Courtesy of the Milwaukee Journal-Sentinel’s new tag-team coverage, we now have more details of the latest Bucks arena funding plan:
- $55 million in state bonds (paid off $4 million a year over 20 years), presumably to be justified as coming from future state income taxes on NBA players, though it seems like everyone is just calling it “state money” now, which it is.
- $20 million from the state to pay off the remaining bond debt on the Bradley Center.
- $93 million from the Wisconsin Center District, to be drawn from various county taxes that currently go to fund the district’s other expenses.
- Another $55 million “certified” by the county but to be paid by the state out of (unspecified) debts that currently aren’t being collected but will be in the future, maybe.
- $35 million from the city for a new parking garage, plus $12 million in property tax kickbacks on new development around the arena.
That comes to $270 million, if I’m counting correctly, split between the state, county, and city in a way that’s pretty much impossible to determine the shares right now, since who knows whether that $55 million in future uncollected debts will ever materialize, or who’ll pay for the shortfall if it doesn’t. Oh, and still no decision on who’ll pay for cost overruns (or operating losses, though the J-S doesn’t get into that), but the article does provide this priceless quote:
“Everybody involved — except the owners — says it’s got to be the team,” said a source familiar with the talks.
All in all, this is looking a classic of the “pick all the low-hanging fruit and add in a bunch of stuff you’re just guessing at” school of arena finance: You have a pile of things that could be vaguely justified as “basketball-related” if you squint (tourism spending, NBA player taxes), but which however you slice it would end up blowing a $270 million hole in government budgets that would have to either be filled somehow or end up leading to cuts in other areas.
Whether this tactic will work, we won’t know until after this whole mess lands on legislators’ desks, likely sometime tomorrow. It definitely seems like the most likely successful strategy from a political standpoint; whether it makes any sense in terms of economics is another question, and one that hopefully will be discussed fully in the next couple of weeks in legislative debate, but I’m not exactly holding my breath.