Sheehy Says Local Sales Tax Must Help Fund Brewers’ Stadium

American Family Field. Photo by Jeramey Jannene.

The Chairman of the opaque board managing the Milwaukee Brewer’s stadium district recently said revenue from the new sales tax enacted by the City of Milwaukee and Milwaukee County will need to be part of a deal to keep the baseball team in Milwaukee.

Tim Sheehy, chairman of the Southeast Wisconsin Professional Baseball Park District and president of the powerful local Metropolitan Milwaukee Association of Commerce (MMAC), wrote in an Op-Ed for the Milwaukee Business Journal declaring that using a portion of the new city and county sales tax revenue “is the basis for a state/local bi-partisan solution to signing the Brewers to a generational lease extension, along with the team kicking in its share.”

Local leaders, including Sheehy, had for years advocated for the sales tax on the grounds it would stave off financial disaster and allow the city and the county to invest in government services.

A spokesperson for County Executive David Crowley said Democratic leadership asked the county for examples of what a local contribution could look like. “We proposed technical changes to Act 12 language (same language we proposed during the negotiation period) to allow us to use sales tax dollars to further reduce our structural deficit and provide more financial flexibility for Milwaukee County period,” said Brandon Weathersby, Crowley’s director of communications.

So while the state wants a local contribution to the stadium district, Crowley’s team is saying the county needs the ability to use the sales tax to directly pay off some of the county’s unfunded pension liability. “We have not proposed using sales tax dollars for [stadium] renovations,” he said.

The county’s structural deficit is the gap between how much it costs to maintain the government and how much revenue the government takes in. For years, this deficit has forced county officials to shave money off the annual budget wherever possible. A major contributor to the deficit has been the county’s pension system, which will also be slow-walked to closure over the next three decades.

The new sales tax revenue is limited, by state law, to be used for paying down the county’s pension bonds. But it frees up tax revenue that was previously used to pay down those pension costs.

Sheehy and the MMAC were major players in a private and non-profit sector coalition that lobbied for the sales tax. “New sales tax revenue for the city of Milwaukee and Milwaukee County, coupled with an increase in state-shared revenue, is a clear-and-present solution to the fiscal cliff both bodies were facing if nothing had been done,” Sheehy said in June. “These new streams of revenue provide the region fiscal solvency and make it more attractive to potential residents and businesses looking to make a move.”

Sup. Sheldon Wasserman, who was in the state Legislature when the Brewers stadium sales tax was passed, told Urban Milwaukee in June he was concerned the state would force the county to relinquish some of its new revenue, at the time still hypothetical, for a stadium deal. Wasserman was skeptical that state-level Republicans would allow Milwaukee to keep all of its revenue. The supervisor has repeatedly stated that the original sales tax for the Brewers stadium shouldn’t have been repealed in the first place.

The Brewers’ stadium district was created by the state as part of the financing for the stadium passed in 1996. The district’s board handled oversight and management of the revenue generated by a five-county 0.1% stadium sales tax. To date, the tax has raised $609 million to pay for construction of the stadium and ongoing repairs and maintenance, but the total subsidy for the stadium including all tax exemptions has totaled $1.5 billion as Urban Milwaukee has reported. The stadium sales tax was dropped in 2020, and now the Brewers are seeking a new subsidy to fund repairs and improvements.

Gov. Tony Evers had crafted a proposal to use the massive state surplus to make an upfront payment of $290 million which would grow with interest, but Republican legislators condemned the deal, with Assembly Speaker Robin Vos contending that any deal must include funding from Milwaukee taxpayers. Now Sheehy is trying to sell that approach.

Sheehy said the district’s reserves have enough to pay for approximately $3.2 million a year in maintenance until the end of the current lease.

“But the Milwaukee Brewers are now interested in a ‘generational lease extension,’ well beyond 2040, and well beyond the effective end of the current lease in 2030,” Sheehy wrote in his op-ed. “Just as you would think differently about putting a new roof on your house if you were staying another 20 years, there is a need to think differently about the capital improvements to keep American Family Field in top shape well beyond 2040.”

The cost of this “generational lease extension,” Sheehy says, is $24 million a year in upgrades and capital improvements. The chairman noted that baseball at the stadium generates approximately $25 million in sales and income tax every year, “and with the new city and county sales tax, local tax collections will also increase.”

The Brewers have been on a lobbying blitz to secure a subsidy. Major League Baseball Commissioner Robert Manfred joined the push earlier this year, warning that without a deal the Brewers could leave.

But public subsidies for private sports has long been unpopular among voters. And local Milwaukee leaders like Crowley and Mayor Cavalier Johnson just pulled off a political coup, as first-term executives negotiating additional revenue for Milwaukee with the Republican-controlled Legislature. Crowley signed a resolution passed this spring by the Milwaukee County Board that unequivocally opposes using county funds to subsidize improvements or maintenance at American Family Field.

While Sheehy’s op-ed was published by the Business Journal, it was addressed to elected officials. He closed it off saying, “To the Governor, Legislature, Mayor, and County Executive, stay in the batter’s box and swing for our future.”