Two weeks ago, a Business Journal story reported that some firms are discontinuing their luxury suite deals with local pro sports teams. One “firm” had for years enjoyed the trifecta of luxury boxes: Aurora Health Care was paying for suites at Miller Park, the Bradley Center and Lambeau Field. Yep, Aurora bought itself the ultimate ticket to Brewers games (where suites went for as much as $100,000 a year), Bucks’ and Marquette Golden Eagles’ games ($100,000-$200,000) and Packers games ($68,000 to $154,000).
How is it that most Wisconsin companies couldn’t afford so much luxury but Aurora could? Perhaps it’s because they have to pay property taxes whereas Aurora, which is technically a charity, is property tax exempt. So here’s how it works: Low-income city residents and senior citizens struggling to make house payments must pay property taxes, and the most impoverished tenants may see their living costs climb higher as landlords react to property tax hikes by increasing the rent. Yet Aurora gets exempt and has so much cash lying around it can afford to buy private boxes for every major league sport.
Aurora has a foundation whose most recent (2008) federal tax form indicates it benefitted from $761,423 in gifts, grants and contributions that year and had accumulated $4.5 million in assets. It solicits charitable contributions from people, and yet it buys luxury suites?
Aurora is a mega player in the local health care scene, with many different hospitals and clinics that obviously have an impact on the cost of medical care. And there have been countless surveys and stories showing that medical care costs more here than in other Midwest cities. Yet Aurora could afford to spend hundreds of thousands of dollars per year living the suite life?
Aurora Health Care’s CEO Nick Turkal earned just under $2.3 million in compensation in 2008 while its Chief Operating Officer Donald J. Nestor earned nearly $2.2 million. Those are certainly the kind of salaries you’d expect to see for corporate honchos buying sky boxes. Except that Aurora isn’t a corporation, it’s a charitable organization that serves the community.
I have no doubt the donations going to Aurora were not used to pay for luxury boxes. But the funds of any entity are fungible; money donated for one cause means the organization, in its entirety, need spend less on a particular service it provides. Just as a property tax exemption fattens an organization’s budget. No matter how upright the accounting at Aurora, it is unseemly for a tax-exempt charity to be buying luxury suites – as unseemly, you might say, as its executives earning more than $2 million in annual compensation.
Aurora spokesperson Michael Brophy told the Business Journal the organization had a change of heart. “We decided it was better to spend our money on patient care than a suite. It was … the right thing to do.”
The right thing would have been to never buy the boxes in the first place.
Misleading JS Story on Taxes
Saturday’s Milwaukee Journal Sentinel told us Wisconsin stayed out of the top 10 states for combined state and local taxes in 2008, for the third year in a row. That’s true but quite incomplete, and thereby, quite misleading.
Reporter John Schmid writes that “some commentators … follow tax tables as if they were Packers scores.” It’s a cute line, if a tad exaggerated, but if it were true, why wouldn’t Schmid want to report all the findings he was given?
The analysis he was reporting was by the Wisconsin Taxpayers Alliance, which did indeed find the state ranked 13th in tax burden. But the Alliance also found Wisconsin ranked 21st in total revenue (all taxes and fees) raised by state and local government.
The truth is that Wisconsin has probably never ranked in the top 10 for total taxes and fees. This is a state without toll roads, with lower college tuition charges and with other fees that are lower than in other states. When you look at total government spending and total revenue collected from its citizens to pay for this spending, this is an average state, not a tax hell. In 2008, the Alliance found that all local and state revenues amounted to 16.7 percent of the average Wisconsin resident’s income, compared to 16.4 percent on average in the other 49 states. You could hardly get any closer to average.
In the last year or so, some liberals have begun bashing the Wisconsin Taxpayers Alliance as biased, often with commentary offering more heat than light. But the irony here is that the Alliance report did include the figure on total revenue raised, which ranked Wisconsin 21st among the states, and the Journal Sentinel left this out. So the Alliance looks pretty darn objective. The JS, not so much.
The Buzz
-Veteran reporter and former Isthmus editor Marc Eisen is always authoritative, as was his feature explaining how Tom Barrett could win the race for governor, which ran in Isthmus two weeks ago. He suggests that liberal third party groups will likely bash the hell out of the Republican standard bearer while nice guy Barrett will portray himself as the more high-minded candidate. Perhaps, but it remains to be seen just how Barrett will walk this tight rope. It’s quite possible some of those attack ads will be run by Barrett’s campaign.
As Milwaukee Magazine’s feature story on Barrett noted, he played nice guy in the race for governor against Jim Doyle and lost; but in the next election, for Milwaukee mayor, he played hardball against Marvin Pratt and won. As a PR insider told the magazine, “when (politicians) get a little taste of toughness, they tend to stay tough.” Like Tina Turner, Barrett may play it nice and rough.
-The Sunday New York Times story on President Barack Obama’s strategy in the fall campaign noted he will do just five fundraisers for candidates in August, including one for Barrett in Wisconsin. That suggests Democrats nationally see this as a key state.
-NewsBuzz explains why Republicans are now running away from Congressman Paul Ryan and his “dangerous” ideas.
-And Pressroom Buzz discusses Journal Communications’ shuttering of its upscale shelter magazine.
