I guess Gov. Scott Walker won't ask the owners of the Milwaukee Bucks to be drug tested before he gives them a $220 million taxpayer handout, but we might want to check out the governor to learn what he's been smoking.
For a guy who has impeccable, if galling, political instincts, Walker's proposal to use state taxpayer-supported borrowing to pay for a large portion of the Bucks' new arena is just a flat-out horrible idea from both a policy and a political perspective.
I suppose there's some sort of civic pride in having a professional franchise, but the public is justifiably squeamish about handing over its hard-earned tax dollars to billionaire owners and millionaire players. Remember that the Wisconsin State Senate flipped to Democratic control amid public outrage following the Republicans' vote for taxpayer subsidies for a new Brewers stadium in the late 1990s. And even a referendum on a local sales tax to support improvements to the beloved Lambeau Field passed with a less than overwhelming vote when it was proposed in 2000. That tax remains less than popular today, even though the renovation's supporters claim it was more than a success.
Walkers' argument that the borrowing for the Bucks' new arena will be supported by revenues produced by team salaries and other income is just a mirage. He's not proposing any new tax on players' salaries or owners' profits. The money to pay back the borrowing will come from the state general fund, and so it's taking away dollars that might otherwise go to support schools, parks, property tax relief and everything else that is paid for from general tax revenues.
Walker's deal would also require the city and county of Milwaukee to come up with $50 million in property tax revenues to support the project. Again, this is money that might go to other necessary services, in this case police and fire protection, transit, social programs or a myriad of other things that are a whole lot more important to most people than a new arena.
Moreover, the principle behind this idea is unsupportable. If we buy into this ruse, what happens when the next big company threatens to leave the state? Will we have to take all the estimated tax revenue from Oscar Mayer or Lands' End or Epic employees and give it back to the company or its parent owner? You can bet that once the principle has been established other demands will flood in.
General taxes, like sales and income taxes, are used to fund general services that benefit everyone. A good public school system, parks, social services and other programs including the UW System, which Gov. Walker would cut by $300 million, form the basic civic structure in which professional sports teams and other businesses can flourish. I'm not a big supporter of special "economic development" programs of any kind and especially not direct subsidies like this.
Moreover, there is little evidence that professional sports teams provide economic development. Dollars spent on sports would be spent on some other form of entertainment or product if the team were not there.
And, back to the politics of the proposal, the Bucks are easily the least popular professional team in the state, nowhere near as popular as the Brewers or the Packers -- even after the unspeakable events for the Brewers in September or for the Packers in Seattle last month. It seems like the entire endless NBA regular season is played just to eliminate the Milwaukee Bucks from the playoffs. Virtually every other team makes it, and the second season drags on until almost the Fourth of July.
Still, if it really is a priority to save the Milwaukee Bucks, there is a fairer way to do it. In a piece in the Milwaukee Journal-Sentinel last September, emeritus UW-Milwaukee economics professor William Holahan and retired business school professor Charles Kroncke proposed a plan where taxpayers could get in on the upside of the investment.
Here's the basic problem. When taxpayers anywhere are urged to fund an arena they're being asked to pony up for a depreciating asset. The new building will be worth less every year until, like Milwaukee's Bradley Center, it is worth pretty much nothing. In the meantime, the value of the team itself increases over time, and it even increases in part because of the new arena built with taxpayer dollars.
So, Holahan and Kroncke ask, why not give the taxpayers a stake in the team? In the case of the Bucks, they calculate that an investment of this size would be worth about one-forth of the value the team. So, when the Bucks are sold again, the taxpayers would get a quarter of the proceeds. It's not as good as just insisting that the Bucks' billionaire owners pay for their own sports palace, but it's not a bad compromise.
And if the Bucks' owners refuse that kind of fair deal, well, let them dribble away. If Gov. Walker keeps fighting for this, it might be the best thing that has happened for the Democrats since the Brewers stadium vote almost two decades ago.