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U.S. taxpayers are ponying up $154 million for new Huskies stadium

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U.S. taxpayers are ponying up $154 million for new Huskies stadium

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Interesting article on how some universities - in this case the University of Washington - are finding creative tax means to fund massive athletics complex renovations. Unethical? Could we do the same?

"Tax breaks on municipal bonds issued for the $250 million stadium, donations for construction and increased contributions tied to ticket purchases will cost the U.S. Treasury $154 million over 30 years, based on data compiled by Bloomberg. Without the exemptions, Athletic Director Scott Woodward says, he couldnít have financed the overhaul.

As the schoolís football team prepares for a bowl game Dec. 22 in Las Vegas, the field at Husky Stadium is dotted with earth movers and dump trucks. The construction shows how even some of the most soundly run college football programs benefit from indirect tax subsidies totaling hundreds of millions of dollars. In addition to the deductions that helped fund this project, sports departments are exempt from taxes on ticket, television and other income generated by their stadiums.

The system of taxpayer subsidies is contributing to a financial arms race among the 120 schools in the top division of football, the most lucrative college sport.

Tax preferences reduce the cost of athletic programs, allowing schools to build bigger facilities and pay coaches more. Breaks targeted at fans reduce the cost of tickets, allowing schools to raise prices. Dennis Coates, an economist at the University of Maryland Baltimore County, said college sports may not be the best use of tax exemptions.

"If we are going to allow charitable donations, we should think about what the ultimate purpose of those donations happens to be," Coates said in an interview. "When one thinks of charity, they donít think of charity flowing to the head football coach of a big state university."

Coates also questioned muni financing for stadiums. "Using the borrowing power of the state and tax-exempt interest to build stadiums for sporting events isnít the real purpose of the university, either," he said."

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