Guest Post; W.E. Heasley; Does Coliseum Pay For Itself?

GH; My understanding is that police officers working inside the Coliseum count toward the complex's budget deficit, but those working outside and the same events do not.

There are also multiple examples of cost shifting within the city's budget on expenditures paid for out of the General Fund, shielding Matt Brown from further scrutiny as the actual deficit is probably a good chunk higher than what the electorate is being told.
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Does Coliseum Pay For Itself?

A 09/26/2013 Greensboro News & Record article by Amanda Lehmert points out that an economic impact study by a Clemson University researcher shows the Coliseum only loses between $100,000 and $600,000 per year. That the deficit of $2.2 million ran by the Coliseum is offset by $1.6 to $2.1 million in tax revenue per the researcher’s results. That a complex computer model was used by one Rob Carey of the Strom Thurmond Institute Regional Dynamic and Economic Modeling Laboratory to produce the tax revenue numbers.

What the article failed to mention was that econometrics, as described above, is a wonderful science of guesses and is subject to major confirmation bias. No computer model can accurately measure particular time and particular circumstance of free people making a gazillion free decisions at the point of mutual self-interest, everyday and all day. The best one could ever expect is the identification of trends and patterns and those trends and patterns are indeed changing as well. Further, $14,000 paid for the study may well produce what one paid to see [confirmation bias].

Moreover, the article fails to consider the “unseen”. That is, the researcher’s best guess is the “seen“, but the unseen is: What if the Coliseum never existed and taxpayer dollars remained in the taxpayer’s possession?

One can state with certainty that the taxpayer spends his/her money based on particular time and particular circumstance to generate the highest utility. That those first party transactions of the taxpayer, with money which otherwise would have been allocated to the Coliseum, generate “economic impact” as well. One can further state with certainty that third parties, through collective action (Coliseum), do not spend money in a manner that maximizes utility of any one single taxpayer. Hence third party spending never reaches maximum utility for the vast majority of individual taxpayers.

It can be argued that the “unseen” would have generated an equal amount of “economic impact”. Moreover, the “unseen” would have maximized all taxpayer utility in all particular time and particular circumstance whereas the collective action merely maximized some people’s utility.

W.E. Heasley, CLU, LUTCF
Chief Economist
Heasley Insurance Services, LLC. Since 1979