We now have a bill — somewhere, I can’t actually find it on the Wisconsin Senate or Assembly websites — and some further details of the proposed Milwaukee Brewers stadium subsidy that was first leaked yesterday. Per the Associated Press:
Under the proposal, the state would give the team $60.8 million next fiscal year and up to $20 million each year after that through 2045-46. The city of Milwaukee would contribute a total of $202 million and Milwaukee County would kick in $135 million by 2050.
This lets us do some real math that we couldn’t based on yesterday’s story:
- $60.8 million right away plus $20 million a year for 22 years comes to $324 million in present value from the state.
- $202 million spread over 27 years comes to $110 million in present value from the city.
- $135 million spread over 27 years comes to $73 million in present value from the county.
That’s $507 million, roughly, worth of public money that would be going toward spiffing up the Brewers’ 22-year-old stadium, or pretty close to the $520 million estimated yesterday. Brewers owner Mark Attanasio, meanwhile, would commit to putting in $100 million — whether in present dollars or over time, nobody’s saying — and promise to keep the team through 2050 in Milwaukee, which the AP makes sure to note is baseball’s “smallest market,” something that’s true only until the Oakland A’s move to Las Vegas.
Handing over half a billion dollars to the local rich sports dude just to keep him from moving to an unspecified city he hasn’t even threatened to move to is always going to be a tough sell, so how did state legislators try to sell it?
Wisconsin Rep. Robert Brooks, R-Saukville, said the Brewers would need to stay in Milwaukee until at least 2050 under the proposal. The majority of state funds would come from income taxes from Brewers players and employees, as well as from visiting players.
“Our deal raises no taxes,” Brooks said.
Oh, jeez, this again. We’ve recently seen Oklahoma City Mayor David Holt try one evasive maneuver to claim that imposing a new tax that replaces an expiring old tax of the same size isn’t a tax increase; now we’re getting the corollary, which is that it’s not raising taxes if you’re using taxes that would be collected anyway. The argument here is that without the Brewers, there would be no MLB money being paid to players, who wouldn’t pay state income taxes, so really this is free money that we may as well give back to the team.
This is the Casino Night Fallacy, just as it was when then-Gov. Scott Walker tried the same gambit to explain away the $220 million he was giving to the Milwaukee Bucks owners for their new arena. And just as then, the whole argument falls apart when you take into account that a lot of the money going into the pockets of Milwaukee athletes would go into the pockets of Milwaukee waiters or movie theater projectionists or bowling alley pin washers if the teams weren’t there.
More to come once we have actual bill language to look at, not to mention once it’s clear whether the county and city will have to approve the plan. (Both county and city officials have already begun lambasting the stadium funding proposal, which is no doubt partly because they don’t like being stuck with $183 million in costs and partly because they’re Democrats and the state legislative leadership is Republican.) But it is clear that we have yet another half-billion-dollar-plus MLB subsidy plan in the works, to go along with the Las Vegas A’s and Baltimore Orioles and Tampa Bay Rays and likely the Kansas City Royals. It’s a good time to be a rich dude with a baseball team and an “I ❤ Nashville” pin.
We had this conversation about the Vikings stadium deal. If all the money spent on Vikings game was spent on dinners in Minneapolis I recall the added payroll for waiters would have amounted something like $5-6 million, which is the equivalent to the salary of a backup QB. Sure it would be spread out to more people than the 53 people on the Vikings roster, but they would be people at the lowest tax rate whereas athletes are at the highest tax bracket.
It doesn’t all go to the waiters though. It goes to increases in business for commercial real estate companies, temporary/casual employees, food and equipment suppliers, restaurant owners, trucking companies etc. Most of it stays in the community (that’s the main difference between giving money to wealthy people and giving money to poor or low income people – the latter groups spend nearly all of it locally. The others tend to use it to stimulate the Swiss or Italian economies).
Instead it will go to a sports team, most of the highest paid employees of which are only going to pay tax in the district on half their income (though visiting teams will pay as well) and often don’t live in the district year round (ditto team owners).
If you really want to see the multiplication effect work, funnel the money to low income individuals and small businesses and not billionaire sports cartel owners (or the Southeastern Wisconsin Bentley Dealers Association).
You’re also assuming that 100% of the money spent on Vikings football would be spent locally. People from Minnesota could be spending the money on vacations. Or people who travel to Minnesota for a football game would travel elsewhere. Whatever money that stays within Minnesota would be spread out. Its not not like everyone would be going out to dinner/movies/Dave and Busters/etc. at the same time. It would be spread out over the year so even the actual number of restaurant/movie theater/whatever workers being hired is probably overblown.
Secondly, I only mentioned the taxes on the players salaries. If you want to talk about the lower paid staff, there are approximately 3K people who work at US Bank Stadium on event day. All the other stuff you mentioned also exists to support stadium events.
Again my comment is just about payroll taxes. You won’t replace the payroll taxes from the team with restaurant staff.
The way to test this would be to look at cities that have lost teams to see if tax receipts went way down, or cities that gained teams to see if they went way up. Those studies have been done, and the change in tax revenues is so small as to be invisible.
Other than St Louis who got several hundred million from the Rams has any city taken been better off because it lost a team? Like has anyone said “phew glad we have them out of here we have so much more money for schools and roads!”
Portland seems pretty happy not to have built an NFL stadium in the 1970s, for one.
Yeah nice pivot. That’s not the same thing. Who has lost a team and had it rain prosperity as a result? Is Quebec City better off for the Nordiques leaving? Is Oakland making it rain without the Raiders and Warriors?
A team leaving isn’t going to improve the economy by itself, no. But, to pick an example, Seattle is better off without the Sonics than it would have been with them and several hundred thousand dollars in arena debt.
When Seattle lost the Sonics, the going rate for an arena was around $500 million. If the city had contributed $300 million the debt service would have been about $20 million in debt service. Seattle had like a $600 million surplus last year. You think its because they didn’t have that $20 million in debt service?
$20 million a year over 15 years is $300 million, so at least half of it is because they didn’t build an arena, yes.
(More likely, Seattle would have spent at least some of that $20 million a year on something else. But then it would have $300 million worth of something else that it doesn’t have now, like teachers or new roads or monorails or space elevators.)
The area around US Bank Stadium has barely changed since the Metrodome was there. The main difference in the area is now an angular black hulk sits empty 350 days a year instead of a white elephant.
At its peak, the Metrodome also hosted the Twins and Golden Gophers. So it was in use roughly 100 days a year and was closer to 150 if you throw in the few years the Timberwolves played there.
US Bank will never come anywhere near thar number.
Metrodome came in under budget, and was a truly great multipurpose facility. While US Bank has a baseball configuration to allow regional college teams to play a a full schedule- it will never be the cost efficient, incredibly useful facility that the HHH Metrodome was