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Discussion on how to fund a new arena anchored by the Milwaukee Bucks is heating up at the state level. Today, an important step was reached in piecing together the financing puzzle. The non-partisan Legislative Fiscal Bureau today released a memo on the state individual income tax revenues generated by Milwaukee Bucks players and employees. […]

Discussion on how to fund a new arena anchored by the Milwaukee Bucks is heating up at the state level. Today, an important step was reached in piecing together the financing puzzle.

The non-partisan Legislative Fiscal Bureau today released a memo on the state individual income tax revenues generated by Milwaukee Bucks players and employees. Gov. Walker and members of the state Legislature have pointed to this LFB information as an important piece in determining the value of the Bucks – as a business – to the state of Wisconsin.

Nearly all parties involved in the discussion about a new arena have acknowledged that public financing is needed for construction of the facility. Many have said the state Legislature will need to be involved in whatever public financing decision is made. The memo released today – addressed to Assembly Speaker Robin Vos (R-Rochester)  on Sept. 30, 2014, weeks before the statewide fall election – is important because it’s the state’s first step toward understanding how that decision might look.

The LFB memo says that in 2012, “NBA players and other (Bucks) employees who were potentially subject to the Wisconsin individual income tax … in the aggregate paid state income taxes of approximately $10.7 million.”

The second piece of this memo deals with the meat of the issue: how state funding could go toward construction costs for a new arena. The LFB memo looks at issuing “state general obligation bonds” over a 20-year period, saying the $10.7 in annual tax revenues “could support approximately $150 million in state general obligation bonding, based on current interest rates. The total 20-year cost to repay the $150 million in general obligation debt would be $214 million, which includes $64 million in interest costs.”

“This is one viable option that the Legislature could consider,” Rep. Vos said in a statement.

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Issuing these bonds would require legislation at the state level. The LFB memo outlines how that could happen, but in no way does that mean it will happen. Nothing here is definitive.

Another point to consider is that these tax revenue estimates are based on 2012 numbers. The NBA’s overall funding picture has grown rosier since 2012, and, in early October, the NBA inked a new nine-year, $24 billion media rights deal with ESPN and Turner Sports that will take effect for the 2016-17 season. The pool of money in the NBA is undoubtedly growing. So are the Bucks. The team’s new owners recently announced approximately 40 new employees have been added since May, growing the organization by 50 percent.

What the LFB memo does not take into account is future revenue projections, says Rep. Dale Kooyenga (R-Brookfield), a member of the Joint Finance Committee.  

Rep. Vos made waves earlier this week with comments to Mike Gousha on WISN’s UpFront, saying Bucks co-owner Marc Lasry’s appearance with President Barack Obama during his campaign visit to Milwaukee “probably wasn’t the wisest decision,” and “makes it harder for me to sell to our caucus.”

“Don’t forget, for people who live in most of the rest of Wisconsin, they look at Milwaukee as a place that already gets too much of our money,” Rep. Vos said to Gousha. “And now what you’re doing is making an even more difficult decision happen for a lot of folks around the state. They have to be a lot smarter with their technique. I want to bring those jobs and keep them in Wisconsin, but having us give hundreds of millions of dollars to big time donors who give to Democrats, but also have billions of dollars of their own, that’s a hard sell. I don’t think they need to do anything that makes my job more difficult.”

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It’s no secret that the Bucks’ owners have donated to Democratic candidates. Marc Lasry’s son, Alexander, who now works for the Bucks, recently was a White House aide. The Lasrys did indeed greet President Obama on the tarmac when he came to Milwaukee to campaign for Mary Burke.

Rep. Kooyenga, however, says this is not an issue.

“It doesn’t matter who (the Bucks owners) donated money to,” he says. “Generally speaking, for all issues that we deal with, it doesn’t’ matter what their political affiliation is.”

Kooyenga stresses that he’s looking at the arena issue from “an objective standpoint” and is “not impacted by partisan involvement.”

“We don’t represent just one party,” he says.

While the legislative aspect of this issue is certainly an important piece, wheels are also turning elsewhere. The MMAC’s Cultural and Entertainment Capital Needs Task Force will hold a meeting Nov. 25 on “potential funding uses as well as funding sources,” says Karen Powell, special events manager at the MMAC. The meeting will be at the Sharon Lynne Wilson Performing Arts Center in Brookfield at 8:30 a.m.

The bonding option outlined by the LFB has often been referred to as a “jock tax.” The task force’s Data Curating Team, however, ruled out a “jock tax” as a funding source at its Sept. 29 meeting, instead focusing on other options, including a consumption tax (or “sin” tax) on cigarettes and alcohol, tax incremental financing, a ticket tax, and a sales tax.

A final proposal from the task force is expected by the end of the calendar year, along with a decision on where the arena will be built.

For more information on location possibilities, funding options and much more, read our November cover story, “Downtown Horizons.”

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