For Sale: Harrisburg Senators (No, Not Those Senators)

OCTOBER 1, 2006 | Commentary by GRANT GULIBON

In Pennsylvania and across the United States, taxpayers don't need to look very hard to find examples of wasteful, unconstitutional, or just plain wrongheaded government spending decisions.  One of the most prominent such examples has been the willingness of elected officials to give in to professional sports team owners' demands for new, taxpayer-financed stadiums and arenas.

In Pennsylvania, owners' lobbying of state and local officials-punctuated with the veiled threat that they might move their franchises if taxpayer subsidies were not forthcoming-bought new, primarily taxpayer-funded baseball and football stadiums in both Pittsburgh and Philadelphia. One Pennsylvania community, however, wasn't content to merely subsidize its hometown team via a new or refurbished stadium.

In 1995, the City of Harrisburg was threatened with the loss of its minor league baseball team, the AA Senators.  The Senators had been purchased for $4.1 million, and the new owners intended to move the franchise to a new, taxpayer-financed facility in Springfield, Massachusetts.  In response, Harrisburg Mayor Stephen Reed took the extraordinary step of having the city buy the team for $6.7 million in order to prevent the move.

At the time of Harrisburg's entry into the baseball business, the mayor acknowledged that buying and running a professional baseball team was unusual for a city government.  Indeed, most elected officials recognize that owning or operating private entertainment businesses, such as baseball teams, is not the proper role of government.  Reed did it anyway.

For their part, supporters of the city's purchase of the Senators claim that the team has had a positive effect on the Harrisburg area during the past decade. But with regard to the franchise's economic impact, if the experiences of other communities are any guide, the reality is likely much different.  Studies of professional sports teams and stadiums have consistently found that the employment and income growth attributable to such franchises and facilities has been minimal at best.

Furthermore, government ownership of the Senators has probably put many other privately owned and operated businesses in the surrounding region at a disadvantage.  Fans attending a baseball game in Harrisburg are spending money that they would have otherwise spent at another entertainment establishment, such as a movie theater, bowling alley, or amusement park-venues that are rarely, if ever, taxpayer subsidized.  In other words, any direct or indirect "profit" for the city from the Senators is offset by losses elsewhere.

While the city has been pleased with owning the Senators, Harrisburg's overall fiscal condition has gradually deteriorated at the same time, reaching the point of crisis this fall.  In late October, facing an estimated $14 million deficit that has already necessitated the layoffs of a number of city managers, police cadets and other employees, Mayor Reed announced that he is reluctantly putting the Senators up for sale-with the condition that the team remain in Harrisburg.  Published reports indicate that at least three potential owners are interested in purchasing the team, but it has also been speculated that the mayor's insistence that the franchise stay in Harrisburg will limit the price the city could receive for the Senators.

Ironically, while selling the Senators-along with two city-owned islands in the Susquehanna River and approximately $7 million in artifacts purchased by Mayor Reed for a planned "Wild West" museum-is fiscally prudent, doing so may not have much positive effect on Harrisburg's current precarious financial condition.  A sale of the Senators could probably not be completed before the end of 2006, and the mayor has stated that any proceeds from a sale should be first used to pay off the bonds used to buy the team.  And if minor league baseball remains in Harrisburg, state and city taxpayers will almost certainly be forced to eventually shoulder the costs of upgrading the Senators' current home field, Commerce Bank Park.

To be sure, buying the Senators was not the sole-or even the largest-reason for Harrisburg's current fiscal calamity.  Nevertheless, city government's willingness to expand its scope beyond its core responsibilities of safeguarding citizens' lives, liberty, and property is a disturbing pattern that contributed to the dire circumstances its leaders must now confront.  If a minor league baseball franchise is to remain in Harrisburg, it should do so because it can compete as a privately owned entity-as virtually all of its counterparts across the United States must do-rather than as a government-owned enterprise.

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Grant R. Gulibon is a Research Fellow with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, non-profit public policy research and educational institute located in Harrisburg, PA.



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