Budget season has finally ended in Albany, and under Governor Kathy Hochul, the state has authorized $220 billion in spending, allocating generous funding for child care and public education. Still, the budget was mostly what a centrist governor — someone with Andrew Cuomo’s politics, if not his vitriol — would have largely wanted. Hochul forced an expansion in the use of cash bail, infuriating progressive lawmakers, and refused to fund a new housing voucher program for the homeless and economic aid for undocumented immigrants. Taxes have not been increased on the rich.
Some activists and lawmakers have called it the worst budget in a decade. This is an exaggeration. But one slice of the budget, in addition to rollbacks in criminal justice reform, was particularly glaring. More than a billion dollars of public money will be committed to build a new stadium for the Buffalo Bills.
It was a favorite project for Hochul, a Buffalo-area native and ardent Bills fan. The deal itself, with the billionaire Pegula family who own the Bills, was negotiated in secret and announced shortly before the start of the new fiscal year on April 1. This was a cynical and Cuomoesque maneuver by Hochul, as she understood that approving the tax subsidy would be much easier if she incorporated it into the state budget. She figured lawmakers would be forced to approve it because too few would be willing to reject the entire budget. She was right.
In the end, the budget arrived a week late, as state lawmakers and Hochul squabbled over big policy points and debated whether they could approve the grant for the Pegulas, who had threatened to move the Bills out of Buffalo. In the end, there were plenty of Democrats in the House and state Senate to vote for the budget, with only a handful of progressives and socialists defeating it. Even Liz Krueger, a fierce opponent of the Bills deal and a state senator who chairs the finance committee, voted for the budget. Michael Gianaris, Vice President of the Senate and ally of Alexandria Ocasio-Cortez, did the same.
The Bills grant is the largest for a football stadium in American history. The highest figure reported in the press was $850 million, but the cost to taxpayers will be higher. First, the state will spend $600 million to cover initial construction costs. Erie County must contribute an additional $250 million. An additional $100 million over 15 years will fund stadium maintenance and repairs. A county and state authority created to oversee the stadium is to pay $180 million on the 30-year lease for capital improvements.
The Pegulas have a net worth of at least $5.8 billion, some of which could easily be deployed on a new stadium. The NFL is the richest sports league in the world. Neither deserves any welfare benefits paid by working New York State taxpayers.
Hochul and local Erie County lawmakers believe the money is worth it because a new stadium will spur economic development and the threat of the Bills leaving must be avoided at all costs. It’s true that losing the Bills would be a devastating blow to Buffalo, New York’s second largest city. The fans are deeply devoted to the team there.
But Hochul should have called the Pegulas bluff. With new NFL teams now established in Los Angeles and Las Vegas, there are fewer viable destinations for franchises. The Pegulas had been making noise for dragging the Bills to Austin, but the Dallas Cowboys were ready to short that idea. Threatening to move out is a tired ploy of wealthy landlords seeking government grants. Rather than give in to the pressure, Hochul should have recognized the threat for what it was.
More importantly, a new stadium will not revive Buffalo, one of the poorest cities in the country. Sports stadiums are not tools for local economic development. On this point, economists left and right agree. Fans spend most of their money inside the stadium, not outside. The revenue generated by a sports franchise is donated to the team. Jobs are generated for construction and concession work, but not much else. Given the aggressive tax subsidy, it’s unlikely a new Bills stadium could ever generate enough economic activity for the region to repay taxpayers for what the Pegulas devoured.
Meanwhile, the opportunity costs are significant. Erie County could spend $250 million to clean up lead in poor Buffalo neighborhoods or upgrade crumbling infrastructure. Buffalo Public Schools continue to struggle. The city is recovering from the depths of deindustrialization of the last century, but its return has been uneven. Like other Rust Belt cities, Buffalo is brutally unequal and segregated, with wealth flowing nowhere near its black working class.
Rather than tackle these issues head-on, Hochul will ensure that public funds instead go to a football team that plays nine games a year in the city’s suburb of Orchard Park. The reality of Buffalo’s working class will not change at all. Politicians like Hochul don’t seem to care anyway. It’s an election year, after all, and now she can claim she saved the Bills.