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64 Cards in this Set
- Front
- Back
What is the difference between Public Interest Vs. Public Choice?
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Public Interest: use government as an allocator of resources to meet the public welfare to maximize public benefits
Public Choice: Use government as an allocation of favors to a tight coalition of groups or special interest |
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When was the Gestation Era?
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1961-1969, It marked the beginning of a period in which the norm was for governments to finance an construct facilities for the franchise.
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When was the public Subsidy Era?
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1970-1984 The popularity of professional sports grew substantially.
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From what years was the transitional( public private partnership)
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1985-2994 Governments assumed a progressively diminishing proportionate role in the financing a major new sport facilities.
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When was the fully loaded( private-public)
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1995-2003 47 major new facilities were constructed.
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In terms of spending, who should pay for the cost of a stadium?
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Owners Opportunity Cost
Public Equity Private Investors Owners Leverage Public/Private Partnership Power in the Community |
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What are some hidden costs of a new facility?
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The cost of land ( ex:Marlins → City of Miami Dade)
-Cost of infrastructure needs -The personal Costs of these being relocated |
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Public subsidization refers to:
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Legal Status of Professional Leagues
Exempt from normal antitrust rules |
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Cartels refers to:
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Restrict inter team competition for players
Control location of teams & broadcast rights |
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What occurs when one restricts a free market entry of competition?
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There is an imbalance of supply and demand
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If the city has 8 million dollars to invest, which of the following options is their best option?
1) Minor league baseball facility 2) Road Repairs 3) Public Transportation 4) School Repairs 5) Find an entrepreneur to build 8 KFC restaurants |
5. KFC
KFC -$7 million capital investment $350K Utility -$7 million annual sales $1 Million Local Contracts -payroll $2.6 million 20 yrs. commitment Employ 210 people 363 day a year -$860K sales tax revenue |
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The political reality of economic impact analysis is:
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to justify a position that either a sports organization or community elected officials have an adopted are proposing
Their point not to find the truth, but rather to legitimize something the sponsoring groups wants to “Prove” |
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What does the Integrity of El analysis depend on?
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1) Exclusion of local residents
2) Exclusion of “time –switchers” and “casuals” 3) Use of income rather than sales out-put measures of economic impact 4) Use of multiplier coefficients rather than multipliers and 5) Careful interpretation of employment measures |
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What is the Economic Impact Analysis
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Rationale for economic impact analysis to measure the broader economic benefits traces the flow of money
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Boade and Dye stated:
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That the economic impact analysis had no significant impact on the economy
- Bias towards low income jobs |
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Archer stated what?
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In 1982 Archer came up with 3 abuses of studies:
-failure to explain what a multiplier analysis is -use of different & controlling concepts of multiplier -misuse of multiplier concepts -studies indicate only 30% is “new money” |
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According to the economic impact analysis/principles of the multiplier concept, what are the themes of spending patterns
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local inter-industry purchases
-direct household income -local government revenue -nonlocal governments -nonlocal leakage |
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What is the Net Economic Gain?
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It is the dollars after leakage
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Sales Multipliers are used to:
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Multipliers are used to capture the secondary effects of visitor spending in a region.
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What are the two numbers you have to memorize when calculating sales multipliers?
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Sales 1.8 to 1.4
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Direct Impact refers to?
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The dollars spent by the consumer
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Indirect Impact refers to:
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Indirect effects are the changes in sales, jobs and income within backward-linked industries in the region, i.e., businesses that supply goods and services to tourism-related firms.
For example, hotels purchase a variety of goods and services in the local area in order to produce a night of lodging. Each business that provides goods or services to hotels benefits indirectly from visitor spending in hotels. |
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Induce Impact refers to:
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Induced effects are the changes in sales, jobs and income in the region resulting from household spending of income earned either directly or indirectly from visitor spending.
Employees in tourism firms and backward linked industries spend their income in the local region creating additional sales and economic activity. These impacts are most readily seen when there is a significant drop in tourism activity. |
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True or False: When Calculating sales the numbers used are .8 and .4
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False: You use 1.8 and 1.4
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Fte refers to:
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Full time Employment
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The Labor hrs of emplyoment per week are 1280? T/F?
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False they are 2080
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What do the Labor Hrs of Emplyoment tell you?
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They inform you how many full time employees 1 can house
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What does the below detail
12 FTE 81 games 50 part time employee 5 hours 5 hours * 81 games = 405 hrs * 50 PTE = 20,250 hrs 20,250 hrs/2080 = 9.7355 ⇒ 9.7 9.7 + 12 = 21 jobs |
12 fte= 12 full time employment
81 games at home per season 5 hrs per game Says 5 hrs * 81 games= 405 hrs * 50 pte= 20,250 hrs/ |
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What does the magnitude of the multiplier depend on?
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depends on the size & structure of the host community
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Less Linkage=
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A High Multiplier
It means the state is higher |
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What are 3 big question one asks out of town visitors?
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1) What is your home zip code?
2) How many people were in your group? 3) Would you have come to the city anyway? |
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What are some alternative justifications for public money justification for the investment
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Increased visibility
Enhanced community image Become a major league city Increased Development |
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What are 2 crucial factors for success
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-must have a threshold level of cumulative attraction
-ensure the facility is part of an integrated master plan for the development area |
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Detail 3 types of development
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-proximate development (restaurants ex)
-complementary development (direct link to the facility) -general development (catch up everything) -Gresham’s Law (bad $ drive good $, out of market place) |
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Psychic Income refers to
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-is the emotional and psychological benefit resident perceive they receive, even though they do not physically attend sports events and are not involved in organizing them
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What are some examples of Hard Taxes?
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Property Taxes – local government (1 source)
Sales Taxes – state government Sources Taxes – City Taxes City Sales Income Tax |
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What is an advantage of living in florida?
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The is no State income tax
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What does a tax base=
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Tax Base= aggregate value of assessed value property tax
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Define: Property Tax:
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owner is required to pay on the value of the property being taxed.
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Soft Taxes refer to:
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Tourist Development Taxes
Hotel/Motel Tax Car Rental Tax |
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Municipal Bonds are:
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-issued by state and local government to finance capital spending programs
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General Obligation Bonds
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-paid back through taxation – full faith backing
-normally involve property tax require votes |
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Tax on Revenue refers to:
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-“sin tax” tourism tax
-tax on revenue streams at the event/facility -approval but not public vote |
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Certification of participation refers to
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-government creates corporation to buy/build a facility
-government leases the facility to pay back the bonds |
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What are the different Bond Ratings?
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AAA > AA > A
BBB > BB > B CCC > CC > C D Higher you rating less you have to pay *** Lower you go, you pay more |
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Generally how much do u pay on Bond Rates?
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Rates= Amount needed/Tax Base
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What are Public Sector Assets?
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-Land Bank
-Tax Waiver -Low Cost Capital -Control over permit & zoning process |
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What is Public Choice Theory?
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The use of economic tools to deal with traditional problems of political science. Its content includes the study of political behavior.
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What is Privatization?
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Changing something from state to private ownership or control
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What is economic Impact
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To trace the flow of money, the ripple effect of every dollar spent.
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The Political Reality of economic Impact analysis is?
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To justify a position that either a sport organization or community elected officials have adopted or are proposing. Their point is not to find the truth but rather to legitimize something that the sponsoring group wants to prove.
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What is the purpose of an economic Impact statement?
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To prove your point, and follow the flow of money.
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What is Direct Impact?
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Is the value of the first dollar spent.
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What is basically Indirect Impact?
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The first ripple affect that takes place.
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What is basically Induced Impact?
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All the people who work there, that get their paycheck and spend it in the local economy.
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What is Proximate Development?
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All the new businesses that want to go in (hotels etc)
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What is Complementary Development?
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All new business that are associated with the venue. (Concessions, apparel, security)
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What is General development?
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The Chamber of Commerce tries to quantify the event or venue.
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What is Gresham's Law?
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Bad Money runs Good Money out of the marketplace.. If you invest in something bad, new money will not follow.
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Private Sector Assests
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Management Expertise
Reduced labor cost Adaptability to scale of service Reduced liability risk. |
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Public -Private Partnership Model.
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Public Sector Leasing
Leaseback Arrangements Public Sector Takeovers Private Sector Takeover Private Sector Pump Priming Expansions of Existing Public Multiparty Arrangements |
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What is the Economic Impact Model Equation?
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Direct Spending x Multiplier = Economic Impact.
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What is the Part Time to Full time Equation?
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Total Hours worked/2080 = How many FTE jobs.
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What is the Tax Rate/Raises equation?
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Rates = Amount needed/Tax base
*Break it down by how long the project is and them divide it by the tax base. |