Taxpayers To Be Billed a Billion Dollars for Buffalo Bills’ New Stadium
March 29, 2022 | Tags: Government spending, REASON, Subsidies
The NFL's Buffalo Bills are probably most well-known for losing four consecutive Super Bowls in the early '90s—a remarkable accomplishment ultimately overshadowed by historic failure.
Now, the Bills should once again earn a place in sporting infamy. On Monday, New York Gov. Kathy Hochul, a Democrat, announced that the team would receive what The New York Times calls the largest taxpayer-funded stadium subsidy in NFL history.
State and local taxpayers will contribute about $850 million toward the estimated $1.4 billion stadium project. Most of the public funds are coming from the state but Erie County, where the Bills' new stadium will be built down the street from their current home, will contribute $250 million of the total. That's a huge contribution from a local government that in 2021 spent a little more than $1.5 billion on its entire budget. The Bills owners, which include multi-billionaire Terry Pegula, are chipping in just $300 million while the NFL will cover the remaining $200 million with a loan to the team, according to the Times.
"It's a great day for western New York and I'm really proud to negotiate such a good deal for the state and our many, many fans," Hochul said, according to the Associated Press.
But if she really thinks this is a good deal, voters in New York may want to worry about Hochul's judgment.
In fact, as Field of Schemes blogger Neil deMause parses in his detailed rundown of the stadium deal, the actual public subsidies probably exceed $1 billion—and that doesn't account for things like interest payments on the borrowing that the state and county will likely have to do to finance the agreement. The fine print of Monday's announcement, deMause notes, puts the public on the hook for $6 million annually for the next 30 years to fund upgrades to the stadium and another $6.6 million for the next 15 years to fund "maintenance and repair." All told, that's an extra $160 million in taxpayer funds pledged to the project beyond the $850 million price tag.
As usual, Hochul and other officials are promising that all this public spending is worth it because the stadium will provide an economic windfall to western New York. "New Yorkers can rest assured that their investment will be recouped by the economic activity the team generates," Hochul said Monday.
That's almost certainly not going to happen.
Just to make ends meet on the roughly $1 billion public costs, the stadium would have to generate about $70 million in new annual tax revenue over the next 30 years, deMause notes, for the same reason that paying off a mortgage over 30 years requires spending more than the sticker price for a house. The Bills and state officials have spent months waving around a study showing that the project will generate $27 million annually for the state and local governments, and Hochul cited that figure during Monday's announcement. But even if you take that study at face value—and you probably shouldn't—generating $27 million annually for 30 years isn't enough for taxpayers to break even on the costs of the project.
Ah, but what about the jobs? Hochul touted the potential for the new stadium to create 10,000 jobs—but since the Bills are already located in Buffalo, any permanent jobs with the team are unlikely to be affected by the construction of a new stadium. So those are almost entirely going to be temporary construction jobs—jobs that will cost the public about $100,000 each.
This is what Hochul is calling a "good deal."
There is at least one entity that agrees with the governor about that: Pegula Sports and Entertainment, the joint venture that owns the Bills. "This is a good investment for everyone," Ron Raccuia, the Pegula Sports and Entertainment executive who led the Bills' side of the negotiations, told the A.P.
But Hochul and the Bills' billionaire team owners might not get such a warm reception from taxpayers or from the state's legislature, which still has to approve the deal. State Rep. Ron Kim (D–Queens) issued a loud rebuke to the agreement via Twitter:
I don't recall reaching any fucking deal to give the 8th richest NFL owners $850 million of taxpayer $$ https://t.co/ZV1h6BfPVk
— Ron T. Kim (@rontkim) March 28, 2022
Rep. Tom Suozzi (D–N.Y.), the congressman who recently announced plans to run against Hochul in this year's gubernatorial election, criticized Hochul for "forcing hard-working New Yorkers to fork over their tax dollars to help a billionaire donor get even richer. She'll enjoy the new skybox leaving NYers saddled with higher taxes." And Sochie Nnaemeka, director of New York's Working Families Party, said public dollars should not be "subsidizing an oil billionaire's new stadium."
The real costs of the stadium deal are significant, of course—this would be the biggest public handout in NFL history, after all—but any assessment of the Bills' new stadium deal must also consider the unseen costs. Any public spending is an exercise in priority setting because public resources are not unlimited. The decision to spend $1 billion on a stadium means that same $1 billion can't be used for something else—or left in taxpayers' wallets.
And, quite simply, there are a lot of things western New York probably needs more than an expensive new football stadium. The population of Buffalo is about half what it was when the Bills were founded in 1960. Some of those people are probably fleeing the region's harsh winters, but most of them left to seek better economic opportunities elsewhere. New York's combined state and local tax burden is the highest in the country, according to the Tax Foundation, a nonpartisan tax policy think tank, making the state a difficult place to work or start a business.
Which means that America's most put-upon taxpayers are now being asked to foot the bill for the Bills' billionaire owners' new stadium. How does that make any sense?
"I'm disheartened, but not surprised, to see NY throwing an incredible amount of taxpayer money at a stadium for a franchise owned by billionaires," says David Ditch, a longtime Bills fan and transportation policy analyst at the conservative Heritage Foundation. "Upstate N.Y. will always struggle to compete with less-frigid locales, but it doesn't stand a chance when both the weather and business conditions are so much better in other states."
Bills fans might have suffered through four straight Super Bowl losses and, in January, one of the most gut-punching playoff defeats in NFL history. Now Hochul wants to hit them in the wallets, too.
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