Milwaukee residents continue to berate Bucks arena deal at latest public hearing

The Milwaukee city council held its first public committee hearing on the Milwaukee Bucks arena plan yesterday, and as at the council’s previous public town hall meetings, there was lots of unhappiness at the already-approved-by-the-state-but-not-yet-the-city deal:

“Buck owners Mark Lasry, Wesley Edens and Jamie Dinan are New York billionaire hedge-fund owners who have the resources to build this arena themselves,” Jennifer O’Hear, speaking for Common Ground, told members of the Common Council’s Steering & Rules Committee.

“They do not need our public money,” she said. “Our children and our neighborhoods need our public money.”

Okay, that’s Common Ground, which has been harping on this whole “schoolkids need more money than billionaires” thing for a while now. (Come on, what do schoolkids have to spend money on? It’s not like they could even drive a yacht if they had one!) What about the hoi polloi, the average Joe, the person on the street?

One speaker after another panned the idea.

“It’s trickle-down economics,” Mary Watkins said. “We are hurting. We cannot afford to put millions of dollars in a project billionaires can build on their own.”

Several speakers said they were opposed to the entertainment district, which they thought would cannibalize existing bars and taverns.

“I have long accepted that the ship has sailed and the arena will be built,” Pat Small testified.

“Downtown has no shortage of bars and restaurants,” he said. There is “no need to subsidize the entertainment district.”

Peter Rickman, of Wisconsin Jobs Now, told council members: “Milwaukee has a good jobs problem.”

He urged council members to hold the Bucks accountable for living wages and for workers’ rights, both during the construction of the arena and its facilities, and once those facilities were built and staffed with waiters, janitors and housekeepers.

On the other hand, according to the Milwaukee Journal Sentinel, “business and labor leaders” said the arena would be a “catalytic project,” presumably by means of something like this. The full council is expected to vote on the plan on September 22, at which point we’ll find out whose opinions they listen to.

Scott Walker goes on TV, tries to justify building all sorts of crazy things

Wisconsin Gov. Scott Walker went on Meet the Press yesterday, and they actually asked him about the Milwaukee Bucks arena subsidy deal that he pushed through. His answer was unsurprising:

“For the state of Wisconsin, it’s less than $4 million a year to protect $6.5 million we collect. And over the next 20 years, that grows to a total of just shy of $300 million the state collects in income taxes for less than $80 million,” he said. “I’d be a fool.”

This is the “cheaper to keep it” line again, and we’ve covered the problems with it before: First off, that $300 million figure for future state income taxes is made up out of whole cloth, and almost certainly hugely overblown. And secondly, the $80 million (I have $75 million, but whatever) in state subsidies is only a small fraction of the $450 million in state, county, and city cash and tax breaks that will be going to the Bucks owners, meaning even by Walker’s numbers, Wisconsin taxpayers overall would be taking a large loss on the deal, even if the state treasury in particular might come out okay.

Fortunately for Walker, he distracted voters from his crazy-ass arena math by elsewhere in the interview calling building a wall across the Canadian border “a legitimate issue for us to look at.” To be entirely fair, Walker was just agreeing with Meet the Press host Chuck Todd’s question that “Why are we always talking about the southern border, and building a fence there — we don’t talk about the northern border?” Though to be even more fair, saying things that are no more crazy than Chuck Todd isn’t exactly something worth bragging about.

Now that Scott Walker has okayed Bucks subsidies, Milwaukee residents get to say they hate them

Scott Walker may have signed the state portion of the Milwaukee Bucks arena funding bill, but the Milwaukee city council still needs to sign off on it too. And unlike the state’s round of discussion, which mostly consisted of lots of top officials gathering behind closed doors, the city seems determined to have more public hearings, which means Milwaukee residents can express how pleased they are that there’s a deal to keep their beloved NBA team in town:

“I can’t even afford to go to a Bucks game,” said Cherri Hampton, who lives near N. 20th St. and W. Capitol Drive, well north of the proposed arena site. “I think my money should go to the Milwaukee Police Department so they can protect my neighborhood.”

“We’re looking to cut education, but we come up with money to buy an arena for millionaires. It doesn’t add up to me as a regular citizen,” said Gilbert Johnson, lives near 30th and Michigan.

Feel the excitement!

Alderperson Milele Coggs told the crowd that the deal is “not done” and “I have not made up my mind”; it’s unlikely that the council will try to make significant changes at this point, regardless of what their constituents say, but unlikely isn’t quite impossible. A final vote is expected on September 22.

 

Scott Walker to sign Bucks subsidy bill, still hates public spending except when it’s for NBA arenas

Normally once an arena subsidy is approved, everybody stops paying attention until construction is actually underway and everyone can ooh and ahh about all the exciting glass planes and cupholders and what have you. Not, though, when it involves a Republican presidential candidate — and with pretty much the entire U.S. population having announced as a Republican presidential candidate, what doesn’t involve one of them?

And so we have the weekly parade of “Scott Walker is still a hypocrite about public spending” articles:

Tomorrow, Scott Walker will stand on a stage at State Fair Park in Milwaukee, Wisconsin, and betray virtually every conservative economic principle there is by handing out up to $450 million in taxpayer money to wealthy sports owners to pay for private infrastructure at a time when public infrastructure is crumbling.

And:

Governor Scott Walker’s fiscal conservatism will collide with the reality of sports-team subsidies tomorrow when he commits Wisconsin taxpayers to pay $400 million for a new basketball arena.

At Wednesday’s signing, the Republican presidential candidate’s message of being a tightfisted taxpayer champion will be weighed against public costs spread over 20 years.

All true enough, though it’s worth noting that being a self-proclaimed “tightfisted taxpayer champion” has never been a roadblock to approving spending on things that conservatives like.

Mostly, I’m excited that the Salon piece above actually accounts for the roughly $200 million in property tax breaks that the Bucks will be getting as part of the deal, instead of taking the official party line that it’s “$250 million in public money” as gospel. (Salon actually links to Field of Schemes as its source, which is fine, but I’d be happy however they calculated it so long as they included tax expenditures too.) Maybe, just maybe, we’re moving toward a time when the news media try to figure out the total costs of deals and report them that way, rather than take team owners and their political allies at their word. Wisconsin taxpayers would still be out $450 million, of course, but at least they’d have a better sense how much lighter their wallets were.

Scott Walker says giving Bucks $450m in tax money is “protecting taxpayers,” words have no meaning now

Wisconsin Gov. Scott Walker is set to sign the Bucks arena bill today, and he couldn’t resist a defense of how giving around $450 million in state, county, and city subsidies and tax breaks to the Bucks owners was an offer too good for him to refuse:

“It’s critical not only for those who love sports, but the main reason I got into it was because it protected state revenues,” Walker said last week, citing the income taxes Wisconsin would lose if the team leaves the state. “That just creates a big hole for everything else. …This was really about protecting the taxpayers of the state.”

We’ve heard this before, of course — it’s the basis of Walker’s whole “cheaper to keep them” p.r. campaign — and I’ve debunked it at length for Vice Sports, if you care to hear all the reasons why it’s crazy. (Though given that Walker managed to fob off most of the Bucks arena costs onto the city and county, he could maybe make a case that he did protect state taxpayers, if by state taxpayers you mean only those who don’t live in Milwaukee County.) For now, though, just enjoy the simple pleasure of one of the most dedicated foes of government spending on anything defending $450 million on a private basketball arena as “protecting the taxpayers.” And then watch Tom Ziller‘s head rightfully explode with outrage.

Wisconsin assembly decides it’s too hot to change Bucks arena bill, votes it in without debate

As expected, the Wisconsin state assembly easily passed the Milwaukee Bucks arena bill yesterday, 52-34; as slightly less expected, it didn’t make even insignificant changes to the language, or debate it in the slightest, just straight-up voting on what the state senate passed last week:

“I’m ready to go home,” [Rep. Dean] Knudson said. “We’re here in the summer. It wasn’t going to change anything.”

The arena deal now heads to Gov. Scott Walker, who will certainly sign it, though there’s some calls for him to veto the part of the bill that will direct part of a ticket tax to the state instead of the state-run arena district, which has to be the least interesting amendment possible to the deal unless you work in the arena district budget office. Next up would be Milwaukee’s city council, which is headed by that opposition leader from The Thick of It, and which isn’t expected to throw up any significant roadblocks either. It won’t vote until September, though, so expect lots more public squabbles in the interim over things that don’t really matter and don’t ultimately change anything, because that’s what elected officials do when they want to seem important but don’t want to rock any boats.

Wisconsin assembly Democrats will only vote for Bucks deal if it doesn’t get more awful than it is already

The leader of Wisconsin’s state assembly Democrats says they won’t provide the votes necessary to pass a Milwaukee Bucks arena deal without “six or seven amendments” to the plan the state senate approved last week. And what does Assembly Minority Leader Peter Barca want to see?

“By and large, one thing that’s important is making sure that 30 years from now when the Bucks come around and want a new arena again that we’re in much better shape for the taxpayers,” he said. “That we’re not in the same boat (as) now where we have to put millions of dollars just to keep the Bradley Center operating because it needs significant maintenance.

“Additionally, we want to make sure that we have the best arrangement for the greater Milwaukee area for workers and for having jobs that are meaningful that I think the Bucks share in.”

Item #2 is clearly some kind of local hiring agreement, which the Bucks’ billionaire owners should be happy enough to agree to, since it’s no skin off their nose who actually builds the thing, so long as it’s mostly the public that’s paying the bills. The first one is a bit more unclear — some kind of clause ensuring that the team is on the hook for maintenance and upgrades on a new arena, maybe? — but is certainly worth trying to address, given that the Bucks’ actual lease on this new arena is still yet to be determined, which could hide an awful lot of subsidies down the road.
And speaking of hidden subsidies, Bruce Murphy of Urban Milwaukee has taken another shot at totaling up all the public subsidies involved in the Bucks deal, and come up with this list:

  • $195 million in Wisconsin Center District costs (including interest), less $45 million in accrued ticket taxes, for a total of $150 million. Murphy doesn’t convert that into present value, but it would come to about $70 million.
  • $55 million from the state (against translating Murphy’s numbers into present value) in arena bonds, plus $20 million to pay off existing Bradley Center debt.
  • $55 million from the county for arena bonds.
  • $48.5 million from the city.
  • $180 million in present value in property tax breaks on the arena.
  • $50 million in savings from federal tax exemption on arena bonds.
  • $17 million in sales tax exemption on construction materials.
  • A bunch of “miscellaneous,” including continuing to exempt the Bucks from the state’s 7.9% corporate income tax, just because.

That’s at least $505.5 million in public subsidies, or just about exactly the total cost of building the arena. (Actually slightly less if you want to be technical, since the federal tax-exempt bonds really reduce the arena cost, so without those it would be a $550 million arena.) You can quibble over the details of the math, but the public — including taxpayers in Milwaukee, in the state of Wisconsin, and even in the rest of the U.S. — would be paying for the vast majority of a new Bucks arena, to replace one that is less than 30 years old. With a deal like that, here’s hoping the state assembly Democrats do actually put a little effort into making sure that it doesn’t get even worse once the lease is decided on.

Wisconsin pol says garnish wages of poor debtors to fund Bucks arena, because hell with those people

So remember how the state of Wisconsin proposed to help fund a Milwaukee Bucks arena by having the state go after $4 million a year in uncollected Milwaukee County tax debts, then it turned out this mostly meant shaking down poor people for money, then some senate Democrats complained that this would make them look bad, so the senate decided to leave it up to the county where to come up with the money? Well, now the arena bill has moved to the assembly, where at least one member thinks that garnishing the wages of the poor isn’t such a bad idea after all:

Republican Joe Sanfelippo (R-West Allis) says the remaining options are no better.

“It ties their hands and you’re left with two options: you either cut services or you raise property taxes countywide,” said Sanfelippo.

Sanfelippo says he will ask his party’s leaders to put the debt collection plan back into the bill.

“What we’re talking about primarily are people who willfully, knowingly, and purposefully just won’t pay their bills because they know they can get away with it,” said Sanfelippo.

Sanfelippo isn’t wrong that if you demand $4 million in county money for the Bucks, then the county needs to come up with $4 million somehow — though it’s worth noting that cracking down on debt collection would still be one option. (Not necessarily an option that would work, mind you, but an option.) And putting the debt collection plan back in the bill would likely cost Democratic votes, if not in the assembly then back in the senate, which would still need to sign off on a revised bill. So it’s probably a fair bet that the final plan will remain “punt it to the county with a $4 million a year invoice, let them figure it out,” but we’ll know more once the assembly votes next Tuesday.

Bucks co-owner is now Scott Walker’s fundraising chair, what a funny coincidence!

From the “now you tell us” department, the International Business Times’ David Sirota and Andrew Perez reported on Friday, two days after the Wisconsin state senate approved a $450 million arena subsidy for the Milwaukee Bucks, that Gov. Scott Walker’s presidential fundraising chief is in line to directly profit from the deal:

Real estate mogul Jon Hammes, who has donated hundreds of thousands of dollars to Republican candidates and causes, is a prominent member of the investor group that owns Milwaukee’s NBA team. Last week CNN reported that he also will serve as the Walker campaign’s national finance co-chairman. Days after that appointment, Walker’s Republican allies in the Wisconsin state Senate backed the governor’s proposal to spend public funds on a new arena for the Bucks.

Awkward!

Walker’s office replied that Hammes wasn’t part of Walker’s team when Walker proposed the Bucks deal, though IBT notes that he was already a major Walker donor. A Walker spokesperson also defended the plan by saying it “protects taxpayers from the loss of $299 million if a new stadium is not built and the NBA moves the Milwaukee Bucks to another state,” a piece of terrible math that I debunked for Vice Sports on Thursday.

There’s still a chance that the state assembly could vote this whole mess down, but with state Republican and Democratic leaders now both on board, that doesn’t seem likely to happen. On big-money issues, red and blue typically matter a whole lot less than green.

Wisconsin senate votes to pay $450m toward Bucks’ $500m arena, claims this is a bargain, is on crack

Well, they done did it: The Wisconsin state senate voted yesterday by a surprisingly hefty 21-10 margin to approve state, county, and city funding for a new Milwaukee Bucks arena, to replace the 27-year-old Bradley Center. A flurry of last-minute negotiations resulted in Democratic lawmakers getting a handful of changes to the deal in exchange for their votes:

  • Instead of requiring Milwaukee County to let the state collect some of its citizens’ unpaid tax debts and use $4 million a year of that for the arena, the state will now just cut its funding to the county by $4 million, and let the county figure out how to pay for it. This would improve the “optics” of the county portion of the funding, as Democratic state senator Chris Larson said the day before — in other words, the state won’t have to be responsible for shaking down poor people to help pay for a pair of billionaires’ new NBA arena — but it doesn’t change the actual county subsidy amount at all. In fact, the county could still end up paying for its share by having the state collect on its debts — it’d just be the county’s decision, not the state’s.
  • Took the ticket tax on events at the Bradley Center — currently $2 on tickets over $12, $1.50 on cheaper tickets — and raised it to a flat $2 per ticket, 50 cents of which would go to the state to repay its costs. That’s actually less money going to the Wisconsin Center District than previously, though more to the state.

The previous estimate for total public cost of this deal was $457 million: $55 million in state bonds, $55 million from the county, $93 million diverted from the WCD, $20 million to pay off state debt on the Bradley Center, $54 million in city costs for garages and other infrastructure, and $180 million in city property tax breaks. The only change to that in the revised deal — aside from exactly how the money would be provided — is an additional 50 cent charge on tickets under $12, which, given that the entire ticket tax only brings in $1.5 million a year, is going to over time knock at most a million dollars off that $457 million bill. Tough negotiating, Wisconsin Democrats!

In exchange, of course, Milwaukee will get to keep the Bucks — and as Democratic senator Lena Taylor argued yesterday, “the Bucks are big bucks for the state of Wisconsin.” I’ve spelled out before why the “cheaper to keep them” line is bogus — and I have a piece going up at Vice Sports later this morning that explores this in greater detail — so there’s no possible way Wisconsin taxpayers are going to earn back $457 million in value from the presence of the Bucks, especially not when the team will get 100% of all revenues from the new arena. The economically sensible move would have been to call the Bucks owners’ bluff and see if they truly walked — or, at least, to offer them a significantly less lucrative handout and see if they’d accept it.

Instead, as is so often the case, the only true negotiations were between different levels of government about who will get stuck with the tab. It’s a disappointing ending (well, not really an ending since the state assembly and city council still have to vote, but those are considered done deals), especially coming on the heels of several mayors pushing back on sports subsidies, not to mention John Oliver’s “Make them pay!” movement (it must be a movement, it has its own hashtag!). But at least Bucks fans will be happy, if poorer. And hey, the world needs cautionary tales too, right?