Hockey Arenas Do Not Revitalize Cities

After faltering on there no new taxes pledge Senate Republicans are entertaining a proposal that would allow Allentown to borrow state funds in order to build a new minor league hockey arena. But corporate welfare projects like this one are the reason we have a budget shortfall in the first place.

The Morning Call reports, “budget talks include an arena financing plan that could use a taxing district and an amusement tax that one source says would cover most of the cost of building the arena along the Lehigh River in Allentown.” Senator Browne said, “it’s possible the long-overdue $27.9 billion state budget will hold the answer to how cash-poor Allentown can afford a complex Mayor Ed Pawlowski hopes will help revitalize the city”.

If Allentown can’t afford to build an arena for a minor league hockey team then they shouldn’t do it! And if this is such a good investment, why doesn’t a private firm fund the project and take on the risk instead of the taxpayers? Some may try to justify the deal if it relies on taxes that only affect users of the stadium through an amusement tax, and a Tax Incremental Financing District that would funnel all new state tax revenues created by the arena. But this still leaves taxpayers on the hook if the venture flops.

Countless examples and a study by sports economists demonstrate that subsidizing sports stadiums lines the pockets of a few and fails to revitalize downtown areas.

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