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PILOTs and Public Policy: Steering through the Economic Ramifications

Author

Listed:
  • Brad R. Humphreys

    (Department of Economics, University of Alberta)

  • Victor Matheson

    (Department of Economics, College of the Holy Cross)

Abstract

A recent IRS ruling has allowed the new Yankees Stadium construction project to be financed by a tax exempt bond offering backed by payments in lieu of taxes (PILOTS). This decision appears to contradict the spirit of the Tax Reform Act of 1986. From an economic standpoint, the question is whether it is desirable to significantly expand the number of projects eligible for tax subsidies in exchange for a more direct connection between those receiving benefits from the projects and those paying the taxes, or should the state and municipal bond tax exemption narrowly extend only to true public works even if this means taxing the populace more broadly when certain segments of the population are more apt to benefit from certain projects.

Suggested Citation

  • Brad R. Humphreys & Victor Matheson, 2008. "PILOTs and Public Policy: Steering through the Economic Ramifications," Working Papers 0832, International Association of Sports Economists;North American Association of Sports Economists.
    • Handle: RePEc:spe:wpaper:0832
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    File URL: http://web.holycross.edu/RePEc/HumphreysMatheson_PILOTS.pdf
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    Keywords

    sports; stadiums; tax subsidies; economic impact;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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