Hit By Pitch

What's wrong with Pawlenty's stadium push? Everything.

Since he became governor, Teflon Tim Pawlenty has steadfastly driven Minnesota politics to the far right by shredding the state's social safety net while running roughshod over our tradition of fiscally prudent government investments. But the governor's resounding triumph during last year's legislative session--in which Pawlenty "solved" a $4.6 billion budget deficit by decimating dozens of programs, raiding

one-time monetary sources such as the tobacco fund, and forcing tax increases down on local units of government--has apparently emboldened him to believe he can get away with anything. That's the only way to explain his ill-timed, half-baked push for a billion-dollar pair of stadiums, a policy proposal that is as long on hubris as it is short on common sense.

It is fair to say that the notion of passing legislation to build one new ballpark, let alone two or three, would not have any currency during this session without Pawlenty's advocacy. It was the governor who created a committee to solicit stadium proposals from local units of government, who stocked the committee with stadium proponents to ensure the proposals would be treated sympathetically, and who appointed his chief of staff to chair the committee as a signal that the issue was a high priority on his legislative agenda.

To further punctuate his position, the governor then publicly declared that he would not allow the baseball Twins or the football Vikings to leave town on his watch. This forceful shove from the state's most powerful public official is the only reason the stadium issue is part of this year's political landscape.

Yet despite Pawlenty's heavy hand, the chances of any stadium bill passing the legislature this session currently appear to be slim and none. Indeed, the arguments against building new ballparks right now are so voluminous and compelling--in general or particular, in terms of politics or practicality--that it's hard to fathom why the governor has chosen to throw his weight behind the issue. Why is funding a billion bucks worth of ballparks a bad idea? Let us count the ways.

 

State and local government coffers can't absorb the hit.

The carnage from last year's draconian budget cuts is still reverberating throughout the state. Hundreds of teachers have been laid off, thousands of citizens have been priced out of health care, and nearly every state agency is showing the strain of coping with a greater demand for services with fewer resources. What's more, unless the economy shows a miraculous improvement, state lawmakers are staring at a deficit in next year's biennial budget of more than a billion dollars, this time without any tobacco fund or bureaucratic sleights-of-hand to help bail them out.

At the local level, mayors and county commissioners are reeling from the huge cost shifts and tax increases thrust upon them by Pawlenty's last budget "fix." Despite these hardships, beleaguered citizens who have seen their services diminished and their local tax bill rise are now being asked to provide hundreds of millions of dollars to bankroll new homes for fat-cat owners of sports franchises.

 

There are no consequences for inaction.

It has been a long-standing tradition of professional sports team owners to blackmail taxpayers by threatening to move their franchises if public monies for new stadiums aren't provided. This year, Pawlenty himself did the owners' dirty work by raising the specter of the Twins and Vikings leaving town. But for many years, Minnesotans have successfully called this bluff by denying stadium handouts, a demonstration of political willpower that seems increasingly shrewd in light of recent events regarding ballpark funding in other cities. Publicly financed baseball stadiums in Milwaukee and Pittsburgh have not delivered on their proposed benefits, and the most recent ballpark deal, in St. Louis, where the team's tradition is richer and its fan base more loyal, has been brokered almost exclusively with private money.

The threat often wielded by local ballpark boosters, that the Twins will be contracted by Major League Baseball, is becoming more and more specious. The franchise in Montreal is in such a shambles that it is operated in caretaker fashion by the league and plays "home" games in two locales, yet it is still not certain that it will be contracted in 2006. By contrast, the Twins have won two consecutive pennants and currently own one of the game's best records. How embarrassing--and thus improbable--would it be for the barons of the game to shutter the team?

As for the Vikings, they have an ironclad lease to play in the Metrodome until 2011. There is no compelling reason why legislators can't wait at least a year to see if the state's finances improve before underwriting a new football stadium. Besides, if the Vikings get a new facility, taxpayers must either continue bearing the cost of maintaining the Dome for the U of M Gophers, or add funding for a new college football stadium to the tab.

 

Bottom line, it's a bad investment.

During testimony before the state's House Tax Committee last week, Arthur Rolnick, the research director at the Federal Reserve Bank in Minneapolis, exposed the canard that underwriting stadiums was a sound economic investment of public resources. Citing a sheaf of studies on the issue, Rolnick declared that the fiscal benefit to communities who help build ballparks does not justify the expenditure, particularly when compared to the myriad of other needs that could be addressed with the money. The biggest bang for the buck, Rolnick repeatedly emphasized, could be obtained by investing in programs assisting at-risk children ages five and under, which would result in an economic return of 12 percent above inflation.

Of course, it was precisely those programs that fell under the swing of Pawlenty's budget axe during the last session. In any case, Rolnick's testimony--and supporting documentation--was so unassailable that even stadium proponents on the committee were conceding that the supposed boon from ballparks was not its economic stimulus but the more nebulous notion of an improved "quality of life" for Minnesotans.

This begs the question of how one defines "quality of life" in this state. Is our overall standard of living better enhanced by sufficiently educating our children, tending to our sick, and insuring our transportation infrastructure and public safety needs, or by having the opportunity to watch a baseball game outside? Apparently, the governor believes the latter. Otherwise, he would have said that he wasn't going to let our public schools, universities, nursing homes, and safety-net hospitals be diminished on his watch, rather than drawing his line in the sand on the Twins and the Vikings leaving town.

 

Taxes, by any other name, will subsidize billionaire owners.

Having made his reputation as the politician who always says no to more taxes, Pawlenty has to claim that Minnesotans will not pay more to build the stadiums. But staunch allies of Pawlenty from the governor's own party, such as House Tax Committee Chair Ron Abrams (R-Minnetonka), couldn't let that fallacy go uncorrected. Included in the stadium bill is $100 million in state money, ostensibly gleaned through tax increment financing. This assumes that the stadiums will generate so much additional revenue that the excess dollars will be sufficient to pay off state bonds.

That revenue is far from guaranteed. Recently, the expected windfall from a stadium in Pittsburgh was not enough to cover the TIF component of its financing, forcing the state to use existing revenues to make up the difference.

Besides, using TIF to cover the cost of a ballpark is a perversion of its original intent. Tax increment financing is supposed to be used to stimulate economic development in areas that are blighted or otherwise generally unsuitable for commerce. That hardly describes the sites being proposed for ballparks. Ironically, Abrams and other state legislators recently enacted curbs on the use of TIF, after local communities (especially Minneapolis) had abused the process to the point of depriving the state of more than $30 million per year in revenue. That's why Abrams has announced that he would not vote for a stadium bill that included a TIF component.

 

It's a half-baked proposal.

Once the stadium bill was finally introduced by Rep. Doug Stang (R-Cold Spring) last week, House Tax Committee members had little trouble unveiling all the holes and uncertainties it contained. Although it has generally been assumed that franchise owners Carl Pohlad and Red McCombs would contribute a third of the funding costs for their respective stadiums, the bill did not define the terms and timetable for the owners to pony up, creating great opportunities for semantic loopholes and other mischief.

(Skepticism over this matter is warranted, considering that in a past deal Pohlad's supposed contribution was revealed in the fine print to be a loan that would be repaid to him--with interest--by the public.)

The bill also gave enormous power and little oversight to a stadium authority--the majority of whose members would be appointed by Pawlenty--that would oversee the ballpark construction. Last week, Abrams criticized the governor's stadium committee for cutting and pasting together a bill that fulfilled the teams' wishes with very little critical thinking, and leaving it to the sports authority to sort out the details.

 

It smacks of political hypocrisy.

It's disingenuous of Pawlenty to posit himself as a fiscal conservative--one who slashed and burned a raft of social programs of proven merit last session and faces a billion dollars' worth of red ink in the next one--and then beat the drum for ballparks that are of no immediate need. But the governor's hypocrisy goes deeper than that, to when he was a legislator in the House.

As Senate Tax Committee Chair Larry Pogemiller (DFL-Minneapolis) points out, "prior to this year, the governor spent his entire legislative career adamantly lobbying against any stadium bills, working hard to ensure that they didn't pass. The Twins' stadium would be half-built by now if the bill we passed in the Senate two years ago hadn't been screwed by then-Majority Leader Tim Pawlenty, who wanted to make sure only Minneapolis paid for it, which lost the support of the Minneapolis delegation."

Pogemiller's account is especially relevant given that Pawlenty's justification for reversing himself on the stadium issue is that he now must represent the wishes of all Minnesotans and not just the people in his former legislative district. But if stadiums are truly a statewide concern, why force Minneapolis to bear the financial burden two years ago? More to the point, why not provide a statewide funding mechanism for his current stadium scheme rather than saddle local governments with the financial burden?

The answer, of course, is that he would have to unambiguously raise state taxes to get any stadium package approved.

The next few weeks will determine how much political capital the governor is willing to expend to see this through. The DFL-controlled Senate will not take up the stadium bill until it's passed by the Republican-controlled House. Even then, Pogemiller says, last year's budget cuts have made many DFLers who have supported stadium bills in the past more reluctant to green-light one now.

Thus, Pawlenty will have to convince a majority of Republicans in both the House and the Senate to swallow this billion-dollar turkey. Can that be done without the gov reversing himself on additional taxes? According to Pogemiller, Pawlenty has been "working behind the scenes, actively promoting the expansion of gambling, which is the only way for him to generate revenue without an explicit tax increase."

No doubt Teflon Tim is hoping that voters will continue to believe that, despite the presence of an extra stadium or two, he remains an amiable but hard-nosed man of conservative integrity, standing guard over their pocketbooks.

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