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Tax-Exempt Municipal Bonds and the Financing of Professional Sports Stadiums

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  • Austin J. Drukker
  • Ted Gayer
  • Alexander K. Gold

Abstract

This paper examines the role of federal tax subsidies in the form of preferences granted for bonds that state and local governments issue to finance the construction of professional sports stadiums. We examine 57 stadiums built since 2000, 43 of which were funded, at least in part, with federal tax expenditures in the form of tax-exempt municipal bonds. We estimate that the present value subsidy to the bond issuers was $3.6 billion and the total revenue loss to the federal government was $4.3 billion. We conclude with suggested reforms to reduce or eliminate this inefficient subsidy for professional sports stadiums.

Suggested Citation

  • Austin J. Drukker & Ted Gayer & Alexander K. Gold, 2020. "Tax-Exempt Municipal Bonds and the Financing of Professional Sports Stadiums," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(1), pages 157-196, March.
    • Handle: RePEc:ntj:journl:v:73:y:2020:i:1:p:157-196
    DOI: 10.17310/ntj.2020.1.05
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    Cited by:

    1. Brad R. Humphreys, 2023. "Professional Sports Subsidies and Urban Congestion Externalities: Assessing 50 Years of Failed Urban Economic Development Policies," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 49(4), pages 457-474, October.
    2. Wanyoung Lee & Yoonso Choi, 2024. "Critical Interpretation of Spatiality in Professional Korean Football Stadiums: Relph’s Theory of Placeness," Sociological Research Online, , vol. 29(1), pages 204-220, March.
    3. Zachary T. Keeler & Heather M. Stephens & Brad R. Humphreys, 2021. "The Amenity Value of Sports Facilities: Evidence From the Staples Center in Los Angeles," Journal of Sports Economics, , vol. 22(7), pages 799-822, October.
    4. Imran Arif & Adam Hoffer & Brad Humphreys & Matthew Style, 2022. "New sports facilities do not drive migration between US cities," Economics of Governance, Springer, vol. 23(3), pages 195-217, December.
    5. Jakar, Gidon S. & Carr, Jeff & Rosentraub, Mark S., 2022. "A sport-anchored development district and densification: A comparative mixed effects analysis," Land Use Policy, Elsevier, vol. 121(C).

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