Winter Green Fuels Games

The Salt Lake City Winter Games will be very, very expensive. How expensive? Depends on who is doing the math.

The last Olympics to be held in the United States for at least 10 years will cost at least $1.9 billion--and may be the most expensive Winter Games ever staged. That figure reveals the staggering growth in the scope and size of the Games over the past two decades even as it underscores a growing controversy about taxpayers’ role in funding a U.S. Olympics.

Salt Lake Organizing Committee President Mitt Romney and International Olympic Committee President Jacques Rogge say it would be impossible to stage the Olympics without government support. Such investment leaves a “great legacy” to Olympic cities, Rogge asserted: “These are not wasted funds.”

But others, including Sen. John McCain (R-Ariz.), have criticized the rising costs, particularly taxpayers’ share. Direct federal, state and local funding of the Salt Lake Olympics totals $622 million.

“It’s outrageous, disgraceful and obscene,” McCain said. “It was very small in the beginning, then it got bigger and then it got bigger.”

Precisely how big, however, is open to debate.

There are several reasons why: No central financial clearinghouse exists. Certain numbers are difficult if not impossible to independently verify, especially when foreign host cities are involved. And there is sharp dispute about whether to lump operating and capital expenses together--or to include any spending that affects the Games, even if indirectly or tenuously.

Some critics say the $1.9-billion figure is actually too low--that it ought to include government-funded road and rail projects in and around Salt Lake. Doing so would push the tab closer to $3 billion.

The current focus on U.S. taxpayer spending promises to spark a debate over the Olympic bid process in the United States, which until now has received little, if any, attention.

Certain figures are, however, plain:

The U.S. government will directly provide the Salt Lake City Games with nearly $400 million in funding. A significant piece of it is earmarked for security, and includes $55 million set aside to further increase security in the wake of Sept. 11.

State and local government funding totals $225 million. That money goes toward projects such as student residences at the University of Utah, which will be used during the Games for Olympic housing. Funds will also be used for a bus transportation network during the Games, which begin Feb. 8.

The vast majority of the funding will come from the private committee that runs the Games, the Salt Lake Organizing Committee, which is expected to spend $1.3 billion.

In all, direct Games costs thus total roughly $1.9 billion--of which taxpayers are picking up about $622 million, or 32%.

Some say the Olympic accounting should include indirect costs, specifically an additional $1.1 billion in government funding allocated to work on Interstate 15 and a light-rail system called TRAX that now cuts through downtown Salt Lake. These projects would have been done regardless of the Olympics but were accelerated because of the Games.

Others, including Romney, the SLOC president, sharply disagree with such calculations.

“The federal government is a huge financial partner in the Olympics,” Romney said. “The figure doesn’t need to be exaggerated to make that point.”

The challenge of reckoning how to figure Olympic spending is nothing new.

The 1976 Montreal Olympics, for instance, are often remembered for a nearly $1-billion deficit. Most of that was for construction cost overruns that dogged local governments for years.

But the local organizing committee budget--the operating budget--actually showed a surplus, according to an official Olympic history.

The accounting and categorizing challenge in Salt Lake can perhaps best be illustrated by assessing the work on I-15, the state’s main north-south highway.

It runs just west of downtown Salt Lake City. As with the light-rail system, Olympic authorities in Salt Lake did not ask for the I-15 work, Romney emphasized.

Is it necessary for the Games? No.

Will it help expedite traffic flow during the Games? Absolutely.

Does the work make it easier already for commuters driving to Salt Lake from Ogden to the north or Provo from the south? Indisputably.

“It is intellectually, financially and politically unsound to add up a bunch of projects that are used for 17 days for the Games and then benefit the community for years beyond and say these are costs directly attributable to the Olympics,” IOC member Dick Pound of Canada said when the issue arose during a recent IOC meeting here.

What the competing figures make abundantly clear is the incredible growth in the Games, particularly when the 2002 Olympics are measured against the 1980 Lake Placid Games, the most recent Winter Games to be held in the United States.

In 2001 dollars, after accounting for inflation, it cost $363 million to plan and stage the Lake Placid Olympics, according to a General Accounting Office report, which many believe is the most accurate accounting available.

At $1.9 billion, it will cost more than five times more to stage the 2002 Games than it did the 1980 Winter Olympics.

Additional points of contrast:

*The Lake Placid Organizing Committee’s budget was $121 million; SLOC’s, at $1.3 billion, is 10 times greater. A significant chunk of the escalation is due to technology costs, Romney and others said.

*There were 1,072 athletes from 37 countries taking part in 38 events in Lake Placid; 14 of the 38 were for women. Salt Lake is expecting 2,400 athletes from about 80 countries, and they will participate in 78 events--34 of which will be for women.

*Lake Placid held no Paralympics competition for disabled athletes; Salt Lake will, with a budgeted cost of $60 million. Indeed, the 2002 Winter Paralympic Games are larger than the 1980 Lake Placid Olympics when measured by number of athletes and sports.

*Security costs paid by the U.S. government in Lake Placid amounted to $23 million; those Games were held only eight years after the massacre of 11 Israeli athletes and coaches at the 1972 Munich Games, the event that ever after made security the No. 1 issue in pre-Games planning. Salt Lake’s bill already is 10 times greater.

“The world has changed since Lake Placid in ways that make the Games much more expensive,” Romney said.

Such data would seem to bolster IOC President Rogge’s oft-stated ambition to limit the size and scope of the Games.

Rogge, a Belgian elected in July to an eight-year term, has said he wishes to take the Olympic Games to places they have not yet been held--for instance, to stage the Summer Games in Latin America or Africa.

Escalating costs make such an undertaking impossible to realize for most developing nations. An exception: Beijing won the 2008 Games earlier this year after pledging to spend $14.3 billion in the next seven years for sports facilities as well as highway construction and a massive subway extension. Some reports now fix Chinese spending linked to the 2008 Games at $24 billion. This coming fall, the U.S. Olympic Committee will pick one of four U.S. cities to be the sole American candidate to host the 2012 Games. In the running are New York, San Francisco, Washington D.C. and Houston. Romney, McCain and others question why the U.S. government isn’t involved in that decision-making process.

Traditionally, the decision has been entirely within the USOC’s purview. Sandra Baldwin, the USOC president, declined to comment on the issue.

“The federal government should have some role, and perhaps it’s only an input role, in evaluating U.S. bid cities,” Romney said.

“We should have a seat at the table,” McCain said. “We should have a say.’