Wisconsin agency says Gov. Walker’s $220m “jock tax” for Bucks could cost state lots more

I’ve previously criticized the Milwaukee Business Journal’s Rich Kirchen for being overly credulous on the Bucks‘ arena, but today he reports on some news that’s not so positive for the team’s plans:

Wisconsin Gov. Scott Walker‘s proposal for the state to issue $220 million in bonds for a new arena in downtown Milwaukee could carry an actual cost of at least $380 million including interest, according to a preliminary estimate by the nonpartisan Legislative Fiscal Bureau.

Note that “including interest,” though. Is this just a case of misunderstanding the difference between present value (what a purchase costs you in today’s dollars) and nominal cost (what it costs you if you added up all your payments over time, like if you buy a $200,000 house and pay it off with $400,000 worth of mortgage payments over 30 years)? Or is it an actual case of the cost being higher than at first projected, like when it turned out that the Miami Marlins stadium included so many backloaded balloon payments that it was costing taxpayers an extra $450 million?

A little of each, it looks like. Since Gov. Walker’s plan relies on kicking back future income taxes from NBA player salaries, and NBA player salaries aren’t expected to soar into the necessary stratosphere for a while yet, the state probably would have to backload payments, which would increase the cost of the bonds beyond $220 million. How much, no one knows yet — Legislative Fiscal Bureau analyst Al Runde didn’t say — nor did he say how much additional the state could be on the hook for maintenance costs on an arena, something that has yet to be negotiated. Let’s just leave it at “a lot” for now, then.