Thursday, November 17, 2005

Fee For Me And Fee For You

The DC Fiscal Policy Institute has an economic analysis of the stadium financing plan, specifically the ballpark fee being charged to businesses to pay for the stadium. Recently, it has been proposed that the proceeds from the private financing plan that the city is working out with Deutsche Bank be used to reduce the ballpark fee. Their analysis concludes that that plan ends up shifting the costs of the park from the businesses to the little guy, at a cost of $60 million.

I'm not sure I agree with them, but it's an interesting, if not confusing argument. Lemme try and bastardize it for you.

--The stadium is going to cost the same regardless of the private financing.

--They claim that the city will collect $44 million in annual payments, but that repayment will only cost $34 million.

--If that extra money is used to pay down the bonds at a faster rate, instead of being rebated to businesses, it would only take 19 years to pay off the 30-year bonds.

--If they rebate the money to the businesses, it would take 25 years to pay off the bonds, and $60 million of that (in net present dollars) would have to come from sources other than the businesses.

--Left unsaid is that women and children (oh, and minorities) would be hardest hit.

It's an interesting non-demagogic take. Just throwin' it out there....

I've argued before that private financing doesn't actually DO anything. This sort of proves that point.

1 Comments:

  • From the study:

    This, in turn, would require an increased reliance on other District revenue sources that otherwise could go to fund basic services, such as education, health care, and public safety

    If we were to take this quote out of context, we could have a field day of mockery! ;-)

    By Blogger Basil, at 11/17/2005 5:29 PM  

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