Wednesday, June 23, 2010

Graham Has Found a Way to Get More Federal Tax Money for Penn State Without the Hassles of Haggling for Earmarks or Competing for Grants

Longtime Penn State football fans are outraged, outraged I tell you, by the 500% increase in the fee required to get season tickets for Nittany Lion football games from $100 to $600 per year, i.e. the  Seat Transfer and Equity Plan (STEP).
A fan with four seats near midfield who has been paying $400 in Nittany Lion Club dues will see that price jump to $2,400.
"We can't afford that," said 84-year-old Jim Williamson from Bellwood, a 1946 PSU graduate and season-ticket holder since 1960. "It's just not possible. On our income, we can't do it."
This fall will be the final season, therefore, that Williamson buys his four season tickets.
"I hear a lot of people say, 'I'm not going to renew my tickets,'" Williamson said. "I know there are a lot of people waiting for tickets, but it's going to be interesting to see if they can maintain about 110,000 there for games.
"They're just taking a big bite out of everybody. I don't understand it. It's to hell with everybody. If you can't afford it, get out."
Some seats cheaper
Season-ticket holders still can purchase tickets for the $100 minimum contribution, but they will have to move to other parts of the stadium.
"I won't move," said Williamson, whose seats are in section WF near the 35-yard line. "I picked those seats out in 1960, and I'm not going up in the end zone. That's the dead zone."
I share their outrage, although I never set foot in Beaver Stadium on Saturdays for football games. I'm outraged because Graham has unilaterally decided to stick it to taxpayers. Since 1988, 80% of such donations have been tax deductible.
In 1986, U.S. Rep. Jake Pickle, a UT alumnus and member of the House Ways and Means Committee, wrote an amendment to the tax code that made the pre-ticket contributions 100 percent tax-deductible - but only for fans buying tickets to University of Texas and Louisiana State University games (U.S. Sen. Russell Long of Louisiana was also a sponsor). Two years later, Congress extended the write-off to all universities, although it lowered it to 80 percent.

Since then, donors to university programs - individuals and corporations - have enjoyed hundreds of millions of dollars in tax breaks for contributions linked to college sports events. An increasingly vocal group of critics contends that the untaxed money is in effect a public subsidy that encourages universities to spend more freely on an athletics arms race as schools build bigger and fancier stadiums and arenas.

The river of spending is fed by many tax-free tributaries. This year [2007], football fans will pay about $15 million to the Longhorn Foundation in contributions qualifying them for season tickets. That's a potential $12 million tax break for fans to watch UT football.

Luxury suite leases also qualify their buyers for the 80 percent tax deduction. Tax experts say about 60 percent of a skybox's cost is deductible by donors (the actual value of the room is not). This year, suite sales at Royal-Memorial Stadium will bring UT $10 million in income - about $6 million in potential tax breaks for fans to watch football from a private room.
That's right, Graham is taking more money away from the federal coffers at a time of record high budget deficits. I'm sure all the fiscally conservative Teabaggers in the Nittany Nation will share my outrage and demand that the Congress eliminate this massive give away.
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