Cuyahoga County Sin Tax

[caf]

I think Deezus' larger point is that the government should not levy a consumption tax of any form to subsidize billionaires. Think about that..

Supply and demand.

The city owns the lease on the stadium. It's not like they have nothing. If they wanted the stadium to attract more events, they should have put a dome on it. The renovations that are being levied right now are a direct result of cost-cutting measures to make sure the initial levy passed. For fucks sakes, the original stadium didn't have escalators. Lerner added them out of his own pocket. It's not his fault the city didn't want to spend extra to make their product more attractive to other possible events.

I also don't understand why you are comparing MLB to NFL either. The Indians could move from Cleveland, and they would probably be successful if they wanted. The demand from the city isn't there. However, MLB revenue sharing is very lucrative and there is no financial reason for the Indians to move. Comparing the valuation and revenue of an NFL team to an MLB team is comparing apples and oranges.

Jimmy Haslam bought the Browns franchise for a billion dollars. The city can barely pass a levy for a fraction of that price... are you really suggesting the city put up a billion dollars for an investment that could, as Cuban put it "implode in ten years"? That sounds like a bad investment. The levy is extending the life of the stadium while hedging the risk of the NFL implosion because of that 'Billionare owner'.

It's a symbiotic relationship. The only place where a city owned franchise has really worked is Green Bay, and that's because their market was so small it forced the peoples of Green Bay to personally invest in 1950. The difference in value of an NFL franchise from 1950 to 2014 is astronomical. It is cost prohibitive for the city to financially back an NFL franchise today, and would be a terrible investment in terms of risk.

Unless you want to pass a billion dollar levy for fifty years, the NFL implodes, the value of the Browns goes to zero, and now the city is paying a billion dollars for absolutely nothing. I mean that sounds like a worse deal to me than a small investment in stadium upgrades.

 

[gourimoko]

Supply and demand.

Has absolutely nothing to do with the point that the government should not levy taxes that predominantly benefit private owners of sports teams. Again, as mentioned, the socialization of the debt of sports but the privatization of it's profits to an extremely small minority of beneficiaries.

And I hear what you are saying but it's missing the larger point that the economic benefit for any given city is largely debatable and in Cleveland's particular situation it is absent altogether. The most comprehensive economic study of Cleveland's stadium construction, tax levies, and sports-related economic growth (Rosentraub, Austrian 1997), demonstrates that when we take particular projects such as The Gateway project, Cleveland spent $231,000 per job created. The inescapable argument is that Cleveland was not improved by stadium building or renovations in the past 30 years, and that tax revenues could have gone towards more efficient means of job creation.

For many cities (not necessarily Cleveland - at this point in time), it may be a wiser long-term investment to own the majority stake in the team. At this point, given the recession and Cleveland's $250M debt, it's not in a position to buy any sports franchise; but that's not the point being made here at all. What we're discussing is a paradigm shift for the average, not the bottom, regardless of the situation in Cleveland. A model where the citizens who pay a large sum of taxes and patron the stadium have an investment that cannot be taken away.

I think that's the point of the article, it's my larger point, and it would resolve the issues other posters have brought up as well.

 

[KB]

Hi Joe,

Welcome to RCF. And welcome to the modern era or as most call it the 21s century. I understand your point of view. But in the grand scheme of things if pennies on every drink I have paid for since I turned 21 would probably add up to upper deck Ken Griffey Jr gem mint ten rookie card.

It's a privilege, especially nowadays, to have pro sports teams in your city. As someone who grew up here and still lives here I have no issue supporting this tax.
I may regret not ever getting that baseball card, but at least I have some teams to support and fun venues to go to.

I actually have that card sitting in my closet, Graded at 9.5

 

[Soda]

I'm all for charging smokers as much as we possibly can. I'll pay to have my weekend drinks; you pay for your habit. Clevelanders act like every business in the City is lucky to be here when it's quite the contrary.

 

[Deezus]

I think Deezus' larger point is that the government should not levy a consumption tax of any form to subsidize billionaires.

EXACTLY. Its the height of absurdity. East Cleveland looks like a fucking ghost town, yet we're going to throw hundreds of millions at stadiums that, while technically are owned by Cleveland, earn the franchise's billionaire owners large sums of money. Cleveland franchise owners are basically using our collective love for these franchises to effectively extort money from taxpayers under false pretenses (like the threat of our teams leaving and the ridiculous assertion that city officials would have to cut back on fire/police to pay for the stadiums without a sin tax). Enough is enough.

Here's an interesting point... Jimmy Haslem and the Browns just took in $102 million dollars for the naming rights to Cleveland Browns Stadium (via First Energy). ...As the "owners" of the stadium, why didn't the city/county receive any of this profit? Oh, that's right, because the owners should make most of the money while the taxpayers foot the bill. Got it.

CLEVELAND (92.3 The Fan) – FirstEnergy will pay the Cleveland Browns $102 million over 17 years for the naming rights to the team’s 73,200 seat stadium the Akron Beacon Journal reported Thursday.

Browns and FirstEnergy officials said Tuesday that both parties agreed to keep the terms of the deal to rename the stadium ‘FirstEnergy Stadium: Home of the Cleveland Browns’ private.

Browns owner Jimmy Haslam said that the revenue from the deal was not specifically earmarked but would be used to help keep the franchise competitive on and off the field in the NFL.

Haslam and the Browns are in the process of planning renovations to the 14-year stadium, the extent and cost of which have yet to be determined. Haslam was also non-committal when asked who will pay for the upgrades to the building which opened in 1999.

Source: http://cleveland.cbslocal.com/2013/01/17/report-browns-naming-rights-deal-worth-102-million/

WEIRD.

 

[Soda]

EXACTLY. Its the height of absurdity. East Cleveland looks like a fucking ghost town, yet we're going to throw hundreds of millions at stadiums that, while technically are owned by Cleveland, earn the franchise's billionaire owners large sums of money. Cleveland franchise owners are basically using our collective love for these franchises to effectively extort money from taxpayers under false pretenses (like the threat of our teams leaving and the ridiculous assertion that city officials would have to cut back on fire/police to pay for the stadiums without a sin tax). Enough is enough.

Here's an interesting point... Jimmy Haslem and the Browns just took in $102 million dollars for the naming rights to Cleveland Browns Stadium (via First Energy). ...As the "owners" of the stadium, why didn't the city/county receive any of this profit? Oh, that's right, because the owners should make most of the money while the taxpayers foot the bill. Got it.


Source: http://cleveland.cbslocal.com/2013/01/17/report-browns-naming-rights-deal-worth-102-million/

WEIRD.

1) East Cleveland is a separate City from Cleveland. If you want to bark at anyone, you may have some right to complain about Cuyahoga County.

2) The Browns and Mr. Haslam committed to putting 90 million dollars into the City owned First Energy Stadium not even a year ago. This off-season, they signed 7 free agents thus far. Let's not pretend like none of Jimmy's money is going into the team as well as City owned property.

 

[Deezus]

1) East Cleveland is a separate City from Cleveland. If you want to bark at anyone, you may have some right to complain about Cuyahoga County.

The tax being proposed is a county tax. Thus, I think I'm "barking" at exactly whom I should be. Regardless of that small example, the point is that a struggling city/county could do far more effective things with hundreds of millions of dollars than subsidize a sports franchise. Numerous studies back this assertion up. Gourimoko and I already posted two of these.

1)2) The Browns and Mr. Haslam committed to putting 90 million dollars into the City owned First Energy Stadium not even a year ago.

Yes, but as the article I posted above (re: naming rights) mentioned, he did not commit to who would pay for it. You're mistakenly being fooled into thinking that we're obligated to pay for renovations that the team (NOT THE TAXPAYERS) decided to undergo. Lets make an analogy: If the stadium is a car, the Browns are, effectively, the engine that makes the car "go." Sure, you've got other necessary components (suspension, brakes, exhaust, etc.), but without the engine, the car isn't going anywhere. What you're arguing is that without asking, the owner of the engine should be able to slap some new paint on the car, throwing a nice set of rims on it, and then say that if we don't pay for it, they'll take the engine and move it to another car.

This off-season, they signed 7 free agents thus far. Let's not pretend like none of Jimmy's money is going into the team as well as City owned property.

So you're arguing that taxpayers should pay up because the Browns are signing free agents? LOL. Ask yourself this: Why would a billionaire buy a franchise for $1billion, renovate the stadium, and sign free agents?

Give up?

BECAUSE HE'S GOING TO MAKE TONS OF MONEY BY DOING SO. The more attractive the stadium is and the more competitive the team is, the more money he will make. Jimmy Haslem doing his due diligence as an owner should, by no means, be used as justification for the tax payers to foot a portion of the bill.

Billionaire owner makes money through a business, local taxpayers pay tax subsidies that directly help said business with little to no return on their investment. Whats wrong with this picture?

 

[caf]

I was born in Euclid, and moved out to Geagua county when I was in third grade. I never lived in Cleveland in my entire life.

I would say over 90% of my time and money spent in Cleveland has been on the Indians, Cavaliers, and Browns. If these teams did not exist, I probably would have only visited Cleveland once or twice in my entire life. Every year I travel up to see at least one home game for all of the sports teams. That is outside money being brought in to Cleveland. I can't imagine I am the only person that falls into this category.

You guys point out all the money that is being invested in these sports teams, because those are the hard figures readily avalible. Then you completely ignore the outside money that is being attracted to the city because of these attractions. Why? I have no idea.

 

[Chardon]

East Cleveland looks like a fucking ghost town

Throwing millions of dollars at East Cleveland isn't going to help it. Even if the local government gave money to people to open up business in that area, I sure as hell wouldn't want to be caught walking around that area.

Also, you could argue the Browns create jobs, creates tax dollars, provides entertainment etc...

I say Tax it. If you can't afford your cigs and alcohol, you need to quit. If you can't quit, you are weak and stupid.

Better not see you quoting me.

 

[gourimoko]

1) East Cleveland is a separate City from Cleveland. If you want to bark at anyone, you may have some right to complain about Cuyahoga County.

Really need to pursue a metropolitan plan similar to Indianapolis' Unigov project that merged the city with it's surrounding suburbs and the county government. Cleveland should exist as Greater Cleveland, or at a minimum, a substantial portion (if not all of) Cuyahoga County. This would fix broken cities like East Cleveland that have no chance of fixing themselves.

2) The Browns and Mr. Haslam committed to putting 90 million dollars into the City owned First Energy Stadium not even a year ago. This off-season, they signed 7 free agents thus far. Let's not pretend like none of Jimmy's money is going into the team as well as City owned property.

The larger point is that it is a losing investment, an inefficient use of government money, and a misappropriation of tax dollars to bolster a sports team in Cleveland while the city's credit was just recently downgraded on $250M in debt. The economic returns from the sports franchises in the city are not worth the overall investment of tax dollars.

If these owners want stadiums, let them build them and be responsible for their upkeep. Conversely, if a city wants a team, let them buy one. But these expenditures could be better directed to benefit the city rather than the sports teams.

 

[gourimoko]

Throwing millions of dollars at East Cleveland isn't going to help it. Even if the local government gave money to people to open up business in that area, I sure as hell wouldn't want to be caught walking around that area.

No one is talking about handing East Cleveland millions of dollars, that's not how you fix a city.

Also, you could argue the Browns create jobs, creates tax dollars, provides entertainment etc...

I'd say prove it.. The research I've found shows that Cleveland sports doesn't pay off considering the investment, and I referenced the Indians above.

I say Tax it. If you can't afford your cigs and alcohol, you need to quit. If you can't quit, you are weak and stupid.

The government shouldn't be in the business of taxing things in and out of existence, nor should it be giving that tax revenue to private entities for their own financial benefit that only tangentially benefits the city, indirectly. It's bullshit.

Better not see you quoting me.

See me on Eddy Rd mofo! :chuckles:

 

[Soda]

Yes, but as the article I posted above (re: naming rights) mentioned, he did not commit to who would pay for it. You're mistakenly being fooled into thinking that we're obligated to pay for renovations that the team (NOT THE TAXPAYERS) decided to undergo. Lets make an analogy: If the stadium is a car, the Browns are, effectively, the engine that makes the car "go." Sure, you've got other necessary components (suspension, brakes, exhaust, etc.), but without the engine, the car isn't going anywhere. What you're arguing is that without asking, the owner of the engine should be able to slap some new paint on the car, throwing a nice set of rims on it, and then say that if we don't pay for it, they'll take the engine and move it to another car.

I'm afraid the mistake is on you. I sat in the meeting(s) where this was discussed in its entirety and when councilpersons voiced their concerns and questions. The Browns most definitely committed to paying 90 million of the improvements. The City of Cleveland agreed to pay 2 million per year for 15 years, the Browns are footing the remainder.

Sin tax money goes into a fund and each of the teams in the City have an annual opportunity to present necessary improvements. The catch for the franchise is that this money can only go towards specific capital improvements that were listed within the ordinance when the sin tax was initially passed. So, the money from Sin Tax can only go towards making improvements that have a direct effect on property value. On top of that, even if the Browns/Indians/Cavs have legitimate projects that deserve sin tax money, they must still vet the contractors they're using as well as the building plan through council(s).

I vote for Sin Tax.

 

[Soda]

Really need to pursue a metropolitan plan similar to Indianapolis' Unigov project that merged the city with it's surrounding suburbs and the county government. Cleveland should exist as Greater Cleveland, or at a minimum, a substantial portion (if not all of) Cuyahoga County. This would fix broken cities like East Cleveland that have no chance of fixing themselves.

This proposal is currently being (finally) seriously considered. East Cleveland is sinking and the City of Cleveland would love the lemming voters that come with this acquisition. I agree that a metro plan is a good idea.

As far as investments in public stadiums, I can't contend that it isn't the greatest use of money. We have them, though, so you can't neglect them and the improvements will need to be made somehow. If you vote no on the Sin Tax, it doesn't absolve the City of Cleveland of responsibility of keeping the place to code. That money comes out of the general fund if voters decide to no longer support the franchise through taxes and whatnot. The argument of viability of public funds making stadiums was great for the NFL when, in 1999, they signed the contract. All stadium contracts are pretty strongly favoring the NFL as a whole.

 

[Deezus]

You guys point out all the money that is being invested in these sports teams, because those are the hard figures readily avalible. Then you completely ignore the outside money that is being attracted to the city because of these attractions. Why? I have no idea.

Also, you could argue the Browns create jobs, creates tax dollars, provides entertainment etc...

See below:

One promotional study estimated that the local annual economic impact of the Denver Broncos was nearly $120 million; another estimated that the combined annual economic benefit of Cincinnati's Bengals and Reds was $245 million. Such promotional studies overstate the economic impact of a facility because they confuse gross and net economic effects. Most spending inside a stadium is a substitute for other local recreational spending, such as movies and restaurants. Similarly, most tax collections inside a stadium are substitutes: as other entertainment businesses decline, tax collections from them fall.

Promotional studies also fail to take into account differences between sports and other industries in income distribution. Most sports revenue goes to a relatively few players, managers, coaches, and executives who earn extremely high salaries—all well above the earnings of people who work in the industries that are substitutes for sports. Most stadium employees work part time at very low wages and earn a small fraction of team revenues. Thus, substituting spending on sports for other recreational spending concentrates income, reduces the total number of jobs, and replaces full-time jobs with low-wage, part-time jobs.

http://www.brookings.edu/research/articles/1997/06/summer-taxes-noll

 

[Soda]

What's the old adage...?

Professional sports would be the "game" while individual teams in Cities are the "players". Voting "no" on sin tax ain't helping shit.