Nashville is first casualty of Moynihan arena debt legislation.
The bill has already disrupted Planning in dozens of cities, potentially affecting well over $7 billion worth of football, baseball, basketball, and hockey facilities already on the drawing boards. Perhaps more important, the pending legislation could disrupt the financing of many municipal recreation facilities which are used on occasion by Professional teams for training, but for which the primary purpose is school or public recreational use.
The bill effectively has halted all such financing since June 14, 1996, the day Moynihan introduced the legislation.
NLC was joined by six other state and local organizations in writing to the chairs of the House and Senate tax-writing committees last week to Urge immediate action to remove the cloud Put over such municipal financings. Noting that "the introduction of the bill mandates immediate, new costs on local governments," the letter to Senate Finance Committee Chairman William Roth (R-del.) and House Ways and Means Committee Chairman Bill Archer (R-Tex.) says:
"We can find no justification for significant financial penalties on local taxpayers based upon the mere introduction of a bill in the Congress which stands virtually no chance of consideration in this session. We hope you will agree with us that no individual member of Congress should be able to deny state and local governments their rights under existing law merely by introducing legislation. In one recent transaction, the borrowing rate was approximately 30 Percent higher than it would have been if there were not the uncertainty caused by this pending legislation."
With Congress scheduled to adjourn by early october, there is little chance Congress will even hold a hearing on Moynihan's bill this year. But its introduction, and the retroactivity feature, has already thrown a cloud over the ability and authority of cities to move forward on stadium or arena plans. Because a city bond counsel could not issue a clear opinion that the bonds would be exempt from federal taxation to purchasers--if issued after June 14-the bill has the effect of being law. The introduction of the bill with the retroactive date sets a precedent Of allowing a single member of Congress to dictate local priorities.
Moynihan wants to use the savings to the federal treasury from shutting down these municipal financing to pay for increased tax expenditures to benefit some 31 private colleges and universities--some of the most well-endowed and expensive universities in the nation. Moynihan is seek" to repeal the current provision in federal tax laws which imposes a $150 million cap on the amount of tax-exempt bonds am non-hospital 501(c)(3) organizations can have outstanding. According to Moynihan's office, there are currently just over 30 private colleges and universities that are at or close to that level who are seeking the additional federal tax expenditures.
The Moynihan bill would redefine sports facilities bonds as "private activity bonds," ineligible for tax-exempt financing. It would define a sports facility to include real property ad related improvements which are used for professional sports exhibitions, games, or training, whether or not admission of the Public is free or paid. The bill would apply to any municipal bond where five percent or more of the proceeds from the sale of such a bond were used to finance a sports facility or related improvements, such as highways or other publicly owned and operated facilities in some way related to the facility.
The bill, therefore, applies to far more public facilities in cities and towns than just professional sports stadiums. It applies to municipal recreation and scholastic facilities that are used by professional sports teams. It applies to highway construction financing and other public improvements near a professional sports facility. The bill would mean, for finance, that many recreational facilities in cities whose primary purpose is for public use and recreation would be redefined as private facilities with a mandated cost increase to finance improvements or new facilities of as much as 30 percent.
So while the bill purports to target major stadiums, its effects could spread to many facilities used for training by professional sports teams through metropolitan areas, as wee as to municipally owned and operated facilities which minor league teams use for less than a quarter of the year-and which are devoted to high school, college, charitable, or community use for most of the time.
Localities Affected Among the local governments already adversely affected by the Moynihan bill are:
Broward County, Florida Miami Tompa Jacksonville New York City Greenville, S.C. Pasadena Atlanta Minneapolis St. Paul New Orleans Milwaukee Denver Phoenix Mesa Pema, Ariz. Cleveland Akron, Ohio Seattle Nassau County, N.Y. Prince George's County, Md. Nashville
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|Title Annotation:||includes related information on other affected cities; Nashville, Tennessee; Senator Daniel Patrick Moynihan|
|Publication:||Nation's Cities Weekly|
|Date:||Jul 1, 1996|
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