Still no state legislative hearings on the Milwaukee Bucks arena bill, but lots of other news, or at least stuff to fill up the newspaper and interwebs with:
- Milwaukee County Executive Chris Abele has been integral to the revised arena funding plan, and lots of people like him for it, and lots of others don’t! Also, Abele is “a longtime Bucks season-ticket holder with prominent courtside seats”!
- Gov. Scott Walker says using tax money to fund the Bucks arena is a “good deal” and “not a new tax”! And “we would lose $419 million over the next 20 years if we did nothing”! (Editor’s note: Yeah, no, not really. No matter what those nifty Excel charts say.)
- The people who want to expand Milwaukee’s convention center are upset that spending tax revenue that would otherwise go to them on a Bucks arena instead will make it impossible to expand the convention center! Which is “something we desperately need”! (Editor’s note: Yeah, no, not really.)
In short, lots of posturing, very little actual analysis. The most interesting point that could be raised about the Bucks case is that since they rely on national league revenue for their expenses way more than most NBA teams — something raised by a commenter here — a good chunk of the income tax money that Wisconsin collects as a result of the team being there is in effect paid by the rest of the league, not by Wisconsin residents. That means that if the Bucks were to leave, the state would actually lose that money, not see it recirculated into other local activities.
Now, saying that Wisconsin has more reason to subsidize the Bucks to stay than other cities might doesn’t tell us anything about whether $300 million in subsidies would be worth it. Last time I asked an economist about this issue, he estimated that about 27% of the Bucks’ income taxes came from NBA revenue sharing. Given that Walker’s own claims (and nifty Excel charts) say that the state would get three dollars in profit on every dollar in spending, multiplying that by 27% would leave about a 19-cent loss on each state dollar spent. That could be covered by money spent by out-of-towners on Bucks tickets that otherwise wouldn’t get spent — the substitution effect isn’t 100%, after all — but even then, we’re just talking about making the state whole on its $55 million in spending, and there’s another $245 million in county and city money to be accounted for.
In short: $300 million is a lot of money, and it’s pretty much inconceivable that the Bucks are worth that much in actual revenue to Milwaukee taxpayers. Walker, Abele, and all the other pols who put their heads together on this one may have just crafted a plan that doesn’t hit state taxpayers too hard, though, which could be just what’s needed to get through the state legislature.