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Lawmakers seek to end lucrative tax breaks for pro stadium construction

Rep. Jackie Speier (D-Calif.), shown here at a September 2020 news conference, introduced a bill Tuesday, along with Rep. Earl Blumenauer (D-Ore.) and Rep. Don Beyer (D-Va.), that seeks to eliminate a lucrative tax break for sports teams building new stadiums. “There is no justification for these multibillion-dollar franchises to be eligible for tax-exempt municipal bonds,” Speier said. (Alex Brandon/AP)
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Allegations of widespread sexual harassment in the Washington Commanders workplace and dissatisfaction with the NFL’s response have revived congressional interest in eliminating a lucrative tax break that professional sports teams routinely use to help fund new stadiums.

On Tuesday, Reps. Earl Blumenauer (D-Ore.), Jackie Speier (D-Calif.) and Don Beyer (D-Va.) reintroduced a bill they co-authored, titled the “No Tax Subsidies for Stadiums Act,” that would do just that, effective immediately upon enactment.

The goal, Speier explained during a phone interview, is to end an unjustified subsidy that she says doesn’t serve the interests of American taxpayers. In doing so, she said, the legislation would also send a signal to the NFL and Commanders owner Daniel Snyder that Congress will not tolerate sexual harassment in their high-profile workplace nor stand idly by as serious allegations are swept under the rug.

“There is no justification for these multibillion-dollar franchises to be eligible for tax-exempt municipal bonds,” Speier said. “This is tax dollars that could be used for any number of really important public-interest programs. Over the course of 20 years, it [represents a loss of] $4 billion — and probably much more.”

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Speier is a member of the House Committee on Oversight and Reform, which since October has been investigating the NFL’s handling of allegations of pervasive sexual harassment and misconduct in the Commanders’ offices.

“The Washington Commanders have shown over and over again their unwillingness to play by the rules,” Speier said. “Even when [NFL Commissioner Roger] Goodell was forced to do an independent investigation of all these complaints of … sexual harassment at the Washington team, [the league and the team] had a sidebar agreement that basically provided that they were just doing this for show. Well, this is not for show; this is for real.”

Speier was referring to a “common interest agreement” signed by the NFL and Commanders in September 2020, when the NFL took over a team-initiated investigation of workplace harassment after allegations surfaced against Snyder. In that confidential document, the league and team agreed to pursue a “joint legal strategy” on any litigation that resulted from the probe. They also agreed that neither could release information about the investigation without the other’s consent.

Beyer, who whose district includes Alexandria, Falls Church and Arlington, said in a statement: “Super-rich sports team owners like Dan Snyder do not need federal support to build their stadiums, and taxpayers should not be forced to fund them. Billionaire owners who need cash can borrow from the market like any other business. Arguments that stadiums boost job creation have been repeatedly discredited. In a time when there is a debate over whether the country can ‘afford’ investments in health care, child care, education, or fighting climate change, it is ridiculous to even contemplate such a radical misuse of publicly subsidized bonds.”

Blumenauer, who, like Beyer, is not a member of the Oversight Committee, originally introduced the bill to repeal the tax break for pro stadium construction during the 2019 congressional session.

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A March 2020 study published in the National Tax Journal estimated that the federal government had lost $4.3 billion in revenue as a result of tax-exempt municipal bonds used for stadium construction since 2000.

Co-authors Austin J. Drukker of the University of Arizona and Ted Gayer and Alexander K. Gold of the Brookings Institution based the study on a review of 57 stadiums built since 2000, of which 43 were funded, at least in part, by federal tax revenue in the form of tax-exempt municipal bonds.

The rationale behind the long-standing tax break is that pro sports arenas serve the public interest rather than the profit motive of private business owners.

In Speier’s view, that is flawed.

“We’re saying to the American taxpayer, ‘We’re going to be good stewards of your taxes and make sure that they’re being spent on important public interest programs,’ ” Speier said.

The NFL declined to comment.

The bill does not apply retroactively to tax-free municipal bonds that have already been issued for construction or major renovation projects. Rather, it would apply to new bonds going forward for stadium projects in all pro sports, including Major League Baseball, the NBA and NHL. The fact that Snyder hopes to build a new stadium for the Commanders in the next few years is not lost on Speier.

The House Oversight Committee launched its inquiry of the NFL’s handling of allegations against Snyder and the Commanders in the fall, dissatisfied with the league’s refusal to make public the findings of attorney Beth Wilkinson’s 10-month investigation, which included interviews with more than 120 people and a review of more than 650,000 documents.

After requesting the NFL turn over Wilkinson’s findings and all supporting documents by Nov. 4, the panel’s patience is wearing thin. The league has partially complied with the request but withheld several key documents, citing legal privilege in some cases and blaming Snyder’s lack of cooperation in others.

On Feb. 3, the committee held a publicly streamed, two-hour roundtable with six former employees that yielded new allegations against Snyder and, in turn, spurred the NFL to launch a new investigation of the owner’s behavior. Snyder has denied the claims.

After the NFL partially met a deadline extension for turning over documents, the committee on Feb. 15 stated that it would take “further action” if the league didn’t fully comply.

Among the options Congress has: taking sworn depositions of NFL officials, convening public hearings and issuing subpoenas for documents not willingly produced.

While the bill introduced Tuesday isn’t a direct result of the committee’s work, it is another example of the leverage Congress has over the NFL in pursuing what it deems a matter of public interest.

“It’s the dawning of a new century in terms of how women should be treated in the workplace — and men as well,” Speier said.

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