Friday, October 24, 2008

Brodsky: "no commensurate public value" in subsidies for sports facilities

Adding to his criticism of the Yankee Stadium deal and of subsidies for sports facilities, Assemblyman Richard Brodsky has released his testimony for today's hearing, Gaming the Tax Code: the New York Yankees and the City of New York Respond to Questions About the New Yankee Stadium, held by the Domestic Policy Subcommittee of the House Committee on Oversight and Government Reform. (It will be webcast at 10 a.m.)

Rep. Dennis Kucinich (D-OH), chairman of the committee, has been a fierce critic of the use of tax-exempt bonds for sports facilities, and Brodsky has emerged as well. There should be some pointed exchanges between the two and representatives of the city and the Yankees.

On the Yankee Stadium assessment

Brodksy states:
We are convinced that there is overwhelming, rigorous evidence that the assessment of Yankee Stadium was artificially and illegally inflated. We are pursuing a number of additional related matters. Suffice it to say that if they are capable of manipulating assessments for sports facilities, they are capable of doing so for hotels, or retail projects, or other favored beneficiaries. Approximately 18 assessors were indicted by the Manhattan District Attorney and convicted of manipulating assessments, largely for the benefit of relatively small property owners, and have been severely punished, as the law requires. The question of whether similar behavior is also of interest to the IRS is a matter for the IRS and the relevant Committees of the Congress. But the evidence is there for any fair-minded person to see.

On the use of subsidies

Brodsky concludes:
Finally, I return to the fundamental question of the use of federal, state, and local resources to subsidize sports facilities. We again conclude that there is no commensurate public value, that these are giveaways not investments, and that the Federal Government should cease its subsidies of any project where the public subsidy is not met with a public benefit of at least equal value. As a nation we have chosen to bail out huge financial institutions, but leave individual homeowners to suffer consequences with little government help. We socialize risk for the wealthy, and privatize profits. New York itself has much to answer for with respect to these deals. Our statutes are inadequate, even those that were violated. We have embraced the giveaway philosophy in the name of “economic development.”

But we are beginning to correct those failures. We ask only that the federal government cease to incentivize these wrong-headed decisions, not only in the area of sports facilities, but with respect to the genteel blackmail that has us offering billions to private interests across the country to protect our state’s economic interests. We are as a nation, broke and embarrassed about our economic failures. Surely the first step towards recovery is prioritizing our expenditures. In a city that can’t fund its mass transit system, or its schools, please assist us first by ending the gilded-age practice of providing billions of dollars of public subsidy to wealthy private corporations whose influence or political popularity is rewarded with tax free bonds and cash gifts.

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