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Dave lives in Bay View and is a graduate student at Marquette University. He is a student of politics and history, a skeptic, optimist, and writer, among other things.

Why a New Arena Tax Might Not be a Bad Idea

NBA, Bucks, sales tax, tax, Walker, Kohl, Bradley Center, Sheehy, MMAC

Recently, Metropolitan Milwaukee Association of Commerce President Tim Sheehy suggested that the 0.10% Miller Park stadium sales tax be extended to fund an eventual replacement for the Bradley Center, which is among the oldest arenas in the NBA.

Arguments against a sales tax to fund a new arena seem to come in two basic flavors: Let Someone Else Pay and I Don’t Care.

Much of the Let Someone Else Pay argument is rooted in people not wanting to pay taxes because, well, people don’t like paying taxes. Not liking taxes, like complaining about the weather, is something that people do. Some day, with enough complaining about taxes and weather, neither will exist.

In the case of an arena tax, the regular dislike for taxes is aggravated by the fact that a new arena would benefit millionaire basketball players, their millionaire owner, and a team that charges too much for most people to enjoy decent seats without feeling guilty for spending the money or for having to steal it first.

The problem with the Let Someone Else Pay argument is that the Someone Else will likely not be the rich team or its rich owner but some other city’s taxpayers. This will be a city that knows it wants a major league basketball team, a first class arena, and the potential economic benefits associated with both. With other cities willing to make such an investment, the team doesn’t have to and can’t be expected to do so here.

Although government taking a role in attracting (or retaining) a basketball team is not unlike Governor Walker’s vision of attracting business and encouraging job creation through tax cuts, the governor has come out against a sales tax to fund an arena. He said that instead he would prefer private sources of funding. He also said he would like Santa Claus to come a little early next year. These would be nice things.


Washington lawmakers want basketball to return to Seattle. Frasier Crane just wants some peace and quiet.

 

The other argument against an arena tax is I Don’t Care. In the comments sections at JS Online, this argument is often tied in with complaints about the Bucks, their draft picks, NBA basketball. “Let them leave town,” etc. etc.

What would losing major league basketball mean for downtown businesses? Would the Bradley Center, which lost $2 million last year, even be viable without the Bucks? Would it remain available for hockey, major concerts, and other events? What would these losses mean to the local economy and to Milwaukee’s stature?

I don’t know the answers to these questions, but we need to consider them before deciding that we don’t care about losing basketball.

Could money be better spent on education, health, or transportation? Probably. But we are not facing a choice between funding an arena or other social priorities, because the creation of a dedicated sales tax to fund those other priorities is not going to happen. Milwaukee County residents are still waiting for the state legislature to approve the 1% parks and transit sales tax that voters asked for in a 2008 referendum.

More problematic to me is the regressive nature of a sales tax, which eats up a greater percentage of a person’s income the poorer they are. One possible solution would be a partial rebate to offset the costs to low income residents. Another solution would be, as an alternative to a sales tax, a tax on large local businesses that would benefit from a new arena. A local business tax was used to fund a stadium for the Washington Nationals, and its potential as an alternative may explain why the MMAC President is advocating a sales tax instead.

Needless to say, having either residents or businesses on the hook for funding a new arena is an imperfect situation. But either expecting someone else to pay for an arena or not caring about the consequences of losing NBA basketball is an inadequate response.

 

 

 

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