Data does not support allotting public funds to sports stadiums

The Chicago Bears, a football team valued at $6.3 billion by Forbes, with a principal owner, Virginia McCaskey, who has a net worth valued at $1.3 billion by Forbes, are coming hat-in-hand to the state to ask for public taxpayer dollars to help finance a pricey new $3.2 billion stadium.

The project also calls for another $1.5 billion in infrastructure improvements, which means the total price tag is in the neighborhood of $4.7 billion, which is a pretty exclusive neighborhood. In fact, it would be the second-most expensive NFL stadium project in history, trailing only the $5 billion cost of SoFi Stadium in Los Angeles, home to the Rams and Chargers. The difference is SoFi stadium was funded entirely with private dollars.

True, the Bears are willing to pony up $2 billion of the stadium construction costs with team resources and cover another $300 million with a loan from the NFL. But that leaves $900 million for taxpayer dollars to cover, just to build the stadium. Under the Bears’ proposal, that $900 million would come from the Illinois Sports Facilities Authority floating a 40-year bond, that would be repaid from existing hotel taxes and related charges. Of course, ISFA is still on the hook for some $629 million in debt issued to finance the last redo of Soldier Field, as well as the last renovation of the White Sox’s stadium, so that $629 million will have to be refinanced as well. The Bears didn’t outline a funding source for the remaining $1.5 billion in infrastructure improvements, but if you have a mirror, you can literally see who will pay for it.

Of course, the Bears have claimed all sorts of incredible job growth and related economic benefits will flow from investing public dollars in this venture, but you should take the promised economic largesse with a giant grain of salt. And that’s not my opinion, but rather the consensus of the independent research on the subject. Indeed, a comprehensive study published just last year found that “stadiums were poor public investments” in terms of generating “tangible benefits,” like jobs or economic or tax revenue growth. The Federal Reserve Bank of St. Louis has even cautioned that, “regardless of whether the analysis covers a neighborhood, city or metropolitan area,” the economic benefits associated with public financing of sports facilities is “de minimis.”

From the public’s standpoint, the pivotal question to raise about any proposal like the Bears’ stadium deal is clear: Would Illinois be better off using taxpayer dollars to fund things like public schools, supporting low-income single working parents and homebound seniors or making billionaires richer? Because at the end of the day that’s the real opportunity cost of devoting taxpayer money to fund private sector projects like the Bears’ stadium.

Public budgeting is challenging precisely because it involves allocating insufficient resources among various compelling, and underfunded, core public services. The decision to devote additional dollars in a given fiscal year to something like public schools frequently requires shifting investments away from other public priorities, like mental health services or caring for abused and neglected children.

This challenge is especially apposite in a state like Illinois, which is facing significant fiscal challenges, even if it doesn’t help fund the Bears’ new stadium. As things stand today, Illinois owes $144 billion to its woefully underfunded pension systems. Making matters worse, that outsized pension debt is being repaid pursuant to a legislatively created “pension ramp” that’s so backloaded it calls for annual payments to jump at unaffordable increments for the foreseeable future.

Meanwhile Illinois’ tax policy doesn’t align with or function well in the modern economy. Hence over time, state revenue growth is generally insufficient to keep funding the same level of public services, adjusting solely for changes in inflation and population. Which means state decision-makers are already rationing inadequate resources among vital public service priorities. In that environment, diverting tax dollars to enrich folks who are already well-to-do isn’t justifiable.

• Ralph Martire is Executive Director of the Center for Tax and Budget Accountability, a fiscal policy think tank, and the Arthur Rubloff Professor of Public Policy at Roosevelt University. rmartire@ctbaonline.org