Time to Eliminate Madison Square Garden's Tax Exemption
Since the exemption took effect, MSG has been exempted from paying nearly $1 billion in property taxes, as measured in 2023 dollars, to New York City.
As Madison Square Garden’s operating permit is up for renewal, New York City’s Independent Budget Office (IBO) released a report that the arena has been exempted from paying nearly $1 billion in property taxes. There is little evidence to suggest continuing this tax exemption is needed.
Tax exemptions for stadiums have been widely criticized as economically inefficient. These substantial government subsidies divert public resources away from more pressing needs. Research has also shown the economic impact of these subsidies is often overstated, as promised benefits, such as job creation and increased tourism, rarely materialize to the extent projected.
As the IBO report highlights, the inefficient allocation of public resources towards sporting arenas underscores a need for more prudent and equitable economic development policies that prioritize long-term, sustainable growth for the entire city.
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Since the start of the year, the average monthly number of individuals in New York City shelters has increased 18%. It was reported late June that when Mayor Adams took office there were 45,000 people in the city’s main shelter system. Recent estimates of non-migrants in the system is nearing 50,000, with at least 17,000 migrants in facilities outside the main shelter system. Although fewer migrants are being bused to the city from Southern states, more are coming from other parts of the country.
An Examination of The Madison Square Garden Property Tax Exemption New York City Independent Budget Office (IBO)
In 2023, the Department of Finance estimated the value of MSG’s tax exemption at $42.4 million. Since the exemption began, MSG has avoided paying over $946.7 million in property taxes (2023 dollars).
The Department of Finance does not invest significant resources in estimating the value of the arena due to the knowledge that no property taxes will be collected.
MSG’s property tax exemption does not conform to best practices for economic development tax expenditures. The arena's ownership is not obliged to report data on jobs created or wages paid, hindering evaluation of its impact as an employer.
Public economics experts generally agree that significant government subsidies for sports facilities are not an efficient allocation of limited public resources.
MSG's tax expenditure contradicts the city's economic development policy, which prioritizes economic growth in Upper Manhattan and non-Manhattan boroughs.
Access and Exposure to Local News Media in the Digital Era: Evidence from U.S. Media Markets National Bureau of Economic Research
Minority and low-skill individuals, who experience significant exposure to local economic shocks, show stronger preferences for and reliance on local news compared to high-skill and white individuals.
Disadvantaged individuals have been negatively affected by the digital revolution in news provision. High-skill and white individuals have embraced online and social media platforms, while low-skill and minority individuals still heavily rely on traditional news providers.
The differences in provider choices are crucial because the digital revolution has diminished the quality of traditional news providers while online and social media platforms have seen a substantial increase in quality and quantity.
The loss of local newspapers and television stations is found to reduce welfare significantly, with an average loss of $923 for newspapers and $1064 for television.
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