cnerlien

Public Priorities and Tax Dollars

In Issues and Debate on October 25, 2010 at 9:46 pm

My recent blog debate over tax dollars and attendence to a seminar about youth issues has given rise to renewed thinking about how our tax dollars are derived and conversely, how they are spent.

Congressman Keith Ellison reminds me that a nation’s spending of public dollars is often a sign as to where its prioities lie. For this post I will desseminate the funding and justifications for the construction of TCFBank Stadium on the University of Minnesota Twin Cities Campus in Minneapolis. The ultimate cost of the stadium equalled approximately $288.5 million. 52% of this cost came from the University itself, while 48% came from the State of Minnesota to the tune of around $225 million. As retrieved from Minnesota Public Radio, this comes to about $10 million per year (with interest) for the states taxpayers over 25 years to the tune of a rough $1.7 million per game. As students at the U of M well know, a student fee of about $12.50 per semester has also been assessed to help fund TCFBank Stadium. Though much of the University’s costs for the new stadium have indeed been raised via private donations, a significant burden remains upon Minnesota taxpayers and students (who also pay taxes).

This link connects to the stadium’s official website where “you” unsurprisingly can still donate; http://stadium.gophersports.com/about_financing.html  

With every debate over such taxpayer funded projects, TCFBank Stadium proponants look to economics as the method of justifying such expense. These arguments often revolve around notions including lifting local businesses, preserving and/or creating jobs via said project, increasing the revenue base for local and state governments, etc. For the University itself, promotion and prestige are often cited as justifications. The two primary questions that arise out this mode of thinking truly come down to the economic stream and what is the primary function of a major public institution such as the University of Minnesota and does this project help or hinder in fulfilling that function?

The economic stream concerning these projects truly exists in a twofold manner. The first is a question of where would the economic activity surrounding this stadium be if it did not exist and the second is what are we sacrificing via public spending to have this project? The idea that TCFBank Stadium is somehow creating “brand new” revenue streams and “brand new” jobs is fallacious on its face. Without the existence of the stadium, potential patrons would spend money elsewhere, whether it be on bills, everyay items such as groceries, or another form of entertainment, all of which support an economic outcome somewhere (maybe not where policy makers or proponants would prefer) and synonomously would support jobs associated with those dollars where ever they may be spent. Projects such as stadiums don’t “print” currency for consumption or create new jobs where none existed, lest the folks at the Metrodome had nothing to do with running a stadium. Ultimately, such projects and expenditures simply move resources around and propel one industry over another.

The University of Minnesota purports to conform to a “Mission” that contains three principles including: Research and Discovery, Teaching and Learning, and Outreach and Public Service. With this “Mission” in mind, does the building of TCFBank Stadium match the educational as it is laid out? The University of Minnesota, like all similar public institutions, expounds a standard of education as its priority and primary function. The University of Minnesota may forgive my skepticism, but as the tuition rate has doubled in the past decade, and nearly $300 million was collectively spent on a new football stadium, this “Mission,” this priority of education, appears to be the ramblings of policy-makers more interested in prestige, than in Minnesota’s students and workforce.

In the Fall of 2009, the primary revenue scales at the University of Minnesota finally tipped toward the students, as student tuition now shoulders the greatest burden of the University’s overall operating budget. As tuition has double in a decade, student debt has also risen 157% in that time, making the University of Minnesota an institution now built primarily on the debt of its students. One wonders how much of that $225 or so million the state committed to TCFBank Stadium could have alleviated some of this burden at the least. Considering the University’s proposed operating budget for fiscal year 2011 is $1.53 billion, the state’s portion paid for the construction of TCFBank Stadium is equal to 6.8% of that budget . That’s no insignicant number and that puts at least one contributing number to what we and our students have sacrificed to provide a football stadium for our largest public institution. The true cost of this decision among many others, is the educational standards our great state once held and the opportunity to meet those standards by our students.

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