The DC Council is considering increasing the sales taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. imposed on tickets, concessions, merchandise, and parking purchased at Nationals Ballpark by 5%, on top of the existing 5.75% sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. and 4.25% extra tax. Councilman David Catania says that low attendance at Nationals games has shorted the city’s stadium-based taxes and that the team owner refuses to pay $3.5 million in rent because the stadium is “incomplete.” Pressured by payment deadlines for bonds used to finance the stadium, Catania says they have no choice but to raise taxes.
There is a deeper problem here: Why is the city involved in the finances of a baseball stadium in the first place? Why is it acceptable to use public funds for private endeavors? Studies suggest that among possible city projects, government-subsidized sports facilities are among the worst job creators.
Not only has the city wasted $611 million in taxpayer money subsidizing the stadium, but complaints now about “unforeseen” low attendance are dishonest. Ironically, the initial financing deal was stalled because the bank wanted a letter of credit to cover risks such as poor attendance or terrorism.
Since collections for the Ballpark Revenue Fund are now threatened by the “unforeseen” lack of attendance, the Council wants to claim more tax dollars with this 5% increase. Does that make sense? Raising taxes to save the Nationals’ ballpark is like bailing water out of a ship fashioned from Swiss cheese: doomed to fail.
An alternative and better course of action is privatization. The city should auction off the remaining assets and cut its losses. Bail water indefinitely and eventually sink, or jump ship and save some time? D.C. Council, you always have a choice.
More on stadium subsidies here and here.
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