Illinois has plenty of problems. Its tax system is complicated, its approval process is slow, and its politics made the Arlington Heights path harder than it needed to be. In this case, though, Illinois not rushing into a special deal for the Bears was not the main policy failure. Indiana is the state now moving toward a taxpayer-backed stadium package for a franchise valued at more than $8 billion.
Indiana’s plan does not simply clear red tape so the Bears can build. It creates a special structure around one project. Senate Bill 27 created the Northwest Indiana Stadium Authority, giving it the power to issue bonds, acquire land, and negotiate a long-term lease with the team. The plan includes up to $1 billion in public bonds, while the Bears say they will contribute $2 billion privately. Local admissions, food and beverage, and hotel taxes would help repay the debt.
That may sound like a clever way to make visitors pay for the stadium. It is still public financing. The stadium authority would own the building, the Bears would lease it for decades, and under SB 27, the Bears would have the option to purchase the stadium for $1 once the bonds are paid. Taxpayers would carry the risk while the franchise captures much of the upside.
That is not free-market competition.
Instead of creating a low-cost, predictable environment for all businesses, government officials are chasing one politically attractive project because they erroneously believe it will generate taxes, jobs, and development. Government is putting its thumb on the scale in a way no ordinary business could hope to receive.
This is the kind of deal Roger Noll and Andrew Zimbalist warned about in Sports, Jobs, and Taxes. Stadium subsidies are usually defended as economic development, but their research found little evidence that publicly subsidized stadiums generate a reasonable return for taxpayers. The costs are spread across the public, while the benefits are concentrated among owners, developers, and the politically connected interests closest to the project.
Sports matter. A football team can give a region a shared identity and give people who disagree about almost everything else something to cheer for together. That still does not justify a public financing package.
The better answer is to stop pretending every stadium requires a public financing package. None should. Oracle Park in San Francisco shows another path: a largely privately financed stadium where surrounding development followed private investment.
Illinois did many things wrong during the Bears saga, but its refusal to rush a special deal is a rare “broken clock is right twice a day” moment. Still, the answer to Illinois’ dysfunction is not for Indiana to hand a wealthy NFL franchise an extravagant taxpayer-backed deal. Economic development is not promoted when localities engage in a bidding war that fleeces taxpayers to provide special treatment for the loudest and most mobile interests.
If the Bears want to build in Hammond, they should be free to do it. If fans, investors, developers, and local businesses see value in that project, they should be free to build around it. What should not happen is for government to pick winners and losers and make one private business worth more than $8 billion the centerpiece of a special tax and bond structure while everyone else plays by the normal rules.
Real competition between states should mean lower costs, simpler taxes, safer streets, better infrastructure, and a predictable path to build for everyone. It should not mean seeing which state can put taxpayers further behind one franchise’s stadium dream.
Anthony Velasquez, MBA, is Pacific Research Institute’s Communications Specialist.