ABSTRACT
In 2010, the government of Hamilton County, Ohio, found itself unable to make the $27 million annual payment owing on two new major league sports facilities recently built in Cincinnati: Great American Ballpark and Paul Brown Stadium. The bonds issued to finance the two stadiums—with a face value of approximately $540 million when issued between 2000 and 2003 as part of an ambitious waterfront development project known as “The Banks”—were to be repaid through a half-cent sales tax increase whose revenues were dedicated to the sports facility bonds. 1 However, sales tax revenues were lower than forecasted due to the nationwide recession, meaning that the county would have to find another way to come up with the money. To default on the payment would risk having the county's bond rating down-graded, which in turn would lead to increased borrowing costs for future capital improvement projects. In the end, county officials decided to make up the shortfall by making cuts in other programs, as well as school budgets, and a reneging on a promised property tax rollback. The long-term viability of the sales tax fund used to support these payments remains in question, with voters unwilling to support further sales tax increases.
