The corporate welfare queens are at it again.
According to the New York Post, multi-billionaire Buffalo Bills owner Terry Pegula is poised to receive $1 billion in government funding for a new stadium… to be built right next to their current stadium. The funding will be split between New York State and Erie County, making it a record-breaking deal. The owners will be left with a mere $400 million price tag for the $1.4 billion stadium—while taxpayers subsidize the rest.
Though the deal is still being finalized legislatively, it seems a likely conclusion. In a typical move, the Bills’ owner, Terry Pegula, threatened to take his team out of state if he wasn’t given the public funds.
After Pegula made this threat, “everyone in government folded like a cheap suit,” one source told the Post.
In response, New York Governor Kathy Hochul said, “Any reports of details are premature. As we have said repeatedly, negotiations are ongoing.” But that’s typical deflection.
As far as the threats are concerned, recipients of corporate welfare use this tactic to keep the money flow coming for years. Once cities and states give a company corporate welfare they want to keep their investment in the area. (How else can they claim to be creating jobs and spurring tourism?) Knowing this, those sucking from the public’s teet constantly threaten to move should they not continue getting access to the public’s piggy bank.
If there’s one thing we should all be able to agree on, it’s ending this kind of corporate welfare.
The government picking winners and losers in the market is not only unjust, it’s a waste of tax dollars that rewards business owners for their connections instead of the value they create for consumers. It isn’t free-market capitalism. It means taxpayers incur the losses while never reaping most of the benefits.
But though this policy is unpopular, it is also pernicious. Our politicians continue to hand out our tax dollars to industry insiders throughout every level of the government, and one of their favorite causes is sports stadiums.
According to US News, 84 new facilities were built for professional US sports teams between 1990 and 2010, with combined taxpayer subsidies totaling $20 billion.
Corporate welfare should be abolished entirely.
It’s unethical and a bad investment for the public, and it usually ends up spending far more per job “created” under these schemes than it would cost the market to create them.
The real way to attract economic growth is simple: low taxes, low cost of living, and a deregulated economy that’s friendly to entrepreneurs. These are the only economic policies the government should be involved in creating.
But, while we can push for a complete end to corporate welfare, it is unlikely we’ll see a cease in this practice anytime soon. Politicians love to cut red ribbons and claim ownership of economic success, real or imagined. In the meantime, we should demand that they structure these deals with clawbacks and contracts that hold the business to the area for a certain number of years.
Should the deal in New York go through for the Bills, this is the very least lawmakers could do to try to ensure taxpayers see a return on their investment.