Taxpayers footing the bill for college football stadium frenzy

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Critics slam use of tax dollars to fund college stadiums

Dan Springer reports from Seattle

College football is big business. Networks pay billions of dollars for the rights to broadcast games, top coaches are paid millions of dollars a year -- and it's led to somewhat of a race for the best stadiums. Expensive renovation projects, like the ongoing $250 million facelift of Husky Stadium at the University of Washington in Seattle, are the rage.

But some might be surprised to learn that taxpayers are footing part of the bill.

"Our fans are passionate and they love this place," said University of Washington Athletic Director Scott Woodward. "But the tax benefit is big."

Woodward isn't sure if those faithful fans would have donated toward the renovation if they were not also receiving a tax break. The Washington renovation alone is costing the U.S. Treasury $154 million over 30 years. But even that's small when you consider U.S. colleges have spent nearly $17 billion on stadium upgrades over the last decade.

State legislatures are refusing to fund the building boom, so universities are going to wealthy alums who write big checks -- but then in return get a tax write-off. Their donations are considered charity, exactly the same as money given to a soup kitchen. Critics say the tax code has too many giveaways.

"Everything needs to be looked at right now," said Will Pittz of Washington CAN, a Seattle-based non-profit. "And that should include charitable donations and what they're really going for."

Athletic directors argue there's little difference between charitable giving to college stadiums and donations made to the local symphony. Both venues provide entertainment. Economists say whether it's touchdowns or tubas, everyone shares the burden.

"Taking money out of the tax revenue increases everyone's marginal rate," said Seattle University economist Katie Fitzpatrick, "so everyone is paying a little bit more because we give these and many other tax breaks."

According to the Office of Management and Budget, charity write-offs cost the U.S. Treasury more than $36 billion in 2011. Ten percent of that was given to universities.

Montana's Max Baucus, chairman of the Senate Finance Committee, will hold more hearings this year in hopes of reforming the tax code. He wants to encourage charity aimed at those who are truly in need.