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Texas Politics - Interest Groups
 
 
 
Financing of professional sports stadiums Financing of professional sports stadiums
concentrated benefits
4.2    Concentrated Benefits Versus Diffuse Costs

With many policies, especially those related to taxation and spending, the benefits might be highly concentrated, with the costs of that policy widely distributed. In such cases, a small group of people may receive extensive benefits from a government program or policy. Individual members of the broader tax-paying population bearing the costs are unlikely either to notice the portion of the total cost they pay, or to find it too costly to expend time and resources fighting those costs.

A familiar example of this dynamic is the public financing of sports stadiums by county and city governments in Texas' major urban areas. Since the mid-1990s local governments in Texas have provided over $800 million in public subsidies for the construction of professional sports stadiums in Dallas, San Antonio, and Houston. Increases in local hotel and car rental taxes used to fund these subsidies ended up pitting the hospitality industry against the owners of the sports franchises.

Voters were caught in the middle. Many sports fans who wanted to support their local teams, were unperturbed by the fractional increases in the taxes they would pay. Other citizens were appalled at the prospect of handing large sums of public money over to for-profit private interests. In the end, those with the largest and most concentrated benefits at stake were able to muster better funding and organization to their political efforts.

Texas Politics:
© 2009, Liberal Arts Instructional Technology Services
University of Texas at Austin
3rd Edition - Revision 115
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