Pro Sports Subsidies From State Taxes Continue While Services Get Squeezed
August 30, 2010

Add Florida taxpayers to the list of those subsidizing profitable major league baseball franchises in Miami and St. Petersburg, even if most Floridians don’t realize it.

Financial documents leaked this week show that both the Florida Marlins and the Tampa Bay Rays turned profits in recent years even as they insisted that local taxpayers finance new stadiums.  (Read news stories about their profitability here and here.)

In the Marlins’ case, the cost to local taxpayers for “a sweetheart stadium deal” will be $2 billion or more to repay bonds over 40 years.  The Rays also say they need a new stadium financed in part by local taxpayer subsidies.  Both teams let it be known that they might move to another city if new stadium arrangements weren’t satisfactory.

Meanwhile, thanks to a Florida law enacted in 1991 to subsidize a "new or retained professional sports franchise," the Marlins, Rays, and six other professional sports franchises each receive a check from the state every month for $166,667.  That’s $2 million a year for each team, for 30 years.

Together with $5 million in subsidies for major league teams based in Florida for spring training, these subsidies from state money cost $21 million each year, straight from collections from the sales tax.  In addition, Florida provides a $2 million annual subsidy to the Professional Golf Hall of Fame and $1 million annually to the International Game Fish Association World Center. 

The Marlins, Rays, and other baseball, football, basketball and hockey teams subsidized by Florida taxpayers are each worth hundreds of millions of dollars, according to annual sports franchise valuations by forbes.com: 

Florida Marlins                                  $317 million

Tampa Bay Rays                              $316 million

Jacksonville Jaguars                         $725 million

Tampa Bay Lightning                        $191 million

Florida Panthers                               $159 million

Tampa Bay Buccaneers                    $1 billion

Miami Heat                                       $364 million

Orlando Magic                                  $361 million

In just the last five tough budget years, Florida’s taxpayers will have subsidized these profitable pro sports teams with more than $100 million.  This money leaves the state treasury month by month and is not available to fund priorities like education, health care and health insurance, and other services needed by those caught in the economic downturn.

Subsidies for professional sports teams fall under the guise of “economic development,” where tax revenues are handed out with the rationale that they will create jobs and other positive economic outcomes.  The $21 million annual subsidy to sports teams is one of hundreds of tax breaks in Florida law, costing billions each year, which are seldom if ever reviewed.

Supporters maintain that the state can’t change the 1991 law to eliminate the subsidies because the money supports bonds sold to finance pro sports stadiums.  Other money could be substituted, however, if legislators decided that the Florida had more important priorities.

Many tax breaks merely provide government subsidies to profitable businesses or provide money to employers who would have hired new workers anyway.  (See “Tax Breaks Shift Money to a Few Winners and Compete for Limited State Revenue.”) 

Sport subsidies are opposed by most economists.  “There appears to be little or no evidence for any net beneficial economic impact of public stadium financing,” concluded an economist’s study for the James Madison Institute in Tallahassee.

An examination of a multitude of national studies on tax breaks for sports teams reached the same conclusion.  “Sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation.”

“The fact that sports subsidies continue to be granted, despite the overwhelming preponderance of evidence that no tangible economic benefits are generated by these heavily subsidized professional sports facilities, remains a puzzle,” said the authors of the study for the International Association of Sports Economists.

Part of the explanation may be “simple collective foolishness when it comes to matters of the heart like sports,” the economists said.

One former owner of the NFL’s Philadelphia Eagles, Norman Braman of Miami, drew his own conclusion when talking to the Miami Herald about the Marlins’ profitability while the team sought taxpayer subsidies.

“The taxpayers are stuck with paying [the money for the stadium] back.  It shows [the Marlins] should have built the thing themselves.  It shows the taxpayers are a bunch of suckers.”

 

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Merit Pay for Teachers: Take Time to Do It Right
August 3, 2010

When Florida public schools open for a new school year this month, students and teachers will take up where they left off last May.  But new policies now being put into place will create big changes in the next few years.  Among them:  how subjects are taught, which standardized tests students take, and how teachers are evaluated and paid.

Two developments last week moved Florida further along its decade-long education accountability path, as discussed in FCFEP's education report, "Florida's Latest Strategy for Improving Schools Promises More of the Same -- and Uncertain Results."

First, the Florida Board of Education formally adopted the new national voluntary Common Core State Standards, a set of expectations for student learning in math and English/language arts that eventually will replace the Sunshine State Standards.  New assessments ultimately will follow, replacing the Florida Comprehensive Assessment Test (FCAT).

Secondly, of more immediate concern, Florida was named one of 19 finalists in the competition to receive a share of federal Race to the Top education reform funds.  If Florida is among the winners announced about September 1, the state Department of Education (DOE) and local school districts would split as much as $700 million over four years to implement a variety of “reforms,” including merit pay for teachers.

Merit pay has been controversial for decades.  Advocates contend that there’s no evidence that the current pay system – based on years of service and the degree(s) earned by the teacher – correlates with student learning.  They say merit pay will reward the best teachers and weed out others.

Opponents object to tying salaries too much to the achievement level of students of widely varying abilities, family background and support, and previous educational experiences. Moreover, most studies find no conclusive evidence linking existing merit-pay plans with higher student achievement.

Florida already has a merit-pay law already on the books, although it’s not proven effective.  Adopted by the legislature in 2001 and revised in 2007, it created what Florida DOE calls “the most recent rendition” of teacher pay-for-performance efforts in Florida.  DOE admits that difficulties in linking student test data with teachers – particularly for teachers who don’t teach subjects and grades where the FCAT is required – have limited the impact of the current merit-pay requirement.

Nevertheless, some kind of merit pay is likely for Florida in the next few years.  Education-accountability reformers, the Obama administration, and legislative leaders are propelling the effort in the belief that nothing is more important to improving schools than – and that linking teachers’ performance to test results is essential.  

Florida DOE plans to develop a system that measures test-score improvement by each student and makes this “student-growth” the primary factor in evaluating teachers and principals and determining any future salary increases.  Furthermore, school districts would base decisions on employment contracts – “tenure,” or permanent job security – on those evaluations.

Teachers and their unions are joining the effort – as long as they are involved and evaluations of students include multiple measures, not just students’ standardized test scores.  The Florida Education Association supports the state’s Race to the Top application, which relies heavily on merit pay.  Local teachers’ unions also are participating in the design of merit plans in areas around the state, including in Volusia County, where the local union received $125,000 from the American Federation of Teachers to help the school district devise a pilot plan.

The most ambitious effort with the most money is occurring in the Hillsborough County school district. The Bill and Melinda Gates Foundation, increasingly a major player in education nationally, is providing $100 million to the Hillsborough school system to devise a system linking teacher pay with student performance.  The grant will fund more than 100 mentors for teachers and train evaluators in assessing teacher performance.

The lessons seem clear.  Successful implementation of merit pay will require time, money, and involvement from teachers themselves.  While the theory of tying students’ test scores to teacher pay is reasonable, practical concerns dictate that merit pay systems be tested through pilot projects, revised, and implemented carefully. 

Trying to accomplish too much too soon by a legislative mandate – without investing the time, money, and collaboration necessary to do it right – would only create unnecessary turmoil.

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Jobless Benefits for Floridians Await Legislative Action
July 16, 2010

The decline in Florida’s unemployment rate from 11.7 percent to 11.4 percent in June masks some less positive news.  Florida actually lost 1,900 jobs, which means some workers apparently have dropped out of the job market.  More than one million Floridians remain jobless.

Their plight may become even worse.  Unless the Florida Legislature acts, tens of thousands of jobless Floridians will be denied extended unemployment benefits funded by the federal government. 

After months of dispute, Congress finally appears on the verge of appropriating funds for the additional jobless benefits for the long-term unemployed.  But Florida law now prohibits jobless payments approved after June 5.

That one sentence in Florida law will result in the denial of benefits to 35,000 Floridians who exhaust their jobless payments each week.

It seems like a no-brainer:  making a slight change in Florida law to allow about $290 million in federal funds to flow directly to Floridians.  In addition to providing critical support to these workers, each dollar spent on unemployment benefits generates $1.64 in economic activity.   With Florida’s economy struggling to grow, that money will help businesses when jobless workers pay housing costs, buy food, and pay for other costs of living.  Without it, Florida’s recovery will be slower.

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