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Obama should drop proposal to ban tax-exempt financing for new stadiums

The provision tucked into President Obama’s fiscal 2016 budget proposal that would bar the use of tax-exempt bond financing for new stadium projects should be taken out.

Letting it live on would hamper Western New York’s effort to build a new stadium for the Bills. Republicans who control Congress likely have their own potential stadium projects that might be harmed by the provision, which explains their aversion to the idea.

It is impractical to think that local taxpayers would, or even could, shoulder the entire cost of a new stadium. Erie County Executive Mark C. Poloncarz and Gov. Andrew M. Cuomo have made clear their reluctance to devote more money into a new facility.

Yet there is evidence that new, modern stadiums with amenities and high-priced suites serve more than one purpose; they become year-round destinations, unlike an older, single-purpose stadium that sits idle most of the year.

Getting back to the president’s provision … he must somehow believe it shows the type of fiscal restraint to be applauded when, in fact, it is a mere drop in the budget’s $4 trillion bucket, as reported in a story by News Washington Bureau Chief Jerry Zremski. The tax exemption amounts to a cost to the federal government of $146 million, according to a 2012 Bloomberg analysis.

The Obama administration makes the argument that tax-exempt bond financing should be for the public good and not for private-sector owners of professional sports teams. We agree. Except that there is a public benefit from such financing.

The local federal delegation makes the point in a bipartisan way. Sen. Charles E. Schumer, who has been at the forefront of the effort to keep the Bills here, expressed concern that the provision would limit the options of the City of Buffalo and Erie County in building a new stadium, therefore possibly jeopardizing the Bills’ future in Western New York.

Reps. Chris Collins, R-Clarence, and Brian Higgins, D-Buffalo, oppose the budget provision because it would raise the cost of a new stadium, increasing the burden on local taxpayers.

Even Rep. Tom Reed, R-Corning, a member of the tax-writing Ways and Means Committee, objected to the president’s proposal, pointing out that new sports venues provide revenue for local governments.

This tiny provision in the president’s spending proposal unnecessarily ties the hands of local governments trying to upgrade sports facilities as cost-effectively as possible.

It should be quietly forgotten.