Capitol Report
By State Representative, Leon D. Young
Leon D. Young
In recent weeks, my office has been inundated with calls and letters concerning the construction of a new sports arena for the Milwaukee Bucks.
In truth, the constituent contacts conveyed to my office have been equally split: in terms of registrations in support as well as against.
As we all know, the Assembly is scheduled to debate the merits of the arena proposal this week.
And, at the time this article was written, the actual floor debate on this issue had yet to take place.
Consequently, in an effort to clear up some of the misinformation on the subject, I thought it was important to share with my constituents and readers some the relevant arguments (both for and against) this project, as presented to members of the Assembly Democratic Caucus.
Arguments in support of the arena include:
• This an opportunity for a major investment in Wisconsin that will create thousands of jobs and spur long-term economic activity in Milwaukee.
The owners have said that this project will be expanded to include hotels, restaurants, and other attractions.
This will create even more jobs.
• The proposed arena will cost approximately $500 million as a part of a total $1 billion economic development project in downtown Milwaukee, which is estimated to create or preserve roughly 15,000 permanent and temporary construction jobs.
• The current and former ownership have committed to fund $250 million toward funding the arena and are looking to partner with state and local governments for the remaining 50 percent of the total funding.
• Any cost overruns would be paid by other sources, but not the state.
• For every dollar the state invests, state taxpayers will get a $3 return through income tax revenue.
• This plan protects state taxpayers from the loss of current and future tax revenue generated by the Milwaukee Bucks and from the visiting teams.
Base revenues of $6.5 million per year in state income taxes from the Bucks and visiting teams total of $130 million over the next 20 years.
• This plan preserves the growth of an estimated $169 million in income tax revenue due to future contracts and estimated NBA pay increases.
• Claw back provisions are included to protect both the state and local governments.
If the Bucks leave they will have to pay back the public investment.
The payback will be proportional to dollars contributed.
• Maintenance and operations will be paid for by the team, not by the state or local governments.
• If there is no deal and a stadium is not built, the NBA will buy back the Bucks and move the team to another state.
There will be a loss to state taxpayers of at least $419 million over the next 20 years.
The state will lose a minimum of $130 million in base income tax revenue over 20 years.
The state loses an estimated $169 million in future growth in income taxes over the next 20 years.
State taxpayers will be on the hook for $120 million for the Bradley Center over the next 10 years.
Opposing arguments for the arena include:
• It is hard to justify spending $250 million ($400 million over the life of the bonds) in taxpayer funding for a professional sports arena while the Republican budget slashes public education, cuts $250 million from our UW System, and eliminates state funding for our parks.
• If Republicans had better managed our state budget to fund the priorities of Wisconsin families, this investment would be easier to accept.
• Republicans negotiated this deal without input from Assembly Democrats. Now, they are demanding that 15 to 20 Democrats vote for their plan.
• Republicans dialed back statewide investments in transportation infrastructure because they were concerned about too much bonding.
In the grand scheme of things, arena proposal is far from being perfect.
However, keeping the Bucks in Milwaukee makes complete sense and is prudent public policy.
This arena deal now ensures that Milwaukee and Wisconsin will remain on the NBA map, and will help to revitalize our entire state economy.