North Carolina remains in dire economic times. Unemployment is hiding at 9.4 percent, one of the worst in the nation. Tax revenues are down, revaluations are down (especially along the coast), and one-time stimulus funds from the federal government are gone.
Rather than gravitate toward more fiscally sound decisions, as cities and counties crafted their annual budgets, some local governments have started becoming more desperate — considering projects on their wish list rather than their need list.
Niagara Falls, N.Y., is an obvious example. Seeing population and economic fortunes in steep decline, the city pulled an economic development publicity stunt, allowing a Wallenda to cross Niagara Falls on a tightrope, a feat not performed in more than 100 years. The spectacle was broadcast nationwide, but it won’t solve the city’s fiscal woes in spite of the success of the event.
In contrast, Charlotte recently agreed to import one of the worst-performing baseball teams in the AAA International League from Fort Mill, S.C. A taxpayer-funded stadium plan relies on $8 million from the city ($725,000 from private boosters, the rest from taxes). Mecklenburg County taxpayers will chip in another $8 million. The stadium is supposed to cost upwards of $54 million.
Republican City Councilman Andy Dulin rationalized the plan by saying property taxes weren’t used. Democrats cast the four votes against it. The key question, often ignored, is whether government should be doing this. It’s a need, not a want.
Wilmington, whose regional unemployment is higher than the state’s, passed a 20 percent increase in its property tax rate this year. The room occupancy tax is committed to a convention center that is projected to lose money. And over the past year, the city has been courted heavily by the Atlanta Braves/Mandalay Management to build a new $37 million — $42 million stadium to house a single A baseball team being moved from Lynchburg, Va.
During the spring, the council was eager to get private money involved and a Flywheel/Trask development team was formed for that purpose. But the deal was a terrible one. The group offered to build the stadium and pay property taxes on it if the city would front 70 percent of the estimated cost.
Flywheel/Trask eventually withdrew. The city kept moving forward after spending more than $160,000 on a consultant, National Sports Services. The consultant showed the city how a stadium could be built using $17 million from the city, $8.2 million from “additional government” funding, $400,000 in property taxes, and millions in private sector money. They city would be obligated to provide $17 million of the stadium’s $42 million cost.
The deal became something of a laughingstock. The county said that it would not provide anything, let alone $8.2 million. A city-owned stadium would generate no property taxes. To date, no other group has offered to make up the remaining money. Even worse, the $42 million does not include interest, which could raise the overall cost to $100 million over 20 years — for a stadium that would seat 3,552.
The council didn’t flinch, and obligated an additional $310,000 in property taxes to study the issue further.
Baseball stadiums are amenities, not needs.
By contrast, Sandy Springs, Ga., has focused on privatizing virtually all aspects of city government save for the city manager and the police and fire departments. Quality of life is up, unemployment is down, and the city cut $7 million from its budget this year because officials are focusing on what they should be doing, not what they could be doing.
Chad Adams is the host of “Mornings with Chad Adams” on the BigTalker FM, a former vice president of the John Locke Foundation, and a former Lee County commissioner.