Posted on 08/13/2015 6:53:56 AM PDT by Cincinatus' Wife
Today, Wisconsin governor and presidential candidate Scott Walker signed a bill providing public financing for a new basketball arena in downtown Milwaukee. Walker has recently taken some heat on the campaign trail from fellow conservatives, who object to “taxpayer money” being used to finance arenas.
An ideological aversion to taxpayer money being used to finance sports arenas is fine, but the actual structure of the Milwaukee deal is far more complicated than its opponents are letting on. Just today, for instance, Michael Tanner writes that using “$250 million of Wisconsin taxpayers’ money” is “a quintessential example of crony capitalism,” citing the plan’s ties to a co-chair of Walker’s presidential campaign. I suppose six Democrats in the state senate and 17 in the state assembly who voted for the plan are concerned about rewarding Walker donors?
Rarely will one hear the actual details of the complicated plan, which have been woefully misrepresented in the national media so far. A large chunk of the arena will be paid for through a $2 per ticket user fee. Of the $2 per ticket fee, 50 cents will go to offset $80 million in bonds issued and paid for by the state. This portion of the fee is expected to provide around $500,000 per year toward paying off the bonds.
The rest of the bonds will be financed with state tax revenues, but there’s an important catch — the remaining $3.5 million per year the state will pay over the next two decades is more than offset by the annual income taxes the Milwaukee Bucks franchise pays the state. According to state records, the Bucks pay $6.5 million per year in state income taxes. Every NBA player who comes to Milwaukee to face the Bucks pays a portion of his income to Wisconsin. This isn’t expected revenue from future economic development — this is money already being paid to the state. Thus, “taxpayers” won’t be paying the state’s portion, the Bucks will be.
And with the NBA’s salary cap expected to explode next year, the Bucks’ contribution to the project will only increase. The Wisconsin Department of Revenue estimates conservatively that over the next 20 years, the Bucks franchise will add $300 million to the state’s coffers via income taxes. If the team were to leave the state — the threat that loomed over negotiations for a new arena — that money in the state budget would have to be made up somewhere. State taxpayers would likely feel the brunt of the shortfall in one way or another.
Another $80 million of the arena’s total costs will be financed by reducing the state’s annual aid to Milwaukee County. So rather than raising taxes to pay for the arena, the county’s contribution is being financed by a spending cut. And that cut will likely be offset by a plan to have the state take over the collection of funds owed by delinquent Milwaukee County taxpayers. Call it the “deadbeat tax.”
More aid will go to finance bonds issued by the local entertainment district, which will be partly paid for by a combination of the per ticket user fee and existing hotel-room, rental-car, and food-and-beverage taxes levied by the district.
The remaining $47 million will come from the creation of a “tax incremental financing district.” Such TIF districts are typically funded with revenues generated by the locality itself. In this case, the city’s contribution is a new parking structure.
It’s also worth pointing out that the Bucks’ current owners and their former owner are ponying up $250 million of their own money to pay for the arena — so it isn’t as if they aren’t also personally invested in the project. Scott Walker isn’t just handing them a gift.
If one is naturally inclined to oppose any kind of governmental involvement in the building of arenas, that’s fine, as long as equal scorn is heaped on less publicized building plans. Last year, the state approved an $82 million chemistry lab at the University of Wisconsin–La Crosse. That plan seems unlikely to make its way into any discussion of Scott Walker’s presidential campaign. Every politician who stays in office long enough will eventually vote for some sort of multi-million-dollar construction project. Many of those projects won’t have nearly the economic impact of a new downtown arena that keeps an NBA franchise in town.
It’s much easier to accuse Walker of spending “$250 million in taxpayer money” than it is to explain the plan’s complicated funding mechanisms. And those mechanisms are certainly fair game for people who object to any sort of governmental aid whatsoever for the construction of sports arenas. But the fact is that without the new arena, Wisconsin taxpayers would be far worse off — and the Bucks wouldn’t be around to pick up any part of the tab.
Go home Scotty,and embrace your inner feminist side with Megyn Kelly, and talk about open borders.
So if this is such a great deal, why does the state have to finance it ? What about the ownership going to a bank ?
The “economic growth will pay for itself” argument is made for EVERY taxpayer funded stadium. And it rarely, if ever, turns out that way.
Trump doe snot hate Scott Walker. I’ve heard him say what a nice guy he is. Trump builds under cost - I think he had one project in Atlantic City that went into overruns, but that wasn’t his fault. Licenses were held up or something. I heard his audio from his book, but can’t remember the specific details. SO, don’t spread lies that he has cost overruns. He normally gets his projects done under cost and on TIME>
Walker: Why does Trump keep attacking me with debunked ‘Democrat talking points’?
And the facts about Wisconsin's economy.
Sports are a huge deal in WI. I think it will pay for itself.
If you want to comment intelligently, it’s best to read the article first.
What a pathetic apologia.
Some Dems voting for something doesn’t mean there’s not a Republican crony tie.
$500,000 a year from a share of a ‘user fee’will not pay for “a large chunk of the arena”.
Any business channels income taxes into a state, but any state doesn’t pay such a business a half billion of its cost of doing business.
Claiming that such a giveaway will be in part paid for by cuts in spending elsewhere is also bogus.
Likewise, collecting more taxes from deadbeats is not “paying for” the arena.
And again the same on taxes raised on local parking.
Comparing it with the state funding a chemistry lab could hardly be more lame as well.
The complexity of the funding mechanisms do nothing to explain away that raising taxes and taking out humongous bonds for an arena are indeed public payment for a private business.
Shame on NR for even putting “Taxpayer Funded” in quotes in the title.
You haven’t even read this article before posting.
Sport are a big deal everywhere, and again, these boondoggles rarely pay off.
You notice how fast NR puts out articles to defend the members of the GOPe. Yup, no bias there.
Exactly.
Hey, the state could buy me a house and just apply my taxes to the mortgage. See. I’m really paying for it myself. Yes, this is crony capitalism. If anything, the sport team owners should pay for the privilege of building the stadium to cover for the extra costs taxpayers will have to cover such as extra policing.
You have totally spun this to a place that is entirely off the wall and fictional.
Except that the NBA players have been paying that since the Bucks entered the league and I assume it's gone into the general revenue fund. So if suddenly more than half of it will now be devoted to paying for the Bucks stadium then I assume the Wisconsin taxpayers are on the hook for making up for where that money was spent before?
Anyway you look at it taxpayer are funding a big part of the arena and the Bucks owners are making out on the deal. At least when Kansas City renovated the Truman Sports Complex they put the issue to the taxpayers in a referendum. And the taxpayers approved the spending. Tney didn't have it shoved down their throat by the legislature.
Why are you supporting such twisted logic? Taxpayer money is being given away. Are you so in the tank for a GOPe candidate that you are blind?
When you have to go to such lengths to reword something, it is you who are twisting logic.
It’s taxpayer money. Period. Calling it offsets is merely a budget balancing magic trick. And while offsets often are real, even if they are ... it’s taxpayer money.
He wouldn’t be arguing “it would cost taxpayers more to lose them” (it wouldn’t) then keep them if he wasn’t using taxpayer money.
Taxpayer money for a billionaire’s sports arena? While I would vote for most of the GOP candidates (certainly not Jebby or Rubio) , I will never, ever vote for smarmy lap dog Walker.
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