hapter 13 - Municipal Bonds Assignment

Sports stadiums, such as those used by professional NFL teams, are frequently paid for using a combination of private funds (paid for by the teams or other individuals seeking a return on their investment) and public funds (sometimes through the sale of municipal bonds.) As a reference, Investopedia says the following about municipal bonds:

• What is a 'Municipal Bond'?
  • A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures. Municipal bonds are exempt from federal taxes and from most state and local taxes, especially if you live in the state in which the bond is issued. Also known as a "muni."
• Breaking Down 'Municipal Bond'
  • Municipal bonds may be used to fund expenditures such as the construction of highways, bridges or schools. "Munis" are bought for their favorable tax implications, and are popular with people in high income tax brackets.

In this assignment, you'll conduct research and then formulate an opinion on the question of: Should municipal bonds be used to fund sports stadiums?

INSTRUCTIONS

Part 1 - Become Familiar With the Arguments

Here are a few resources that you can use to learn more about why some people feel that stadiums should NOT be funded using municipal bonds. You may not need or want to review all of them. Some articles are quite lengthy or detailed, so I've highlighted some areas for review:

• General overview
  • A Chance to Get Sports Teams Out of Taxpayers' Wallets (Governing.com)
  • Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them? (Reason.com)
• Tax implications
  • When Cities Pay for Stadiums, Everyone Shares Costs (The Daily Caller)
• Time scale of bonds vs. usefulness of stadium
  • Rethinking the Game Plan for Stadium Bonds (Governing.com)
• Economic impact on local communities
  • Use of Taxpayer Money for Pro-Sports Arenas Draws Fresh Scrutiny (Wall Street Journal)
    • Begin at paragraph 8, "Whatever the result in Washington..."
  • If You Build It, They Might Not Come: The Risky Economics of Sports Stadiums (The Atlantic)
    • Begin at section titled "PUBLIC MONEY BALL"
  • Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost? (Brookings)
    • Begin at section titled "Why Cities Subsidize Sports"
  • Should Cities Pay for Sports Facilities (Federal Reserve Bank of St. Louis)
    • Begin at section titled "And the Dollars Keep Turning Over"
  • Local Economists: Yes, We Should Build a Stadium. No, It Doesn't Make Economic Sense. (Voice of San Diego)

Part 2 - Summary and Your Position

1. After reading some or all of the resources above, provide a brief summary of at least 3 reasons AGAINST cities using municipal bonds to fund stadiums.
2. Despite the type of criticisms outlined in the referenced resources, many cities continue to fund new stadiums using municipal bonds. Formulate a list of at least 2 arguments that support public financing of sports stadiums. It may be beneficial to find additional resources that support your arguments.
3. After completing #1 and #2, decide on which side of the fence you fall -
   1. Do you support the use of municipal bonds to fund sports stadiums - OR-
   2. Are you opposed to the use of municipal bonds to fund sports stadiums?
4. Why? Support your decision.

Prepare a one to two page report with your answers to all of the above. Your Word document should be double spaced and the preferred font is Times New Roman, 12 point. You should use in-text citations and include a reference page for all sources used (even those from the list provided in Part 1). The reference page does not count toward the required minimum length requirement.

Please thoroughly proofread your document before submitting it. Deductions will be taken for spelling, sentence structure, and grammar issues.