Clearly the Milwaukee Bucks arena campaign, facing both popular and legislative opposition, has hit the throwing-stuff-at-the-wall-to-see-what-sticks phase. Today’s projectile of choice: the “jock tax”!
[Wisconsin Gov. Scott] Walker, in a Friday interview with the Business Journal, said his staff is studying the possibility of tapping income taxes from NBA players and other tax revenue directly generated by Milwaukee Bucks games to possibly pay for a new arena. The income tax already is paid by Bucks players for games in Milwaukee and visiting team players.
The Milwaukee Business Journal’s Rich Kirchen — yes, that Rich Kirchen — goes on to report that state income taxes on NBA players in Milwaukee currently raises between $8 and 10 million per year. The average NBA team spends about $70 million on player payroll, and the top Wisconsin tax rate is 7.65%, so that … makes no sense, actually? The state can tax visiting teams as well, but then Bucks players can also deduct other states’ jock taxes from their Wisconsin tax bill, so this seems a bit optimistic to me.
And regardless, this is revenue that Wisconsin is currently collecting, so it’s hardly free money. (Yes, it’s money that the state won’t collect if the Bucks move elsewhere, but then sports fans would just spend their entertainment dollars on something else, and employees of that something else would make more money and pay more income taxes, and so on, and so on.) So it’s really just a way of totaling up all the money that the state could credit to the Bucks, then rebating them by writing them a check equal to that amount. Except the players would still be paying the taxes, while the team owners would be getting the check. Nice work if you can get it.
And this would only be enough to raise perhaps $100 million, and the Bucks arena is still $250 million shy of the funding needed to build it. So the rest would be filled in, perhaps, by sales taxes paid at the arena — and suddenly we’re back to the “super TIF” proposed by Sheehy back in April, but which Kirchen is apparently pouring into new bottles and hoping no one notices.
Which brings us to this, at the very end of the article:
The advantage of earmarking for debt payments NBA-player income tax and sales tax from Bucks home games is that the proceeds likely will increase in future years, [Milwaukee chamber of commerce president Tim] Sheehy said. NBA salaries continue to increase and, assuming the Bucks on-court record and attendance improve, sales tax on merchandise, concessions and ticket sales also should increase, he said.
Or, looked at another way, the amount of future revenues that the state would be handing over to the Bucks owners would go on rising inexorably year after year. Damn, sorry about that — I must have missed my shipment of Milwaukee Business Journal rose-colored reading glasses.