Nassau County is a fiscal basket case, suffering from chronic budget shortfalls, burdensome debt and high taxes. Yet County Executive Ed Mangano wants to take on more debt and raise taxes further to provide handouts to New York Islanders owner Charles Wang.
When they dole out corporate welfare to pro sports team owners, politicians always promise huge economic benefits, which never materialize, while ignoring or playing down costs to taxpayers — or simply wishing them away.
In a referendum on Monday, Nassau voters will decide if they want the county to borrow $400 million to fund a new arena for Wang’s Islanders, along with a minor-league ballpark to house a team from the same league as the Long Island Ducks — who play in a taxpayer-funded park in Suffolk County.
Mangano, a Republican, won the county-exec job by upsetting incumbent Tom Suozzi, a Democrat, in 2009. The year and a half since has seen a steady disappointment of hopes that Mangano would bring a seriousness long lacking on behalf of county taxpayers.
The Nassau Interim Finance Authority, a state authority set up the last time Nassau flirted with bankruptcy, had to take over county finances in January. Ever since, NIFA has regularly challenged and chastised Mangano for his budget plans and projections.
He’s supposed to submit another attempt at a truly balanced budget today; his last effort failed to come close to passing NIFA’s sniff test. For good measure, the county’s sales-tax take came in below expectations for the first half of the year.
Now this arena/ballpark escapade erases any remaining hope for responsible governance.
As is always the case in campaigns for sports subsidies, hired consultants have ginned up “economic benefits” to justify the handout. The “analysis” for Nassau claims the project will be a net plus for county revenues over 30 years — and
projects losses if the Islanders leave after their lease expires in 2015, as Wang threatens.
Some business groups always play along, too. The Long Island Association, the Long Island Restaurant Association and various chambers of commerce are on board the arena/stadium plan, looking for more business.
But this game always plays the taxpayers for suckers. Decades of independent studies have reviewed what’s actually occurred in the building and subsidizing new pro-sports stadiums and arenas: Such projects always fail to make any economic difference to a region — no help on incomes, jobs or overall economic activity.
After all, if there’s no sports team around, people wind up spending their recreational dollars on other activities. And when it comes to replacing an existing arena with a new one, it’s even tougher to honestly claim any kind of economic plus.
For good measure, some studies point to economic harm from subsidizing sports facilities — harm from tax hikes and from politicians guiding where resources go rather than the private sector.
In the end, NIFA’s warning last month on this project is far closer to reality than what Mangano and the Islanders have served up: The plan would boost the county’s total debt by 13 percent to 15 percent — with the total cost to Nassau, including interest payments, hitting $800 million.
Property taxes would have to jump 3.5 percent to 4 percent, while the Islanders would pay no property taxes on the arena and surrounding land.
Indeed, the minimum rent that the team would pay to the county is $14 million a year, far below the estimated $26 million needed for annual debt service.
Finally, NIFA pointed out that accomplishing all that is promised — the arena, the parking lot, the ballpark and other amenities — might well require even more borrowing.
Beyond the referendum, the borrowing for this project would also require a two-thirds vote of the county Legislature and NIFA approval. That’s dicey at best.
But Nassau voters will have the first say on Monday. They should nix the plan overwhelmingly — and so send Mangano a message: Stop the political-payoff games and start working for the taxpayers who elected you.
Raymond J. Keating, a Long Is land-based economist, has written extensively on sports subsidies.