The tax funding of Illinois college football programs

Introduction

Big-time college football is big-time business. And with big-time business comes big-time money.

The United States is undoubtedly an (American) football nation. When the leaves start to fall, we go giddy for the gridiron. While Chicago may be regarded as a pro-football town, college football is no exception.

What is sometimes forgotten is that the schools represented on the gridiron are first and foremost public institutions. To help finance their football program, they not only receive tuition, endowments, donations, and tv revenue but also tax money.

We here at Prairie State thought it would be interesting to dive into the publicly funded component of college football here in Illinois, from coaches salaries to facility maintenance to pensions.

Background

Let’s start with some overview before diving into Illinois specifics. When we say that college football is “big business,” we mean that a lot of money is being made. Perhaps the biggest recipients of this are the head coaches. Figure 1 below illustrates the top 15 highest paid college football coaches in the nation.

Figure 1: Data via USA Today

It goes without saying that if your a head ball coach at a big-time college football program, you are compensated rather generously. It should also be noted the the data above is accessible because it is public information. If you are football coach at a state university, you are a public employee. In effect, your contract and benefits are accessible to the public. This also goes for anyone who is on university payroll: the athletic director, trainers, professors, etc.

In contrast, if you are employed by a private school, your salary and compensation does not have to be public (e.g. Pat Fitzgerald of Northwestern). However, the information can still be accessible depending on university policy. Notre Dame’s Brian Kelly, for example, makes about $1.8 million. While still rather large, the salary is smaller than that of its public, state school counterparts.

Public money and Illinois football programs

Let’s first just take a look at a list of Illinois’ highest paid employees. Here are how those numbers break down for the top 15:

Figure 2: Table created by Prairie State Policy via data from the BGA

The columns highlighted represent a position involving athletics. Five of the 15 highest paid public employees have a position pertaining of athletics, whether it be a coach or athletic director. And the variance between the top two (head football coach and basketball coach) and rest of the 13 is noticeably wide.

It is important to note that this data is from 2018. Lovie Smith is no longer the head ball coach of Illinois, as well as Roderick Carey for NIU. Hardy Nickerson is also no longer an assistant coach. This, however, still does not change any trends. U of I’s new head coach, Brett Bielema, is contracted at $4.2 million. Thomas Hammock, Northern Illinois’ head football coach, makes $610,000.

So what?

It is not necessarily a bad thing that the state’s top athletic executives make so much money. American football is a cultural phenomenon that helps amplify civic and communal pride. Every Friday night, Saturday, and Sunday, communities gather to share in a common passion. When the team is winning, that passion is amplified to a sense of a stronger community well-being. People go to games, wear team colors, spend money at local businesses, and engage with their neighbors.

This all starts with the head football coach because it is their responsibility to win. In effect, the amount of money spent on head coaches could be worth the investment because there is a return of investment for the community.

So the question that must be observed is: to what extend is the excessive amount spent on college athletics a burden to the taxpayers? Simply put, how much of these salaries and other expenditures are being footed by the taxpayers of the state?

Jay Rosenstein, a professor at the University of Illinois, has extensively researched this question. He has published numerous studies documenting the effect of public money on college athletics in the state of Illinois. Additionally, some of his findings can also be found on his blog, The Multi-Million Dollar Head Fake. Let’s dive into some of the highlights.

Personnel Costs

We already know that head football coaches make the big bucks, but how much of the salary itself is from taxpayer money? The answer is zero. The salary is pretty much paid for via tuition and donations.

However, Rosenstein has found that taxpayer money does help fund the benefits (e.g. health insurance and pension costs) of other coaches, trainers, and athletic department staff. Moreover, these costs have been driven up due to an increase in hiring over the years as the industry of college athletics has grown. The more people the athletic department hires, the more the state of Illinois needs to compensate them for the benefits. Rosenstein estimates the total cost to taxpayers was around $6 million in 2016-2017, not including pension contributions the state must make. You can read more about that here.

Pensions

With a generous salary also comes a generous pension. Rosenstein has estimated that the total cost to taxpayers to fund pensions for employees of U of I’s athletic department was $2.6 million per year. Remember, that’s just the University of Illinois and the pensions have an annual cost-of-living adjustment. Moreover, The Chicago Tribune has reported that Ron Guenther, U of I’s former athletic director, earns a pension of nearly $500,000 per year.

Facility management

It has long been debated on whether tax money goes into the financing of stadium development or renovations. In 1992, the University of Illinois’ Memorial Stadium underwent a $18 million renovation project paid for via the sale of bonds. While no taxpayer money was used, Rosenstein contends that the university’s board of Trustees based a student athletic fee to help pay off part of the athletic department’s expense. Since then, Memorial Stadium has undergone various renovations.

It has been reported that student’s are still paying off renovations from 2008. In 2016, the University of Illinois announced $400 million more in renovations with no money being used from tuition, student fees, and taxpayer money.

This is not to say that tax money cannot be to help develop sports stadiums. Taken at the community level, a school district may decide to issue a levy on the ballot at election time to help finance school renovations. The levy could ask voters to help finance new facilities for the community.

At the university level, public funds can technically be used to finance stadiums. However, a decision to directly allocate revenue toward that purpose would be immensely unpopular with a low chance of succeeding (at least in this state).

Although we could not find any good examples of using taxpayer money to help develop and renovate college stadiums, the practice is more pertinent for professional stadiums in the state. Such examples include the development of New Comiskey Park, Toyota Park, the Ballpark at Rosemont.

Here, the use of taxpayer money to help fund a stadium can be justified as a communal expense that would pay dividends by creating a shared community space. As for university stadiums, a resident who lives 300+ miles away from the University of Illinois with no direct connection may view such developments as a waste of taxpayer money. What is important to note is that our state schools nonetheless remain as public institutions. Here, the argument could be made that such a development supports our public, state schools which can attract prospective students. Moreover, such an investment may induce talented, in-state students to remain in the state rather than leave. The debate continues.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: