Wisconsin Assembly Speaker Robin Vos has finally hinted at how he plans to pay for Milwaukee Brewers stadium upgrades in place of the $290 million from the state budget plus $70 million from a state stadium renovation fund that Gov. Tony Evers wants to spend, and it is thus:
GOP Assembly Speaker Robin Vos says it’s unlikely his caucus will back dedicating state money to the Milwaukee Brewers’ stadium beyond income and sales taxes already generated from the team being in Wisconsin…
He noted, for example, the $11 million annually in sales tax revenue generated by activity at the stadium as well as the $12 million in income taxes from players’ salaries, including those from visiting teams who play in American Family Field.
“Those are some numbers that we’re looking at to be able to make sure people understand if the Brewers leave, it’s not like it’s free,” Vos said. “There’s an economic impact to the state of Wisconsin.”
That’s not at all how economic impact calculations work, thanks to the fact that even if the Brewers were to leave Wisconsin, they wouldn’t take Brewers fans and their spending money with them, but no matter. Vos is drawing a hard line in the sand here — no cash for the Brewers owners like that spendthrift (checks party affiliation) Democrat governor, just good old taxes that will be reimbursed because these things are like an isosceles triangle, go ask Felix Unger. And how does kicking back sales taxes to the team owners — and income taxes, which aren’t even “back” to the team owners since they never paid them in the first place — add up? Let’s do some basic math:
- Vos’s proposed $23 million a year in tax rebates over 30 years, in present value = $353 million
- Evers’ proposed $360 million in upfront cash = $360 million
As I have noted here before, I am not an economist, but I am fairly confident those two figures differ by a very small amount. And both are very large numbers for a stadium that cost less than $400 million to build in the first place, especially when Brewers owner Mark Attanasio would only have to sign a 13-year lease extension to earn the boodle, after which he could still threaten to move out of Milwaukee and leave it bereft of all those hot dog sales taxes and outfielder payroll deductions. Anyway, thanks to the United States’ two-party system Wisconsinites have a choice between whether to spend $360 million or $353 million on the local sports team owners — well, not a choice, really, since they won’t be voting on it directly, the people they voted into office will be (spoiler: Vos will probably get his way, since he usually does), but it’s like a choice, except for the actual choosing part. Anyway, supporters of both parties will be able to argue that its nine-figure subsidy was and/or would have been better than the opposing parties’ one, this is fine.
Meanwhile here in Milwaukee some of our streets look like they belong in a third-world country they’re so horribly torn up and full of potholes. But sure, let’s give $400 million to the Brewers just because.
All the more reason to make the stadium shine so bright the citizens can’t see the potholes!
And don’t forget the added bonus
of being able to puff up their chests and shout ‘we’re major league!’
Milwaukee is a 3rd world country
What about the empty trophy case in the stadium ? How much money have we spent trying to get one?
So… a general question… what would a more proper calculation for actual ‘lost’ tax revenue be to the city or state?
I can see there being “some loss”, but it won’t be dollar for dollar.
A portion of the player income taxes go to the state. Perhaps a significant percentage of those will be kicked back to the city directly (whether attached to a construction project related to the ballclub or not), but that would be a state loss if anything.
As for the sales taxes at the stadium, well, there may be some ‘excess’ consumer spending over and above what would happen on entertainment anyway, just because the stadium/ballclub/merch shops/concessions are there. But it would not be possible for me to calculate how much would be distributed elsewhere and how much would be “lost”. And of that lost percentage, how much would just be lost by the city and district but would be spent elsewhere in the state (Elkhart Lake, Green Bay, etc) on recreation or entertainment.
How much of that might not be spent on recreation or entertainment but might be spent on home improvements restaurant meals or other things which might actually be taxed at a higher marginal rate?
Very hard to even guess for us laypeople… but would 50% loss of the $11m in ‘local’ sales taxes be reasonable?
So… the city and state might actually “lose” $14-17m in tax revenues annually if the Brewers skipped town. I would suggest that means that anything over $100m spent to retain that tax stream (over the long term, not just another 13 years…) is a waste of money.
Even at current interest rates, you could probably only fund $130m-150m or so in upgrades with that annual revenue. And tax increment financing is not supposed to be ‘revenue neutral’, after all.
Nobody has ever found any significantly measurable loss of sales tax dollars due to a team leaving town. I would say 10% of the headline figure is probably a reasonable guesstimate, maybe as high as 20% if you want to be really generous.
More of the income tax money is new to the state, if only because some of those player salaries are paid for with things like national TV money that don’t originate in Wisconsin. If the Brewers left, people could go buy Bucks tickets (and fund Bucks player salaries) with their entertainment dollars, but Sunday Night Baseball would take its ball and go home.
So let’s say 10% of sales taxes and 50% of income taxes — that would put you at about $7 million a year. But then, most companies don’t get to generate economic activity and not be taxed for it; just try going to the local tax department and saying, “My hot dog stand did $100,000 in business with out-of-towners this year, I would like the taxes back from that, please.” So realistically, the state should still get a cut of that as well.
All of which is to say: If Wisconsin were talking about putting $3 million a year into a Brewers stadium, which would pay off maybe $50 million in total costs, I don’t think too many economists would overly complain. Mark Attanasio sure would, though.
American Family Field (Miller Park) sits on a pretty juicy interchange on Interstate 94. Who’s to say a distribution center and light manufacturing wouldn’t generate a better return than a 90 date stadium and parking lot.
I say NO to giving any money to the stadium upgrade. Time for the owner to pony up his own money.
If only politicians thought that way…..
It’s too bad that the persons commenting on here think so little of baseball. Also, thinking losing a MLB baseball team in Wisconsin people will just go buy basketball instead. Must missed the history that makes BASEBALL America’s favorite pass time. You lose baseball, you’ll lose everything that made the city great back to the days of the Braves. But, hey let them move.
Lake Michigan is what makes Milwaukee great. Neither it, or the Brewers, are leaving anytime soon.
It’s not baseball people here think little of, it’s rich people demanding handouts from taxpayers and banking profits without having to carry their own expenses or take on any risk of losses.
Also, baseball hasn’t been America’s favorite pastime for decades, losing the Braves didn’t really do much to hurt the city, and the things that actually made Milwaukee great were the beer and dairy industries, the lake port, and relative proximity to Chicago.
Kyle, I love baseball!
I just don’t want to subsidize billionaires.
Also, people in Wisconsin could
attend minor league games…..
We should also note that Attanasio has not threatened to move the Brewers out of Milwaukee. And given that they’re usually around league average in attendance, he’d be kind of dumb to seriously do so. (Unseriously doing so is, of course, another thing.)
Why doesn’t milwaukee buy the brewers and stop letting these owners take advantage of its tax payers. If we can have a publicly owned football team why not baseball to?
Unfortunately, sports leagues won’t allow public ownership anymore, mostly because they don’t want anyone to see their books. When Joan Kroc owned the Padres, she actually tried to give the team to the city of San Diego, along with an operating fund, but MLB vetoed it.
I remember that!
What could have been.
Arguments in City Council
meetings over who should
start at shortstop LOL…..
Here’s a good reason for not giving corporate welfare to the Brewers: A party bus taking people home from the Morgan Wallen concert at American Family Field on Saturday night got caught in the middle of a gun battle. Nobody on the party bus was injured, but the windows were shot out and the operators say they will no longer do nighttime trips to Milwaukee. The story is all over the local news throughout Wisconsin.
How are Wisconsin politicians going to justify corporate welfare for a baseball park when concertgoers can’t make it home safely?
That was at the Fiserv, and that bus went the ghetto way home because he wanted to avoid traffic. But sure, blame the stadium they didn’t attend, and a route they didn’t drive.
Slightly off topic, but when discussing market size, and Milwaukee being one of the smallest, do economist take into account the effects of being so close to Chicago? There is quite a bit of overlap between the two. The Brewer’s stadium is convenient to Chicago’s northern suburbs. Is a city like Milwaukee better off being 90 minutes from Chicago than Cincinnati is being 90 minutes from Louisville? Or Kansas City being 90 minutes from Topeka?
It helps in attendance when they play the Cubs, but it doesn’t really mean much when it comes to market size/TV deals.
Back in the day I was a Braves fan. They left. I was left without my Wi. team. I became a Cardinals fan. Still am. I’ve been to a few milwaukee games through the Lions organization where I get a bus ride and food and drinks. I would never pay the price of a ticket and the outrageous prices they want for concessions. So no if the owners can afford the price to buy a baseball team they should be able to keep the funding to keep it operating.