The Eternal Stadium Tax
It was originally supposed to end two years ago, but the Miller Park sales tax just goes on and on.
It’s the tax that never seems to end.
In 1995, the state legislature passed a law creating a new five-county sales tax to underwrite a new stadium for the Milwaukee Brewers. At the time, the tax was expected to sunset in 14 years, in 2010. Yep, that was two years ago, and the sales tax just keeps getting collected, and its sunset date moved back. The latest estimate for its end is 2018 — six years from now.
The tax has operated as something of slush fund that can be grabbed to pay for everything from a new scoreboard for the Brewers, installed in 2011, to $1.6 million worth of PR help for the public stadium authority. A year ago, Tim Sheehy, head of Metropolitan Milwaukee Association of Commerce, floated the idea of extending the tax to pay for new NBA arena, which could cost as much as $500 million. The idea was shot down, but you can probably expect a few more grabs at this slush fund.
A decade ago, I did a story for Milwaukee Magazine that tabulated all costs of the ballpark, including countless hidden tax subsidies: the total bill was more than $1 billion, or $1,585 for every household in the five county area.
In the early years of the ballpark, the state’s Legislative Audit Bureau did updates of the escalating costs. But it’s been nearly a decade since its last report, and we can only guess at what lovely new amenities we taxpayers are bankrolling.
The Southeast Wisconsin Professional Baseball Park District began imposing a 0.1% sales tax in Milwaukee, Ozaukee, Racine, Washington and Waukesha Counties on January 1, 1996. The original cost was supposed to be $250 million for construction of the stadium, with $90 million coming from the Brewers, plus $72 million for infrastructure.
But it turned out the Brewers couldn’t come up any money, besides $40 million in naming rights the team would be paid by Miller Brewing, so there was a scramble to throw in more money, with $15 million coming from the city’s Milwaukee Economic Development Corporation.
Meanwhile the board of the public stadium district, which oversees the project, began to creatively expand the parameters of how it could spend our money. Legislators thought the $250 million would pay to construct an entire ballpark, but the district decided to lease such items as a scoreboard, roof-drive mechanism, concession equipment and furniture, adding some $45 million in costs, the audit bureau estimated.
Other unexpected costs itemized by the audit bureau included a $28 million increase in infrastructure costs, some $15 million (over five years) for the stadium authority’s administrative and operating costs, and $4.9 million on furniture and equipment the Brewers requested, including a whirlpool bath, ice machines, sauna and steam room, batting and pitching machines, exercise equipment and video coaching system — all financed through the generosity of the taxpayers.
The stadium authority also thought it a fine idea to build a $3.3 million youth ballpark on the stadium grounds, with $1.1 million of it coming from the stadium tax.
A story I did for the Milwaukee Journal Sentinel in 2002 found the stadium district spent some $1.2 million on outside public relations consultants during a time it was also spending $230,000 on a full-time communications director. Of course, with all the spending it was doing, it probably needed a lot of help with its image.
In the years since the audit bureau’s last report, no outside analyst has been tracking the district’s spending. A new scoreboard, installed in 2011, cost $11 million, of which half was apparently paid for by the taxpayers. A Journal Sentinel story also suggested that taxpayers may have helped pay for refurbished luxury suites, added party areas and new team stores overseen by the Brewers, but the tax bill wasn’t tabulated. Did we taxpayers help finance upgraded stadium club patios, new signage and a new chalet for Bernie the Brewer? Your guess is as good as mine.
Meanwhile, the tax’s sunset date keeps moving forward: as early as 2000, it was pushed back to 2014. In 2010 the estimated date was moved back to 2015. Since then sundown has been moved back to 2017 or maybe 2018. The economic decline and reduced sales tax collections are one factor. But how much of the delay is due to increased costs?
Occasionally, legislative frustration with the endless tax has surfaced. In March 2008, two Republicans, Rep Robin Vos (Caledonia) and Sen Alberta Darling (River Hills), proposed setting a 2014 deadline for sunsetting the tax. The idea went nowhere.
Legislators from Racine County have been particularly restive. The county’s voters have always resented the tax and recalled former state Sen. George Petak for casting the deciding vote in favor of the stadium bill. In March 2010, Democratic state Sen. John Lehman proposed a ticket surcharge be collected from ballpark attendees to speed up payoff of the stadium debt. The Brewers politely rejected the idea. In May 2011 two Democratic representatives from the Racine area, Cory Mason and Bob Turner, sponsored a bill to remove Racine from the taxing district. Another idea stillborn.
The most recent estimates are that some $530 million will be paid by taxpayers by the time the sales tax ends. That leaves off a dozen or more items — more infrastructure costs and multiple tax exemptions — that helped pay for the stadium, whose costs my Milwaukee Magazine story estimated at more than $500 million.
Back in 1996, when the stadium district was created, the Brewers sold stock at a price which indicated the team’s net worth was $96 million. By March 2012, an analysis by Forbes magazine estimated the team’s value at $448 million. Most of that increase in value is a direct result of building — and continuing to improve — Miller Park. You might call us taxpayers the co-owners of the team. But don’t expect to be issued any stock.