Milwaukee Mayor Tom Barrett met with Milwaukee Journal Sentinel reporters and editors yesterday, and the paper’s Don Walker has written up a fairly confusing report on the mayor’s sales pitch for a new Bucks arena. (In particular, he compares the back-and-forth over arena funding to both “a tetherball game” and “a dating relationship,” neither of which seems very appropriate, let alone enlightening.) It’s hard to blame Walker entirely for this one, though — aside from running yet another article that almost entirely consists of quotes from a pro-subsidy official — since Barrett’s explanation of how he wants the city to aid the Bucks is lacking a bit in the logic department:
Barrett has said the city’s contribution will not come from increased property taxes.
Instead, he told editors and reporters, the city’s contribution could come in creating tax-incremental financing districts that would benefit the anticipated ancillary development the Bucks’ owners say will be part of a larger development.
A new arena, Barrett noted, does benefit the city but not in terms of tax revenue; no property taxes will be collected from the arena. The real beneficiary, he said, is the state, which will capture the income and sales taxes generated in the arena.
Um, not quite. A basic principle of economic development is that the bigger you draw the circle around a project, the smaller the impact, because more and more of the spending is just diverted from other places. (The Bucks draw some people from outside Milwaukee to spend their money inside the city, but how many people come from outside Wisconsin?) So yes, the Bucks’ sales and income taxes go to the state, but a large chunk of that would go to the state even if Wisconsinites had to go spend their entertainment dollars on something else.
Secondly, a tax-increment district wouldn’t “benefit the anticipated ancillary development” — it would take property taxes paid by the ancillary development and redirect it to pay for the arena. (The city can’t redirect property taxes paid by the arena because it’s already going to be doing that, to the tune of about $180 million.) [UPDATE: Barrett says elsewhere that he’d be counting any TIF subsidies as going toward the ancillary development, but this is pretty much semantics, since it would all be going into the same pockets.]
This is why it’d be nice for newspaper writers like Walker to either attempt their own analysis of public officials’ claims, or find independent experts who can say whether they pass the smell test. When journalism just consists of writing down whatever the mayor says, it’s less tetherball than Calvinball.
Neil’s throwing fastballs this morning!
Strike one!