Bruce Murphy
Murphy’s Law

Miller Park Tax Ends in 2020. Not.

Despite “sunset,” taxpayers will subsidize stadium until 2040, with total costs unknown.

By - Mar 20th, 2018 12:13 pm
Miller Park

Miller Park

It happens every spring. That’s when baseball fans get ready for opening day and America’s pastime, and when the press annually returns to the issue of the Miller Park tax subsidy. In anticipation of this, the Southeast Wisconsin Professional Baseball Park District issues its now-yearly “Sunset Date Report,” a projection on when the sales tax paying for the Milwaukee Brewers baseball stadium will end.

The good news, we’re told, is that the Miller Park tax is projected to sunset in late 2019 or early 2020, as Fox 6 recently reported and the Racine Journal Times reiterated.

That’s technically true, but quite misleading. For it suggests we will no longer be paying to subsidize a for-profit Major League Baseball franchise worth $925 million and owned by mega-wealthy money manager Mark Attanasio. But in fact we will actually be subsidizing the ever-more valuable team and ever-richer owner at least through 2040 — if not forever.

Back in 2016, the stadium authority’s executive director Mike Duckett told me the Stadium Authority board was salting away money in reserve funds to assure there would be enough to continue subsidizing the stadium until 2040. He said the $1.75 million annual maintenance payment will over time increase, to a maximum of $2.2 million by 2030. So that’s about $2 million a year or $42 million that will be paid by taxpayers after the tax “sunsets.”

In addition, the stadium authority is putting aside money to pay for any expenses that may arise for capital costs: perhaps for a new scoreboard or maybe a new engine, or “bogey,” that moves panels of the convertible roof along a semi-circular rail system. (A replacement bogey cost $13 million at the end of the 2006 season.)

As of 2016, the total money salted away was $52 million, Duckett told me. It will likely be a good deal higher by 2020. (Duckett was out of town and not available to offer any updates.) The entire reserve is being collected from taxpayers ahead of time, to assure we continue subsidizing the Brewers for the next two decades.

The Miller Park tax has been collected from Milwaukee, Waukesha, Washington, Ozaukee and Racine counties since 1996. The earliest projections were that the tax would sunset around 2010, but that was moved back to 2014 and then over time to 2017, 2018 and then early 2020.

Duckett told the Racine Journal Times that the economic downturn caused a reduction in sales tax collections, which explains the ever longer payoff date for the stadium. But the downtown has also meant far lower interest rates, which has allowed the stadium authority to repeatedly refinance the bonds issued to pay for Miller Park’s construction. The bonds were refinanced in 1998, again in 2001, and the district’s latest financial statement says it did “debt defeasances” in 2005, 2008, 2015 and 2016 which I’m guessing involved refinancing, though the report doesn’t address this.

“Every decision we make is made with the goal of turning off this tax as soon as possible,” Duckett recently told the Milwaukee Journal Sentinel. In fact there is a long list of additional expenses the district incurred over the years, including:

-$15 million (over five years) for the stadium authority’s administrative and operating costs;
-A new $11 million scoreboard, with taxpayers paying $5.9 million of the cost;
-$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;
-$3.9 million for an LED ribbon board encircling the stadium’s seating bowl;
-$1.6 million on public relations (over six years) to make the stadium authority look good.

These are merely the biggest ticket items among many more charged to taxpayers and reported in 2012 and in 2016.

The Legislative Audit Bureau hasn’t done a study of the stadium’s costs since 2002, when it concluded that $413.9 million had by then been spent on construction of Miller Park, which was 28.5 percent more than the $322 million approved by the legislation (and an August 1995 memorandum of understanding) to fund the stadium and $14.5 million more than the Audit Bureau found in its 1999 review of stadium costs.

The “sunset date” and even the total of sales taxes paid doesn’t tell us the total bill paid by taxpayers, because some of that money was recouped through refinancing, with all the gains retained by the stadium authority. And none of this is accounted for by the stadium authority, whose website offers little information or transparency for taxpayers: there is no update on added costs, no annual budgets going back in time, no summary of money saved through refinancing, no link to audit bureau reports, and no link to the original law and memorandum of understanding that is supposed to govern the authority’s decision making.

For that matter, there are no press releases to be found. For instance, a press release explaining when and why the stadium’s board decided to extend the tax subsidy to 2040, meaning the lease will last 40 years, well beyond the 30-year period repeatedly noted in the media and described that way in a Legislative Audit Bureau report.

Back in 2015 State Rep. Tom Weatherston (R-Caledonia) introduced legislation that would prevent the stadium district board from refinancing and adding to the stadium debt and in 2016 he called for an audit of “exactly how much money is collected and how it is spent.”

Both proposals went nowhere. When it comes to subsidizing the Milwaukee Brewers, the taxpayers don’t seem to matter.

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More about the Miller Park Stadium Tax

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Categories: Murphy's Law, Politics

33 thoughts on “Murphy’s Law: The Bogus Studies of Miller Park”

  1. AG says:

    Bruce, excellent point that many of those out of town visitors may have been here for for other reasons and also just happened to decide to see a Brewers game. I’m embarrassed to admit that I didn’t think of that simple fact, despite encouraging that exact thing for many convention and organizational visitors I have interacted with.

    However, even if 75% (or even 90%) of out of town visitors to Miller Park were here already, the remaining 25% (or 10%) would still provide a net benefit that is greater than the total tax payer dollars put toward the stadium.

    I’m also curious on how much you think the data would have changed for % of out of town visitors since 2001? If anything, I feel like Miller Park as a destination has only increased. Not to mention, if one accepts your theory that Miller Park is an afterthought for visitors, then your hypothesis for declining out of metro visitors compared to 2001 would be largely moot (I’m assuming you hypothesis is that it declined, for that is the only way that would support your article). I also fail to see how this wasn’t addressed by using ticket sales zip codes? Is it only the missing data estimation that you have an issue with?

  2. Bruce Murphy says:

    AG, thanks. I think anything you or I say on out-to-town visitors would simply be speculation. That’s what a study is supposed to offer, some hard research. To have two studies based on an earlier study that doesn’t include the study and its data, to me simply disqualifies it as research.

  3. No to mention the opportunity cost — the value of billion dollars invested in some other way. Education for example, according to many economists would be a better investment.

  4. Joanne Brown says:

    Anyone think the same study will be reconfigured for the Bucks arena?

  5. Matthew says:

    As I have now become an ‘Out of Town’ visitor for the last few years, I have to say that the reason for my visits right now are to see family. When I come to town, we usually just look for something local to do such as summerfest, zoo, museums, sporting events, holiday shows, biking, dining, etc. Depending on what is happening in MKE we can usually find something fun to do. With or without the Brewers we would probably be spending the same amount per trip. It would definitely be a miss-attribution to claim that our spending is being driven by the Brewers.

  6. mbradleyc says:

    SMH

  7. Joe says:

    Tom said what I was thinking. None of this takes into account the “impact” using that money in some other way might have produced.

  8. AG says:

    Opportunity cost is a good question to ask. But also consider… if public money didn’t offset the price of Miller Park and the team had left, what is the value of player and organization payroll taxes that would be removed from the state coffers? Not to mention sales tax on goods and services that are baseball operations related (including concessions and such). Combine that with the money spent by people who DO come just for the Brewers (the actual numbers are debatable, but they DO exist) and I just see a lot more benefits than costs. Then add on top of all that the intangible benefits of a local sports franchise…

    This goes back to some of pro-sports biggest critics that say it isn’t really about the public contributions, it’s about the monopoly the sports teams have. They have the power to pull up stakes and find another location that will give them what they want. I think there’s a point at which a limited amount of public support makes sense… and Miller Park’s tax I think is a good balance.

  9. Joe says:

    Yes, AG, all of those aspects should be considered. Yet there isn’t a single reputable study that has quantified those impacts, so your conclusion that public financing was warranted in this case is not supportable by evidence.

    At the end of the day, we subsidized a private asset on behalf of an organization owned by a billionaire, at an enormous cost to whoever else might have otherwise received the money. Until our public schools are better, sports stadiums should take a back seat in my opinion.

  10. Vincent Hanna says:

    This text references an interesting study looking at intangible benefits and their relevance when it comes to public money: https://medium.com/@agatescal/are-intangible-benefits-a-considerable-factor-to-stadium-building-economics-2c870178991.

    Another study, “Public dollars, sports facilities, and intangible benefits: The value of a team to a region’s residents and tourists,” argues that intangible benefits are real and significant (while admittedly hard to measure) and should be considered when discussing public money for stadiums.

  11. AG says:

    It’s ok Joe, my conclusion is subjective so others are allowed to disagree.

    And if we waited for our schools to get better before doing any other quality of life enhancements… well… we’ll just lack any quality of life enhancements.

  12. Scott says:

    Studies… you can tweak studies in any direction you feel meets your needs. Economic value is a SYNERGY of everything this great city has to offer. MLB, NBA and our phenomenal stadiums are indeed luxuries, and luxuries that you find in the very best large cities. I was at the game last night, stayed dry, and sat among hundreds of Boston fans. People visit MKE for everything we have to offer, and in many cases, baseball! I am willing to pay my share for the benefits of PRO sports. This is Milwaukee!

  13. Wisconsin Conservative Digest says:

    Bruce, you have always been right on this point and the Brewers, now the Bucks mess. While important problems go unanswered we spend tons of money on basketball.
    Milwaukee has always been a baseball town.We love them, so for us it is worthwhile exependiture. Does it help economically? Yes, but how much? Who knows. We do know that baseball in Milwaukee is nothing.
    The Packer are Wisconsin and we must keep them.
    We know that the leaders of Wisconsin were greatly dissatisfied with the Brewers after the deal.

  14. Rbupp says:

    If private business was funding these huge WANTS we would have no new billion dollar basketball facilities or multi million dollar streetcars!

  15. Rob B says:

    Amen Scott. I have traveled to many other cities, purely for sports. Example, I’ve seen the brewers in Chicago, Seattle, Boston, New York, etc. I know the fans of those other teams do the same. Some folks do it on a yearly basis! These people would not be coming to Milwaukee if not for the sporting event…it likely wouldn’t be on their radar.

    I understand it’s a huge cost and the studies may show inflated economic impact, but I personally think having pro spots is a HUGE boon for Milwaukee. It helps put us on the map and keep us relevant in terms of “big city amenities.” People come and stay for these attractions (summerfest, arts, sports, museums, etc). We start to lose them and we start to lose both visitors and transplants.

  16. What I find curious is that the one thing that Miller Park could point to for increased economic activity isn’t mentioned because it’s hard to pin down who grills in the parking lot and who buys what during games. It’s food and drink!

  17. DairyStateMom says:

    No reputable study, anywhere, ever, has found there to be a net positive effect of the cost to taxpayers of a stadium. Ever. Anywhere. And believe me, many places have tried. (I’m not saying a baseball/basketball/football/etc. team isn’t fun to have around; only that they aren’t worth public money weighed against roads, bridges, and schools).

    I got interested in this stuff when the new Sox stadium went up in Chicago while I was still living there, and became even more interested when I moved to Racine (where, some of you may remember, we tossed George Petak on his sorry butt after he voted for the stadium tax).

    Neil de Mause of the Field of Schemes blog (fieldofschemes.com) has done yeoman’s work for many years in this area. The tab to taxpayers, according to de Mause, is around $2 billion (yup, with a “b”) every year. (Total, folks.) $2 billion is a lot of schools, or a lot of health care, or a lot of playgrounds for kids, or a lot of roads. Wait, what was I reading JUST TODAY that the current proposed Wisconsin budget trades roads now for education and health care funding?!

    Thanks, Bruce, for keeping this issue out there. I fear you’re a voice crying in the wilderness, but hey, somebody has to do it.

  18. Don’t want to be misunderstood on the food comment. I’m with Bruce, and Obama for that matter, that public money shouldn’t be paying privately profitable sports facilities. I don’t feel the same about cultural activities because there is a more direct and constant positive effect on economics — just ask the parking structures downtown! But as one manager of a supermarket who loves the Brewers tail-gating told me, people in Wisconsin love to cook out so much they would do it on the street. They like that the Brewers have given them the venue, but I doubt if they think they should be taxed over it!

  19. Dewey Martin says:

    Bruce, your analysis is focused on the math behind the big spending numbers cited by UWM or Chamberlain in support of the economic benefits to Milwaukee County that flow from Miller Park as opposed to throwing money at milwaukee public schools, police or fire budgets, street repair or any number or local needs. Take a look at the logic economists use in reaching their conclusion. Very theoretical using assumptions without any real world testing or surveys. Taking the funding directed toward Miller Park and applying it to the needs in other areas wasn’t on the table. It wasn’t an either or decision. The benefit to local residents in improved quality of life, national international “big league” status are difficult to measure and that’s why economists ignore them and limit their examination solely to whether a team/stadium increases average personal income in the region not whether jobs were created, not whether additional tax dollars were created. From a policy standpoint, the same majority of economists that was cited in your article argue that luring overnight visitors from other parts of the state or for that matter out of state is bad policy because those folks would be spending the same money spent on tickets, brats, beer, and parking in Steven’s Point, or Schaumburg on movies, bowling or in their local taverns. The reality is that if Milwaukee wants Major League Baseball or NBA Basketball there’s a price tag. If Milwaukee doesn’t want it, there are communities that are willing to spend the same money and then some to lure a major sports team into their market.

  20. fightingbobfan says:

    One thing I do know. In the service of his employer at the time, The Journal Company, Charlie Sykes harangued critics of the project and bullied anyone who dared call up an question the wisdom of the project. He really played the role of company man pit bull.

    Which leads us to another issue.

    The sports pages comprise a major portion of our home town paper. Would we even have a newspaper if there was no Brewer news to cover half the year?

    Guess that’s an economic issue too.

  21. Bruce Thompson says:

    For some time, I have thought that a fair solution would be for the taxpayers to take an equity interest in the team, which is the appreciating part of sports. Instead they get the depreciating part, the ball park.

  22. Andrew says:

    Bruce Murphy- please do your own funded study, then afterwards we can criticize it because of the biased reflected in these articles that you put out prior. I do understand that’s what is happening in your opinion when three studies do show that there is a positive economic impact yet you wish to continue to say that there’s not because of a generalization in the economics field. I was at the game yesterday and had the pleasure of sitting behind a group of 12 people from Davenport Iowa who’s only reason to come to Milwaukee was to see the Brewers game and the only reason they invested the money to come is because they knew regardless of the temperature they will be able to see a game because of the retractable roof. These individuals each probably racked up a bill from the concession stands in excess of $50, and that’s not even considering if they stopped at a grocery store in the area and had it any type of pre-or post game tailgate. I believe the impact of that single group probably offset my tax cost for the entire year of the stadium. I know that’s a small sample size however consistently I have heard and seen similar stories in my visits to Miller Park. I can appreciate the fact that an endless stadium tax is not something that is wise and depending on your political leanings downright disgusting, but to continue to point out information that doesn’t pass the commonsense test of what you see at the stadium when it comes to economic impact of people out of the state and long-distance visitors, I feel it makes you look jilted.

  23. fightingbobfan says:

    Some of you have got to learn how to use a return key.

    As John Oliver put it, a city would derive more economic benefit by putting that money in a helicopter and dropping it over the city.

  24. Jack Norman says:

    Bruce Thompson’s idea is attractive, but remember: appreciated assets only yield profit when they’re sold. And the taxpayers’ share of ownership would always vote against a sale of the team as protection for the team staying in Milwaukee.

  25. AG says:

    You know a discussion is a productive one and being conducted by informed people when someone quotes John Oliver.

  26. Paul says:

    Nobody claims that there is NO economic benefit to having a major-league ballpark in town.
    My husband and I went to St. Louis a couple years back specifically to see the Brewers play the Cardinals, and we spent a couple days patronizing restaurants, a hotel, bars, and a few tourist sites. At the game, we sat in front of a family from Iowa — perhaps the same folks Andrew met at Miller Park, who knows. There are always plenty of red t-shirts in the stands when the Cards play here.
    But we’ve only gone to Busch Stadium once. Quite possible that it will remain our only visit, unless one of us has to attend a convention there.
    I bring this up only because Milwaukee and St. Louis are similar insofar as they share the same reputation as brewery cities, and are at a distance, unlike Chicago, where an overnight stay is likely.

  27. fightingbobfan says:

    It is possible to be comedic and factual, just like our president is comedic inadvertently and non-factual.

  28. Dennis Sell says:

    I doubt if the thousands of Chicago Cubs’ fans who came to Milwaukee during the weekend of April 7-9 would have come to our city had it not been for the baseball games. These thousands of fans spent money staying at hotels and eating at our restaurants during their stay here.

    The Cubs are scheduled for two other weekend series in Milwaukee–July 28-30 and September 21-24. Thousands of Cubs’ fans will travel to Milwaukee during those two weekends, particularly the July weekend and will again patronize our hotels and restaurants.

  29. Joe says:

    Dennis – Most of them tailgate with their own food and then drive home after the game.

    They come here specifically because tickets are cheaper than going to a Cubs game, and from the northern suburbs of Chicago it’s actually a faster drive than trying to get to Wrigley in Chicago traffic.

    They do not come here to “experience” Milwaukee (i’m sure a few of them probably do, but please spare us the hyperbole of “thousands”).

    But hey, if you’re fine with your tax money building a stadium for the Cubs, don’t let me rain on your parade.

  30. Vincent Hanna says:

    Joe how do you know how many Cubs fans come here just for a game, especially between June and August?

  31. Joe says:

    Vincent, i think the burden should be on the person claiming thousands of Cubs fans staying in Milwaukee hotels many times a year to prove that. As a former Chicagoan i have at least some basis on which to make my claims as to why Cubs fans come here. It was universally to avoid the hassle of Wrigley.

    Not statistically significant, but then again that’s kind of the point of Bruce’s article.

  32. Vincent Hanna says:

    Oh I agree that they come here because it’s easier to get tickets (and you always know the game will be played). I’m not disputing that. But I think it’s disingenuous to claim that the majority are not coming here for any other reason, they just go straight to the game and straight home, especially in the months of June, July, and August. I also used to live in Chicago and I work with Cubs fans now and I have my own anecdotal evidence that suggests plenty of Cubs fans come here for much more than the baseball game.

  33. Bill Kurtz says:

    The bottom line is that 2 things separate the Milwaukees, Cincinnatis and Kansas Citys from the next rung of cities (Toledo, Rochester, N.Y., Louisville, Des Moines). One is cultural institutions, the other is major league professional sports. If we haughtily refuse on principle to subsidize either, how much better off are we? We may save $100 or $200 or so personally, so the only reason to take that stand is principle. And that principle is about the only one I know that unites the libertarian right and the politically correct left. At least that makes sense on the right- if all taxes are bad, even a small savings is a good thing. But for leftists, opposing stadium/arena subsidies because they’d rather see that money spent on various social concerns is a dead end, because nobody else is ready to sign on to their preferred spending agenda- they’ll just pocket the tax savings, thank you!

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