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Should Cuyahoga County Voters Renew a Sin Tax to Pay for Cleveland Stadiums?

Tuesday, July 16, 2013 at 6:39 PM

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Stuck in the thousands of pages of the state budget is a measure that allows Cuyahoga County voters to renew a tax on cigarettes and alcohol. The tax helps pay for a big, visible part of downtown Cleveland: professional sports. And it’s going to expire in two years. All three of the city’s major pro sports venues are aging, and local officials are considering going back to the public for funds to keep the facilities attractive for fans and visitors. Are professional sports teams worth the public investment? And is a sin tax the fairest way to raise the money? ideastream’s Nick Castele reports.

Joe Roman, the head of the Greater Cleveland Partnership, says he wants Cleveland to be a major-league city with major-league sports teams. He says we’ve seen the consequences of not paying to maintain the stadiums they play in. Take Cleveland Municipal Stadium, he says.

ROMAN: “People didn’t even want to go there. I mean, the bathrooms were not places anybody wanted to visit, and the facilities themselves just didn’t work for anybody.”

Demolition of that stadium began in 1996, after the original Cleveland Browns moved to Baltimore to become the Ravens.

The city has had a 15-year tax on cigarettes and booze in place since 1991 to finance the Gateway complex that included Jacobs Field and Gund Arena—now renamed Progressive Field and Quicken Loans Arena.  Voters approved extending it another 10 years to finance Browns Stadium, now FirstEnergy Stadium. Now the entire tax goes toward paying the debt and upkeep of that stadium.

With just two years left before it expires, Roman has been laying the groundwork to extend it once again. He points out the city’s on the hook to pay for repairs to Browns stadium, sin tax or no sin tax. The city is set to make payments until 2025.

ROMAN: “What the sin tax is all about is making sure that a dedicated stream of revenue is available for the city and county, so that they don’t have to tap into other general fund pressures and budgets in order to take dollars away from other precious services.”

The new tax, if put on the ballot and approved, would potentially pay for repairs on all three stadiums.

Cleveland city councilman Brian Cummins, isn’t thrilled with the idea of taxpayers continuing to fund professional sports. 

CUMMINS: “Am I satisfied with that? Absolutely not. It’s a terrible deal for cities.”

Cummins says wealthy sports leagues shouldn’t ask poor cities like Cleveland to foot the bills for stadiums. And he considers the sin tax especially odious, because it says the tax on cigarettes and alcohol disproportionally hits people with low incomes, like many of the residents of his ward.

CUMMINS: “I don’t like the idea of taxing low-income families and individuals, even if they are sinning, or vices, such as smoking and drinking. But in reality that’s how this was paid for, and I hope thaht there could be a better solution than only relying on the sin tax.”

Public funding for stadiums is very common, says Smith College professor Andrew Zimbalist, who’s an expert in the economics of sports.

He says leagues have a lot of leverage when negotiating with mid-sized cities like Cleveland. He says cities like New York, Chicago and L.A. are in a stronger position.

ZIMBALIST: “They’re major metropolises, they have large numbers of Fortune 500 companies that buy luxury boxes, that buy club seating, that do corporate sponsorships and signage at the stadium.”

Zimbalist says if negotiations don’t go well, the teams and the leagues have the ultimate bargaining chip.

ZIMBALIST: “If the sports team wants, it can say to the city, As of 2015 or some other date, I am no longer obligated to play in your town, and I’m going to go out into the marketplace and find a town that will build me the stadium I want under the conditions that I want.”

Now, no team has said they’re threatening to leave town. And the tax probably won’t even be on the ballot this election.

Councilman Brian Cummins says before that day comes, though, he wants a robust public debate.

CUMMINS: “The councils, both the county and the city, we really need to be aggressive to ask serious questions and to demand the documentation to review this stuff.”

There are other taxes that pay for stadiums—like those on parking, car rentals and admission tickets. Cummins is hopeful there are ways to raise money outside of the sin tax, but he concedes there might not be too many other options.

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