The reality of a new Rupp arena




Column by M. Nolan Gray. Email [email protected].

As UK students struggle to find parking, deal with rising tuition rates and fees and fight to get into the few classes everyone seems to need, it’s good to know the university directors have their priorities straight: promoting sports above all.

As the city of Lexington faces serious budget cuts and a future of increasing deficits, a new basketball arena seems to remain a priority, and this is comforting to me, the average tax payer.

But enough of the sarcasm; we need to get real about our financial future, or we are going to seriously jeopardize the financial stability of our city. The first serious issue is funding. The process of building a new sports arena has started out on the right foot: with an unfunded $350,000 “task force.” But our inability to even make the first step is the least of our worries. With a deficit exceeding $25 million, and a projected boom in deficits as time goes on, finding the millions necessary for this proposed sports arena seems laughable. Mayor Jim Gray has made impressive cuts in refusing his salary, laying off public employees and closing two pools and a golf course.

While admirable in their ambition, these cuts at the very best only serve to reduce, not end, our persistent deficit.  Throwing a new basketball arena into the mix could lead to significantly higher deficits, and worse, significantly higher taxes. The fact is, we don’t have the money for a new city-owned sports arena.

Beyond simply not having the money, does the city government even have a responsibility to maintain something like a basketball arena? A common argument for those in favor is that it will increase economic vitality, but has been repeatedly proved untrue.

In a 2003 Cato Institute research article, Dennis Coates and Brad R. Humphreys found that a decrease in real per capita income was the common result of city-built convention centers/sports arenas. In fact, the studies on the subject generally seem to show that government built convention centers/sports arenas negatively impact the economy generally, encouraging the government to pour more money into them as costs rise over time, inevitably leading to increased taxes, making our city less competitive.

The evidence speaks for itself, but the principle is also important. Why should the city government coerce tax payers into supporting a sports arena they may very well not use? We know that by supply and demand, if the demand is there, private groups will build and maintain a convention center, and probably in a far more efficient manner. Government involvement is unnecessary at best and destructive to the economy at worst.

So the city government clearly cannot and should not build a new sports arena. But what about UK?

Well, I’ve got a novel idea: How about instead of wasting money on a basketball arena, we lower tuition and resume much needed raises for UK’s excellent faculty and staff who have not had raises in years.