What We’re Talking About When We’re Talking About Public Money (for the Olympics)

Conceptual drawing of the Olympic Stadium at Widett Circle.
Conceptual drawing of the Olympic Stadium at Widett Circle. –Boston 2024

In April, a Boston Globe poll found that support for hosting the 2024 Summer Olympics in Boston is comfortably below 50 percent both in the city and the state. However, 59 percent of Massachusetts voters and 57 percent of those in the city said they would support a bid that did not use any public money to fund venue construction or the actual staging of the Olympics—as bidding committee Boston 2024 has pledged.

The trouble? Despite the pledge, according to the poll, nearly 89 percent of Bostonians said they felt taxpayers would wind up on the hook.

For those steadfastly opposed to hosting the games, financial concern is just one item in a long list of worries. Other concerns include security, gentrification, and the potential for political corruption.

Advertisement

But polls about the Olympics are coming in fast and furious now, and they repeatedly indicate that the possibility of taxpayer money going toward the games—and a strong belief that it would—is playing the biggest role in keeping support for the bid low in the general public.

For example, just a few days before the Globe survey, Suffolk University’s polling arm arrived at very similar results. While a plurality of Bay State voters said no to the idea of bidding, more than 55 percent supported the bid if it excludes public spending on Olympics operations. Meanwhile, a poll from WBUR/MassINC in mid-April found that nearly 90 percent of voters in Greater Boston believed hosting the Olympics would go over-budget.

“No public money’’ has been a refrain, with some caveats, from Boston 2024 since last year.

The question of public spending on an Olympics bid is a complicated one, though, because Olympic budgets are complex to begin with.

Let’s dive in.

Security

This is the most straightforward of the various Olympic funding proposals, and it’s all public.

Organizing committee Boston 2024 has said over and over that the $1 billion or more required to secure the city for the games would need to come from the federal government. Security would also be coordinated by the feds, with the games being declared a “National Security Special Event.’’

Advertisement

Some critics have said that Boston 2024 can’t guarantee that these costs would be covered by Washington. That’s true.

But we’d be talking about an Olympics on United States soil. Given the political climate when it comes to national security, it’s far more likely that the discussion at the national level would be about how much to spend on security rather than whether or not to pay for it. (In fact, that’s one of the major concerns of some anti-Olympic activists, who fear that Boston would be subject to overly intense security efforts if the games came to town.)

Infrastructure

Then there are the costs associated with upgrading the region’s less than terrific rails and roads.

Boston 2024’s position is that, technically, they don’t require any public money for these projects, because the only ones they really need are already on-track to happen. These projects include new cars for the Red and Orange lines, the upgrades at Government Center, and the move toward entirely electronic tolls on the Tobin Bridge.

Additionally, though, Boston 2024 has said it would be nice to have some other projects completed for the Olympics. Some—such as expansion at South Station, or rail service to southeastern Massachusetts—at least have a partial funding mechanism, in the form of a bond bill passed by the legislature in 2014. No project in that bill is a definite go, but bonds can be issued to pay for these projects, and Boston 2024 would advocate that happening.

Advertisement

Beyond that, the committee has also said it is hopeful the games could serve as a deadline or “catalyst’’ in getting other transit projects, which have no clear funding mechanism, underway.

For example, Boston Mayor Marty Walsh told The Dorchester Reporter that if the Olympics were to be held in Boston, it would “absolutely’’ need to rework Kosciuszko Circle and the JFK/UMass MBTA station—both of which would require new public funds. Other similar projects may also pop up—meaning that, yes indeed, additional public money would be needed for infrastructure as a result of the Olympic bid.

It’s not clear how that would affect general perception about the bid. A common complaint about Boston’s Olympic bid is that it seems like a ridiculous idea in the face of an ill-functioning train system and oft-crowded roadways. If the Olympics were to bring infrastructure improvements, it’s possible that could actually help get more people on board.

Some data may back that up, as in February (at the height of the T’s winter troubles), a poll showed that 40 percent of Boston-area voters—including 24 percent who had said they were opposed to the bid—would be more likely to support the Olympics idea if it involved public money going toward MBTA improvements, compared to just 16 percent who said it would make them less likely.

There are flipsides to that argument, though. The first holds that the city and the state shouldn’t be held waiting for transit improvements by a hypothetical event nine years away. The second is that even if Boston-area voters may like to see improvements to the MBTA and Greater Boston’s roadways, that doesn’t mean the rest of the state would. And given that Boston 2024 is planning a statewide referendum on the bid, that’s a voice with a lot of power.

Operations and venues

These are the ones with the lofty promises.

Boston 2024 has said since last year that it won’t need public money for two facets of its plans: Olympic operations—the costs associated with actually putting on and hosting the games—and venue construction—the costs to build the structures required to hold them. These are also the specific budget points the most recent Globe poll asked about when it brought up public funds.

For Olympic organizers, these are considered separate budgets. (Although, the operations budget actually includes temporary venues, such as the proposed Olympic stadium, while the venue budget is specifically for permanent venues.)

The operation budget as proposed would cost $4.7 billion, according to the bidding documents Boston 2024 released in January (which are subject to change). The budget would pay for technology, workers, support services, the construction of temporary venues, and more. It would be funded by ticket sales, sponsorships, a contribution from the International Olympic Committee, and other revenue sources.

Boston 2024 puts the costs of its permanent venue budget at $3.4 billion. They would include an athlete’s village in Dorchester, media and broadcast centers currently proposed for Fort Point, land preparation for a temporary Olympic stadium (but, again, not the stadium itself), and a few other venues such as a velodrome. There have been slim details about how these would be funded, but the idea is that they would be built as “public-private partnerships.’’

The most tangible example Boston 2024 has provided is that the athlete’s village, which would partially fall on UMass Boston’s campus. While that would be a large development with many facets, UMass would wind up with a couple thousand residences for students.

As an added wrinkle, Boston 2024’s own bidding documents reference “new tax revenues’’ as one way to pay to prep the land in Widett Circle for its proposed Olympic stadium.

Asked whether that means public money would go toward preparing the stadium site, Boston 2024 spokesperson Kyle Sullivan said the Widett Circle plan “will not be complete until we have extensive input from the community, support from stakeholders, a plan that is consistent with the future development goals of the city, and we work with the city and state to ensure the final plan is financially sound.’’ Sullivan pointed back to the construction of the actual stadium venue, which is distinct from acquisition and preparation of the land the venue would sit upon. “Boston 2024 remains committed to a plan for building the stadium with private funds,’’ he said.

Even if the final proposed operations and venue budgets don’t include public funds, these are the aspects of the bid that must be guaranteed to the IOC when it signs a host city contract with Boston. That means that if for whatever reason Olympic organizers can’t get them done, somebody—be it the city or the state—better get on it.

Boston 2024 says it will not bid if it cannot prevent the city from that possibility. It also says it plans to secure an insurance policy that would protect the city from cost overruns. Details on that plan remain scarce, and Boston 2024 CEO Rich Davey said in April that details probably wouldn’t be available for more than a year.

But critics have suggested the capacity for those overruns are high. Some have said Boston 2024’s proposed operations budget is optimistic (a point explored by Boston.com in January).

Olympics economist Andrew Zimbalist, who is a professor at Smith College, summarized some of these criticisms in an article for The Boston Globe. Among his points: There is little detail given about where revenue marked in Boston 2024’s bidding documents as “other revenues’’ and “additional revenues’’ would come from, and that Boston 2024’s proposed ticket sales outpace London’s despite its proposal for a smaller Olympic stadium.

Boston 2024 organizers say the $4.7 billion OCOG budget could still shift, as it will depend to some extent on the finalized version of its plans.

 

In the weeds

Beyond the four separate budgets—security, infrastructure, venues, and operations—the Olympics may also carry additional costs that aren’t immediately obvious.

Examples are vast.

Consider the $250,000 consulting fee the state plans to pay somebody to study the bid through this summer. That’s public money, related to the Olympics.

Or, as Zimbalist has said, the IOC usually requires that it be given control of a host city’s public advertising space over the course of the Olympics. That could mean public spaces would be cut off from advertising revenues for a couple of weeks in the summer of 2024.

To get really nitty gritty, how about the costs associated with a higher degree of trash pickup should the Olympics happen?

When we’re talking about billions and billions of dollars, these make for relatively small costs, and if other promises are upheld, maybe Bostonians would have a tolerance for them. But they’re public costs all the same. They’ve been pointed out enough that at a February meeting, Boston 2024 Chairman John Fish took a moment to stress that the group could only promise no public funds would be put toward venue construction or Olympic operations.

While Boston 2024 has spoken about holding a referendum next year about whether to bid at all, former third-party gubernatorial candidate Evan Falchuk has proposed a separate ballot question that would specifically address the use of public funds. It would prohibit the use of state money, and prohibit the state from taking on any liabilities in order to “procure, host, aid, further, or remediate the effects of, the 2024 Olympics.’’ Even that proposal comes with a big caveat, as it would allow for spending on transportation projects.

Take it as another example that diving into public spending for the Olympics means swimming in murky water.

Loading Comments...