Comments on: How Long Would It Take to Pay Back…

By: jake

jake — Tue, 31 Mar 2009 18:03:42 +0000

Dave – I was merely pointing out the hypocrisy of Abramson’s crew, which has suggested recently that we’d make it all back up in tax dollars ASAP.

By: Dave

Dave — Tue, 31 Mar 2009 18:01:50 +0000

Jake look at the Cordish agreement. The new tax that is levied on the other business in the area (TIFF) are taxed at an additional 1%. That money does not go to the city or state 90% of all the tax money goes back to Cordish. If you read the agreement we charge the tax payers to pay for security and build out of the property but we give the tax money back to them. It is in the agreement. Those are some of the real numbers

By: Crutnacker

Crutnacker — Tue, 31 Mar 2009 15:29:43 +0000

Anyone ever think that perhaps Mayor Jer is simply dumb? He thinks that surrounding himself with the trappings of bigger cities (new arena, Cordish company developments) he’ll be the mayor of a major city?

I think mayor for life may have won his last election.

By: Bob

Bob — Tue, 31 Mar 2009 14:39:28 +0000

Abramson doesn’t care about facts like these. He just wants to be Lord Bountiful to his buddies, handing out cash and contracts and jobs with that big grin that means “I know you will be with me next election time.” It’s that simple.

By: keatssycamore

keatssycamore — Tue, 31 Mar 2009 12:50:25 +0000

If you sell $5 drinks @ 6%, that’s 30 cents per drink. You’d have to sell 3.3 million $5 drinks to repay that $1 million. We’ve checked around and an establishment like, oh, any bar on Bardstown Road sells something like 185,000 drinks each year which average about $5. So… that’d take roughly 18 years to pay back $1 million. It's even worse than that because the above assumes that the people drinking at Cordish are new drinkers. They'd have to be brand new drinkers who would not go to Bardstown Road to drink, but would ONLY go purchase a drink if Cordish puts up some wallpaper in Lucky Strike, in order to avoid the substitution spending effect. Otherwise, each drink at any establishment is all just substitution spending because the drinker is going to drink somewhere and that somewhere drink, be it at Cordish or Flannigan's or City Block, is going to be subject to 6% sales tax (BTW, this is what is so stupid about the sales tax projections they make for the arena). Remember, if, in the absence of Cordish rehab, you would have still gone out on a Friday and bought a drink on Bardstown Road, then you can see that there would be no overall gain in sales tax receipts. For instance, this article from the Minneapolis Fed, makes the substitution spending point: "Impact reports typically ignore several other important factors. The most important are what economists call "substitution effects"—where spending for one activity merely replaces spending on other previous activities. While new entertainment options do likely bring in some new spending, advocates often mistake economic activity (all spending related to a sporting event or convention) with economic impact (new spending that otherwise would not have taken place)... ...Even more overlooked is the substitution effect in public spending—other priorities that could have been funded, or taxes simply not collected. Dennis Coates and Brad Humphreys of the University of Maryland-Baltimore County have done extensive research on the economic impact of stadiums and arenas. They conclude in a recent paper that "impact studies typically do not address alternative uses of public funds. Indeed, politicians often seem to think that the means of financing the stadium generates free resources that have no alternative uses whatsoever. ... [R]ules for sensible public investment should apply to stadium finance as much as they apply to public provision of highways, schools and airports." Public spending on new venues also funnels most of the economic benefits—namely increased patronage—to lower-wage industries like lodging, eating and drinking establishments. Rosentraub's research on private sector employment and payroll in large counties found that these sectors make up about 8 percent of local jobs, but pay just 3 percent of all local wages. On the surface at least, public capital for other initiatives might produce better jobs and wages for local workers.

By: Crutnacker

Crutnacker — Tue, 31 Mar 2009 04:11:46 +0000

Jake, you are such a dumb ass. Don’t you realize that there are not sports bars in other cities? By having a sports bar in such a major sports town (after all, people all over the country sit transfixed in front of their television sets watching U of L basketball and horse racing at CD), we will finally be able to attract tourists in vast numbers to the state. It’s a lot more than a bar dude, it’s essentially our version of the St. Louis Arch…. or possibly the Louisville Falls Fountain.

By: Bruce Maples

Bruce Maples — Tue, 31 Mar 2009 02:44:10 +0000

Jake — I’ve been watching some b-ball (Lady Cards make Final Four!), so I’ve not been by in a day or so. But, you have hit one of my absolute rawest nerves — the use of incentives to “bring in more tax revenue” when in reality it will take years and years to see that money — if at all.

They could make the case for secondary impact (the rest of those wages and their effect in the community), but they usually don’t. They usually make the 1-for-1 argument, and as you deftly point out, it doesn’t hold water.

Off to my site to post a link to this story. Thanks for the math heavy lifting! :-)