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Cato Daily Dispatch for July 28, 2003

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Tax Breaks for New Stadiums Cost Treasury $100 Million a Year
Prison Population Continued Growth in 2002
Two Senators Want Global Warming Limits Included in Energy Bill

Tax Breaks for New Stadiums Cost Treasury $100 Million a Year

"The recent wave of sports stadium and arena construction is costing the U.S. Treasury more than $100 million annually because the projects have been financed with tax-exempt bonds, a federally supported method of borrowing money more often used to build roads, schools and other public projects," according to The Washington Post.

"The federal tax break for professional sports venues is rarely recognized in the fractious stadium debates across the country."

In an article for the Winter 2003 issue of Regulation magazine, Michael F. Gorman and Ike Brannon, respectively, a professor at the University of Dayton and a senior economist for the Joint Economic Committee, assert that teams could give taxpayers a break by using "personal seat licenses (PSLs) - that is, the rights for fans to buy tickets for certain seats -- at a price that reflected market demand, rather than for the pittance that the team actually charged.

"A major league sports team creates few new jobs in a city; the vaunted `multiplier effect' that says $1 spent on a sports arena circulates in an economy to create $8 or $9 in new spending is little more than sophistry. . . . The beauty of personal seat licenses is that it magnifies the futility of such government spending; with this alternative revenue source, government stadium subsidies become nothing more than transfers from taxpayers to team owners and season ticket holders."

Prison Population Continued Growth in 2002

"America's prison population grew again in 2002 despite a declining crime rate, costing the federal government and states an estimated $40 billion a year at a time of rampant budget shortfalls," reports the Associated Press.

"The inmate population in 2002 of more than 2.1 million represented a 2.6 percent increase over 2001, according to a report released yesterday by the Bureau of Justice Statistics. Preliminary FBI statistics showed a 0.2 percent drop in overall crime during the same span."

Three years ago, when the prison population first broke the two million mark, Timothy Lynch, director of Cato's Project on Criminal Justice, wrote in "Population Bomb Behind Bars": "No one can dispute that prison cells incapacitate convicts. A serial rapist, for example, cannot prey upon his old neighborhood while he is behind barbed wire fences. On the other hand, there is no corresponding increase in public safety when government incarcerates a person for using or even selling drugs. Years of experience show that drugs are not rendered less available by locking up drug offenders."

Two Senators Want Global Warming Limits Included in Energy Bill

"Senators John McCain and Joseph I. Lieberman are planning to compel a vote on an effort to control global warming when the Senate takes up an energy bill this week," according to The New York Times.

"While the two senators concede that their amendment to the energy bill is likely to fail, they said they thought the debate would help generate political pressure on an issue that had prompted volumes of political discussion but little federal legislative action."

Patrick Michaels, senior fellow in environmental studies and co-author of "The Satanic Gases", writes in "Drought-Inspired Climate Panic" that statistics show that the Earth is becoming neither hotter nor drier. "U.S. surface temperatures have risen a mere 0.4ºC in the last 100 years. Are we getting drier? The answer is no. U.S. precipitation has increased about 10 percent over the 20th century, an increase of around 3 inches in the last 100 years."

Jonathan Block, editor, jblock@cato.org