9 Obstacles To a Brewers Deal

American Family Field. Photo by Jeramey Jannene.

Voters hate subsidies of professional sports teams.

In New York state polls showed the subsidy for the Buffalo Bills stadium was opposed by 63% to 24%. In Tennessee 61% of state residents opposed a subsidy for the Titans NFL team. In Albuquerque, New Mexico, a proposal to spend $50 million in public money on a $70 million stadium for the city’s minor league soccer team was rejected by 65 percent of voters.

As a result, “the vast majority of stadium projects across North American professional sport receive public financing without any form of citizen vote,” as one study found.

Which can make voters very angry. In Wisconsin state Sen. George Petak was recalled from office in 1996 for supporting the subsidy for the Brewers stadium. In Florida Miami-Dade County Mayor Carlos Alvarez was recalled in 2011 after backing a controversial stadium subsidy for the Florida Marlins. In Georgia in 2016 Cobb County Chairman Tim Lee was thrown out of office after leading the charge to give the Atlanta Braves a $400 million public subsidy for a new stadium.

A poll of Milwaukee County residents found they opposed using local tax money for a Brewers bailout by a two-to-one margin. Taxpayer opposition to such plans is the first and most important reason it’s so hard for Wisconsin’s politicians to craft legislation that can pass, but there are eight other reasons as well:

2. The Original Brewers Sales Tax Went on Forever: What was supposed to be a $250 million stadium, with $90 million coming from the team and $72 million for infrastructure, continued to collect the five-county sales tax for 24 years, collecting $605 million. The continually delayed sunset of the tax and ever higher costs of the stadium (for maintenance and improvements) after the stadium opened in 2001 angered residents and state legislators in all five counties and led the Legislature to pass a law ending the tax in 2020. That anger has made it impossible to levy another such tax, limiting the options of legislators.

3. What the New Plan is Paying For Is Unclear. Other than saying the proposed bill would guarantee the stadium lasts until 2050, it’s vague on what exactly the taxpayers are paying for. The original estimate of likely costs through 2040 was $87 million by M. A. Mortenson, hired by the stadium board, followed by a consultant hired by the Brewers, Venue Solutions Group, which upped the estimate to $428 million, and followed by CAA ICON, which increased that to about $572 million. Now we’re at a $700 million to take us through 2050. How was that determined? How can these estimates be so wildly different? What precisely will taxpayers be paying for? No one has explained, probably because the more you specify the more it looks like normal business expenses that the Brewers should pay.

4. There’s Been No Audit of Anything. As state Sen. Tim Carpenter has complained: “The public and the Legislature need to have full confidence that no stone is left unturned before hundreds of millions of dollars are spent on a luxury product like a professional ballpark. I’ve asked repeatedly for an audit to be done only to be denied each time. Without a full accounting, and without the Brewers opening up their books for review, I cannot support this deal.” Back in the 1990s, when the law paying for a new stadium was passed, the Legislative Audit Bureau reviewed the Brewers finances to make certain the team couldn’t afford to pay for the stadium. That’s not being done this time, probably because the team would oppose this and the Brewers’ net worth has skyrocketed in value since the stadium was built.

5. A Free-Standing Bill Is Tougher to Pass. Given the potential for voter outrage and possible recalls, the smartest way to pass the subsidy was to bury it in the massive state budget bill, which Gov. Tony Evers proposed to do. Then legislators could all say they opposed the subsidy, but had to vote for all the other good things in the budget. But Assembly Speaker Robin Vos decided to kill Evers plan. He may regret that.

6. Politicians Are Negotiating With Themselves Rather Than The Team. Evers’ plan cost $290 million and was expected to grow with interest to $378 million before it began being spent. Even at $290 million, it was estimated as the biggest per-year MLB lease subsidy in history by Neil deMause, whose website Field of Schemes tracks all pro sports subsidies. And the Brewers were happy with the deal. Yet the Republicans decided this wasn’t enough and created an even more expensive package. That’s going to make it harder to sell to voters.

7. Milwaukee Can’t Afford to Pay $200 Million. The law requires $2.5 million per year from the city and $5 million from the county, for a total of $202.5 million over 27 years. But both have just been rescued from fiscal insolvency by a legislative plan Republicans signed onto, after having been given profuse details on Milwaukee’s plight. And the city’s situation, even after getting a 2% sales tax, has just worsened: as the nonpartisan Wisconsin Policy Forum found, Milwaukee now faces an annual budget gap of $35 to $45 million beginning in 2025.

It’s clear the Republicans understand the situation. Rep. Robert Brooks (R-Saukville), their point man on the Brewers bill, said ”I don’t want (local) service cuts to pay for the Brewers,” saying the $7.5 million was just “a placeholder” and might be reduced to $5 million. The clear implication is that Republicans need to find some way to make it look like Milwaukee is paying much of the cost, so they can tell their constituents this. That’s also one of the reasons Vos objected to Evers’ plan, which had no cost for Milwaukee. But threading the needle of making the local cost both affordable and yet significant is looking pretty impossible. And even if Milwaukee does pay big, the proposal’s $400 million in state money may still anger outstate voters.

8. The Brewers Won’t Do Any Development. Mayor Cavalier Johnson (and probably Milwaukee County Executive David Crowley) would like to see some development around the stadium. It might be a fine area for a hotel, apartment complex and restaurants along the Menomonee River, which would normally generate property taxes for both the city and county. Except that the land and any developments are currently exempt from property taxes and the Brewers aren’t likely to support paying any taxes on it. Moreover, they’ve repeatedly indicated they have little interest in doing any development.

9. Winterized Stadium May Increase Costs for Taxpayers: This, too, wasn’t included in the Evers plan the team fully supported. It’s another Republican add-on with a cost of $25 million that would allow the Brewers to make more money by hosting concerts and other events throughout the year and would include a ticket tax on non-Brewers events to help pay for the winterizing. But Brewers Business Operations President Rick Schlesinger reacted negatively to the ticket tax. At this point the idea looks like yet another cost for taxpayers with all the benefits going to the Brewers. The more state officials mess with the stadium deal, the higher the costs get.