There should be no football tax on health care

The proposal to bring a professional football team and stadium to Halifax raises many questions.

Since the proponents of the stadium want the Province to contribute money and concessions on ownership of former federal lands, it’s fair for people outside HRM to be concerned and need clarification.

One of the proposed revenue sources is a two-to-four percent levy on hotel bills.

I wonder about the impact of this entertainment tax/levy on health care. HRM is the region’s medical centre with the greatest concentration of medical specialists.

So, like medical pilgrims, people come to Halifax for appointments, tests, treatments and surgeries. They bring their sick kids to the IWK. The bulk of these people travel with a family member or friend, who often need a place to stay. Every day hundreds of hotel, inn, lodge and B&B rooms in HRM are occupied by people who are here for medical purposes. A levy on their accommodations is a type of tax on health care.

While $4-$8 a night may not seem much to some, to families whose main income earner is ill or who have to take time off work, this adds up. In the U.S. this type of surcharge is called “drip pricing” and is getting push-back from the corporate community as well as being the subject of lawsuits in Nebraska and Washington, DC.

When thinking about this I discovered a similar hotel levy had been proposed to pay for sporting infrastructure in Glendale, Arizona. Glendale is a city of 230,000 a few miles outside of Phoenix. A federal judge rejected the levy on constitutional grounds.

We are a different legal system, but it is worth studying the Glendale experience since one of their former team owners is also a backer of the Halifax stadium proposal. The proposal for Halifax seems to mirror the deal the owners of the Phoenix Coyotes had with the city for managing the Gila River Arena. This link provides details of a similar-sounding proposal:

The Super Bowl Comes To Glendale, The City Ruined By Sports

I understand a passion for sports, but in Canada and Nova Scotia we have expensive sporting history to consider. An example is the exuberant former Montreal Mayor, Jean Drapeau, who famously said, “The Olympics can no more run a deficit than a man can have a baby.” Well, Montreal’s 1976 Olympics were so costly – 13 times over budget – that it took the city 40 years to pay off the Games’ debt.

In 2008, Glendale invested $14 million to host The Super Bowl. They lost $1.6 million.

More recently and more local was Halifax’s winning bid to host the 2014 Commonwealth Games. The public was told the games would cost $785 million, generate $2.4 billion in economic benefit, increase the province’s annual GDP, create 18,000 jobs and leave a legacy of “world-class sport facilities and programs”. Proponents said, “We are not going to see the kinds of overruns that other games have seen.”

But investigative reporting later learned that the real budget for the Games was $1.72 billion and would be closer to $2 billion. A consultant hired by the organizing committee criticized the organizational structure, business plan, proposed ticket prices, budget projections and said the positive assumptions – like higher attendance and ticket prices – were based on a “we are different” concept.

If Halifax is to host a professional sports team and stadium, perhaps we should look at the model provided by Green Bay, Wisconsin. Green Bay is a city of 109,000 people so it is smaller than HRM, yet is home to the Green Bay Packers, the winningest and most successful football franchise in the NFL. The Packers have no public money involved in the team or stadium, nor do they have a single owner. For lack of a better description, they’re sort of a cooperative.

The Packers are a community-owned team. They sell shares to the public and have 360,000 shareholders. Their last share offering in 2011 raised $67.4 million. In 2003 the Packers’ home, Lambeau Field, underwent a $295-million redevelopment that increased capacity to 80,000. The Packers’ organization paid for that.

It’s out-of-the-box thinking to raise money for professional sports by selling shares to fans and supporters, but it doesn’t divide the community and doesn’t put an extra burden on those who have to travel for health care.

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3 Responses to There should be no football tax on health care

  1. buddyboy546 says:

    What a well researched and well presented posting. Thanks for taking the time and trouble to do it. I suspect researching it all out took a fair bit of effort. Let’s just hope it opens up some insightful thinking in enough people to make a difference. In particular, you have not just criticized the proposal, you have offered a viable alternative (fans buying shares) which makes better sense. Well done.

  2. Bubbie says:

    Great piece, well done!

    I have been an opponent of the stadium ever since Mayor Savage took it upon himself from the first day he was elected to seek out CFL officials to bring a CFL team to Halifax. He has been working behind the scenes for the past several years with Anthony Leblanc and the SSE organization to work out a deal. It just so happens that one of the five proposal by Anthony Leblanc of $22M roughly matched the $20M held in a fund for special projects for which a stadium was included. I find it equally interesting that our CAO for Halifax, Jacque Dube is the same CAO who served Moncton Municipality and is responsible for Moncton getting a $100M hockey arena. Mayor Savage sought him out after our former CAO Richard Butts who was also brought in, by Savage to bring a CFL team to Halifax,

    I have been watching the debate rage on since the stadium’s inception with politicians saying one thing and meaning another. It has been, only, Halifax Councillor Sam Austin who has been truly out front in objecting to go any further with talk of a stadium citing the expense it will be along with the litany of projects already on HRM Council’s plate requiring nearly $100M like roundabouts, four pads, cycling lanes, Spring Garden Road makeover and a spanking new library.

    We need more people like Mr. Austin who has a conscience as to how taxpayer money is spent. Meanwhile, Byrony House for abused women, needs to find another $2 million to replace a dilapidated century-old building they have been housed in. I find it equally disturbing that Halifax Council can pluck $20M out of thin air for a stadium but they have to create a fund to SAVE money for affordable housing and to date only $1M has been acquired from a developer in order to get his 30 story tower built at the corner of Robie and Quinpool Road. Halifax, which has been mostly in the black, is now incurring a city debt of $22M that will continue to grow with ever increasing “wants” and not “needs”

    As I researched the viability of stadiums I came across a book, appropriately titled, The Field of Schemes, specifically outlining how stadiums become albatrosses around the necks of taxpayers where they have to burden the expense of building a stadium well beyond the functional lifetimes of the stadiums, filling the already rich pockets of team owners. I have also listened to many professors of economics in media interviews state stadiums do not generate the economic wealth and spinoffs suggested by proponents lobbying for a stadium in Halifax. As a matter of fact the economic impact of a stadium has been stated to be at best, the same as a small shopping mall. Lastly, PBS News Hour in the US did a report on public money for stadiums that show the negative side for taxpayers.

    Revenue from taxes like TIFF, as mentioned by Anthony Leblanc, are in this report and tells how taxpayers continue to pay these taxes for years after a team has left a city. Another economic expert has noted sport teams are not allowed to be a Stock Market commodity.

    Watching Anthony Leblanc in a recent interview with CTV’s Steve Murphy illustrated to me, the plan is going as expected for Mr. Leblanc. He got the first down with the Municipality, next down is with the Provincial Government. Even though the Premier has come out stating he does not want to see taxpayer money go to support a CFL stadium, he is willing to listen, much the same way HRM Council has done, which as we all know resulted in the funding of the expected $20M on the Municipal level and now Mr. Leblanc is looking toward another $80M on the provincial level. It is not hard to suspect that a decision to provincially provide taxpayer support for the stadium has already been made.

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