Oh, how the other half lives!
By “the other half,” I don’t mean “the wealthy.” They’re as honest and decent as any other group. No, I’m talking about those with their hands on the levers of government power . . . along with their subsidy-seeking cronies.
Kevin Johnson, once a National Basketball Association all-star, now serves as the Mayor of Sacramento. Johnson garnered more than a thousand career steals mostly for the Phoenix Suns; he now plays a different game of plunder. He is assisting the Sacramento Kings by dishing out $258 million in tax dollars to build the team’s owners a brand new arena.
Actually, Mayor Johnson and city officials claim they’re splurging only $258 million, and most media outlets (including, absentmindedly, my own Common Sense e-letter) have repeated that “official” number. But the true amount of the subsidy must also count the 3,700 parking spaces handed over for free to the NBA franchise, and include various infrastructure subsidies, tax breaks and other bennies, too.
Thus, the total subsidy to the billionaire Kings’ owners amounts to nearly a third more, a whopping $334 million — roughly Sacramento’s yearly cost to provide all pay and benefits for the city’s entire workforce, including pensions and healthcare for all retired workers.
The city, however, boasts that the arena project will bring over $11 billion in economic benefits over the next few decades. That preposterous claim is now the subject of a legal challenge against the city.
“Documents discovered in the lawsuit show that those claims of benefits were invented by the subsidy seekers themselves, e-mailed to the city, and, by the magic of cut and paste, placed into the staff report, where the city’s elected leaders and the public were defrauded into believing they were reading the considered judgment of the professionals of government,” writes former deputy state treasurer Mark Paul at his The California Fix blog. “When the city staff spoke, the welfare seekers’ lips moved.”
As I wrote last year in this space, if there is a consensus among economists on anything, it would be that public spending on sports stadiums is not a driver of economic progress. University of Chicago economist Allen Sanderson states clearly, “If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.”