Wednesday, February 07, 2007

Public Funding of Circuses

I’ve kept out of the whole Real Salt Lake stadium debate until now. I don’t live in Salt Lake County, so I didn’t have the same kind of stake in the matter as did the county’s citizens, when the county was considering bankrolling the deal that fell apart when the numbers didn’t add up. I commented little about the whole process. I just sat back and watched.

But yesterday, the Utah Senate voted to support Governor Huntsman’s plan to divert 15% of the hotel tax to help fund a stadium for RSL (see D-News article). Having had a career in accounting, I understand that technically, that’s not money out of my pocket as a taxpayer. But that position is simply an accounting trick. In a representative democracy, government revenues from any source belong to the citizens. The citizens’ representatives determine how those revenues should be managed. This means that instead of reducing the hotel tax or using that 15% for other projects, it will be used to build a venue for a private entertainment business.

This goes against my limited government instincts. Why should state government subsidize a private entertainment venue? I heard SLC Mayor Rocky Anderson on the radio saying, “That’s how these things are always done — with a public-private partnership.” That does not make it right.

I commented on the Senate Site post about this issue and received this very thoughtful response from Alien Wannabe (at 1:06 AM no less).

I have tremendous respect for you. And, I think I understand your position. My roots are also in the conservative wing of our party, so I see you as being a kindred spirit.

In the limited time I have here, I will try to supply an answer to your question:

I am a Republican, not a Libertarian, for a good reason. Just as I do not believe in the "maximum" government of the Socialists and Democrats, I do not believe in the "minimum" government of the Anarchists and Libertarians either. Rather, I believe in the "optimum" government of the Republicans.

For me, that is what the divinely inspired Constitution is all about--finding that right balance. As you remember, the original government of the United States, the Articles of Confederation, was too weak. It didn't work. The founding fathers replaced it with one that gave more power to a central government--they recognized the need for balance, "optimum" rather than "minimum."

Too many of my fellow Conservative Republicans fail to seek this same balance. They start idealizing "minimum" government as if they were Libertarians instead of Republicans.

No one understood the need of limited government more than Thomas Jefferson, but he also understood this principle of balance. He further understood that "limited" is a different concept entirely than "minimum." And, because of that, he was able to act in his country's best interest at a crucial moment in history.

When France offered to sell the Louisiana Territory to the United States, Jefferson wisely jumped at the opportunity, even though doing so seemed to require that he use authority not explicitly granted to him in the Constitution.

Thank goodness he had the intelligence to do what he did! His actions have proven themselves over time to have been a tremendous blessing to our nation. Indeed, one wonders how dangerously handicapped and stunted our country would have been if he had not the vision and wisdom to do the right thing instead of the simple thing.

Too often we conservative political junkies fall into the trap of being intellectually lazy. We gravitate toward a simple direction, right, instead of toward actually doing the "right" thing.

I have learned in my life that doing the "right" thing requires balance--effort and judgment. Following a simple direction requires no effort and no judgment, we simply turn off our brain and say either "more government programs!" (left), or "less government programs!" (right)

In the past, some who have famously fallen into a similar trap have declared such things as "It is wrong to heal on the Sabbath!" These folks couldn't get past the direction of following the letter of the law, so they failed to understand the balance of the spirit of the law.

The spirit of our national and state constitutions is to provide for the common good. As a conservative Reagan Republican, I believe that often requires government to get off the backs of the people, so that their creative energies can be unleashed. But, sometimes it means that the government needs to step in, as appropriate, to build such things as the Eerie Canal--all for the common good.

For me, Real Salt Lake's stadium falls into this category. I am convinced that it will produce benefits for our state that are just as vital to the common good as schools and highways. That is why I enthusiastically support the state chipping in a small portion to help make it a reality.

I hope this, in some way, does justice to your excellent question.

Now, it’s no secret that I’m not a sports guy. But I’m not opposed to professional sports arenas. I just have concerns about using public money for that purpose. Larry Miller did not get public money to build the arena formerly known as the Delta Center. That would be an exception to Rocky’s statement above. And, although I respect Alien Wannabe’s thoughts on the matter, I simply can’t bring myself to put sports arenas in the same category canals, roads, schools, and libraries. I’m sure that plenty of sports fans would disagree with me on that, but I can’t see how athletic entertainment is as essential as education or transportation.

I’m not a pure libertarian, but that does not mean that all libertarian principles are bad. In fact, I think we need some rabid libertarians to counter the constant push to grow government. I understand the enthusiasm many are expressing for the soccer stadium. Heck, it’s probable I could attend events at that venue someday. But I’m afraid that I cannot bring myself to support public funding for it. Still, it seems that my view on this matter is like a feather in a windstorm.


Arelius said...

The state isn't funding the stadium. The state is buying the land on which the stadium will be built and then leasing the land to RSL.

As Governor Huntsman explained yesterday, "This is an economic development investment in valuable property."

Anonymous said...

Larry Miller DID get public funding for the ex-Delta Center...

There was an excellent article re the same yesterday in the Trib.

Anonymous said...

Larry Miller DID get public funding for the Delta Center/ESA.
It says so right on the Delta Center/ESA Web page. In the first paragraph actually.
What do you think Redevelopment Agency funds are?

The money is not being DIVERTED from anything. The money would not exist if it were not for the extension of the Transient Room Tax, that was extended in order to provide funding for the project.

Anonymous said...

Well written, but you have several facts just plain wrong. Most notably, Larry Miller DID get public money for the Delta Center. Almost the exact amount that RSL is getting (in today's dollars). Funny how the media has tried to keep that quiet, no? Also, the TRT money CANNOT be used for education or transportation, ONLY for projects relating to tourism and the like. Once you see those facts, it starts to make a lot more sense, but "sense" doesn't necessarily sell papers, so most people haven't heard the truth.

Anonymous said...

Sorry for the repetition, looks like some other informed tax payers beat me to it.

Scott Hinrichs said...

Thank you all for putting me straight on the ex-Delta Center funding. I'm interested in truth, not in simply grinding an axe.

I think I have a little less indigestion about the stadium issue since the state is simply acting as a leaseholder. There is always risk involved in such a position, but perhaps when potential alternative uses are considered, the risk isn't so bad. There are some examples of how this kind of thing has turned out well. Of course, there are some unfortunate examples as well.

As far as the TRT not being able to be used for anything else, I think I addressed that issue. It's an accounting gimick. At the end of the day, the state has one huge bucket of money. Yes, we have rules in place about which funding sources can be used for which expenditures, but since there are factors that fall in the overlap and marginal areas of all of these various rules, enough funds can flow between different buckets to the effect that using funds here still means you can't use them elsewhere and cannot fund a TRT decrease.

Also my comment contrasting athletic entertainment with education and transportation was not dealing with accounting. It was a moral valuation in response to Alien Wannabe's thoughts on the matter.

"Extension" is an interesting euphamism for a tax increase (which is the same as refusing a decrease). And although some of this tax would be paid by non-residents, I'm not sure that makes it right.

In the end, I'm still not convinced that this falls within the definition of good government.

Charles D said...

While Mr. Wannabe's response was helpful in understanding his political philosophy, the key sentence is "I am convinced that it will produce benefits for our state that are just as vital to the common good as schools and highways."

I can certainly understand that the education of Utah's children is a common good, and that providing a safe and efficient transportation system is a common good, why does a sports stadium qualify?

Certainly one could make a case that there could be economic benefits to the locality from events in the stadium, but should the government be in the position of funding private ventures for which there might be economic benefit? In that case, how about bribing a corporation to locate a major manufacturing plant in the SLC suburbs? The benefits of such a deal would far outweigh the benefit of a sports stadium. Should government do that?

Schools and highways are common goods and they are owned and operated by the people through their government. We don't construct a school building then lease it out to a private company to run the school with no oversight and no guarantees. That would be foolish and so is this stadium idea.

Scott Hinrichs said...

DL, I agree with this moral distinction. I have difficulty coming to terms with this being the kind of thing government should do.

Alienated Wannabe said...

Hi Reach Upward,

I respect your position, and I do not fault you for it.

I think that we both would prefer to see generally smaller and more limited government. This is so, because we probably both know that once a freedom is lost to government, it is very difficult to get it back, so it is best not to relinquish that freedom in the first place. One of the best ways to do that is to keep government small--less taxes, less programs, less power. I get it.

But, as I said, it comes down to finding the right balance, because having too small of a government can also be dangerous.

With respect to the "common good" that I referenced on the Senate Site, I did not go into what that was exactly because I had already done so on SLCSPIN, and I just didn't want to get into it again.

But, here is one of my key arguments: Because I am a sports fan, I think I understand how much publicity and good will are generated for a community with professional sports franchises. It is literally incalculable.

Our state government spends millions of dollars to encourage tourism and economic development in Utah. And, it works. We all benefit from it, even though most of us do not know what the government has been doing.

Real Salt Lake provides a function that effectively synergizes with the states other efforts. It powerfully, and almost constantly, reinforces the Salt Lake and Utah brands.

It encourages tourism. It makes our community more attractive to business looking to relocate to Utah. It helps unify an often divided community. It helps us form stronger connections to other league cities and Madrid, Spain. It encourages other related businesses to develop in the area. It expands the tax base. The list goes on and on.

When all of this is taken into consideration, the 35 million dollars seems like a very small and reasonable investment.

Anyway, I'm kind of burned out on the subject now, so I won't burden you further. But, thanks for quoting me, I was honored to have appeared in such a great blog as Reach Upward. (You are one of my favorites.)

Alienated Wannabe

Scott Hinrichs said...

AW, thanks for your comments. I can respect the view of this being an alternative form of tourism advertising. As to whether it turns out to be a worthy investment or not, only time will tell.

Frank Staheli said...

Scott et al,

I wrote about Larry Miller's public funding here. If I understand it correctly, there is more than a nuance between Larry Miller's public funding and Dave Checketts' public funding. Here's the pertinent snippet from the above link:

Larry H. Miller received NO public funding for his $80 million motor sports park in Tooele, and five years remains to pay off the $20 million in Redevelopment Agency funds he received to finance the Delta Center. Dave Checketts, on the other hand, is not on the hook for even a dime of his $35 million.