pride, and people will always be willing to pay for it.