Much of the public debate about a potential new stadium for the Atlanta Falcons has focused on the wrong question.
The issue is not whether the Falcons, their fans and — above all — owner Arthur Blank would benefit from having a new stadium built with an expected $400 million in tax money. The issue is whether building a replacement for, or complement to, the Georgia Dome is the best use of those millions.
As an economist would say, is it worth the “opportunity cost”? That would be the next-best choice among all possible things the money could buy.
And we could buy a lot of things for $400 million — the state’s expected portion of the $700 million project. Put another way, we’re talking roughly $19 million a year. Based on recent years, that’s the portion of annual hotel/motel tax revenues in Atlanta that would be dedicated to the new stadium.
Hotel tax revenue is sometimes considered “free money” because it comes from visitors. That’s why it’s better to think in terms of what we give up by using it a certain way.
For example, it could go to cutting property taxes. Atlanta takes in $18 million to $20 million in general funds (see page 4o of this PDF) for each mill of property taxes. (A mill equals a dollar of tax for every $1,000 of a home’s assessed value.)
If the city were to lower property taxes by one mill and replace the revenue with hotel taxes, the owner of a $250,000 home would save $250 a year. (Hey, that’s about what it costs to take a family of four to a Falcons game!)
On the other hand, we could continue to spend the money, just not on a new stadium. The list of potential projects is long. Here are some possibilities, not all of which I’m endorsing simply by including them here.
For $400 million, we could build the entire 44-mile network of high-occupancy toll (HOT) lanes planned to help ease congestion in the region. Or we could make a number of improvements to freeway interchanges choked by traffic.
For those more interested in public transportation, the city could complete about a third of the BeltLine’s 22-mile transit loop. Alternatively, it could more than cover the first phase of the proposed streetcar route along the Peachtree corridor (a project I’d personally put at the bottom of the list).
Or the city could do the opposite of what governments tend to do and reduce the burden on future taxpayers.
With $400 million, the city could erase more than a quarter of its $1.5 billion pension funds deficit. Or it could pay for a big chunk of its continuing, $4 billion water and sewer infrastructure repairs. Those costs are inescapable. Why pass them on to unborn Atlantans when visitors could help us pay them down now?
Just to get a full grasp of what $400 million will buy, let’s look outside the city limits. For that money, we could pay the rest of the cost of deepening the Savannah port, which would benefit the entire state. It would also fund a large part of an outer perimeter or new north-south expressway allowing cargo trucks to bypass Atlanta.
Or we could hedge our bets in the water wars by building new reservoirs to fulfill our water needs in the event we lose access to Lake Lanier.
These alternative uses of the hotel tax revenues would require new state legislation. But surely Republican legislative leaders, good small-government conservatives that they claim to be, would rather use this money to lower other taxes or to build more pressing infrastructure than a spare football stadium. Right?
And even if you believe money raised from out-of-towners should be used to attract more visitors, the Georgia World Congress Center and Atlanta Convention and Visitors Bureau would still get almost a third of Atlanta’s hotel tax revenues.
Given the other possibilities, I’m not sure why we’re seriously debating a new stadium.
– By Kyle Wingfield
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