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Birmingham Mayor: Let’s Raise Taxes to Build a Domed Stadium

2 min readBy: Gerald Prante

There are many stories of bad fiscal policy proposals that we often read about and comment here. But there are some stories that just write themselves. From the Associated Press:

Birmingham Mayor Larry Langford is getting lots of questions from the Birmingham City Council about his proposed 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. hikes and revitalization plans.

His proposals include doubling the business license fees and a one percent increase in the 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. . Langford said the money would help fund a domed stadium, transit system, scholarship programs and police department among other things. Yesterday, the new mayor met with council members to answer questions about his plan.

The city council today is expected to set up a series of public hearings before it takes a vote.

A taxpayer-funded domed stadium for Birmingham, Alabama? Is Birmingham going to try to lure professional sports teams besides arena football and minor league baseball to an area that has fewer people than Richmond, Virginia? And even if it were successful at luring a team, would this produce any net economic benefit, considering the opportunity cost-that is, considering the other things that money could have been spent on, especially given that it is partially funded by taxes on business licenses? Not likely, despite what “economic impact” the mayor may claim.

Or will the city try to get the annual Auburn-Alabama football game to come back to Birmingham? The revenue impact of that single game per year would not even come close to paying for a new domed stadium. And how willing would the two schools be to give up their biggest home game every other year to play in a dome? Plus, how many football stadiums does one area need? Currently, Birmingham has Legion Field, which is where UAB plays. It holds about 71,000 people. And there is a newly refurbished 92,000+ seat football stadium located about 50 miles from Birmingham in Tuscaloosa.

Raising taxes on businesses and consumers to pay for sports stadiums is quite possibly the worst fiscal policy decision local governments can make. Unfortunately, they keep giving handouts in the name of sports, despite the fact that public finance experts who are both conservatives and liberals despise such corporate welfare.