A lot of information came out in Monday’s meeting of the Milwaukee County board’s economic and community development committee.
Once again, Milwaukee County Executive Chris Abele failed to appear. Instead, his aides pitched the deal yet again to skeptical supervisors.
A few bombshells came out, despite Abele’s silence. (Or perhaps because of it.)
The biggest bombshell came from Milwaukee County Comptroller Scott Manske who, with his staff, prepared a pretty detailed report about the county’s bad debt, which would be used to finance the new Bucks arena.
Abele’s plan requires the state to take over the county’s bad debt and try to collect $4 million per year for the next 20 years. There are a number of sources of this bad debt, some of which are off limits to the county, such as courts restitution, airport collections and the like.
A big portion of the bad debt that is available to the county is delinquent property taxes as well as the interest and penalties on those delinquent taxes.
The stereotype is that this these delinquent property taxpayers are city slumlords and shady residents.
But actually, the county doesn’t collect delinquent property taxes from the city of Milwaukee.
Let me repeat that: Milwaukee County doesn’t collect the city of Milwaukee’s delinquent property taxes. The city does that on its own.
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Rather, those delinquent property taxes are from suburbanites. Which means that these in-debt suburban residents would shoulder a disproportionate share of financing the Bucks arena.
Manske found that the county has $16.9 million in delinquent suburban property taxes and $7.8 million in outstanding interest and penalties.
The collection of this bad debt and its lucrative interest and penalties goes to the county’s bottom line. In fact, in the current budget, the county anticipates receiving $3.5 million in interest and penalties alone. That’s used to offset property taxes to pay for county services.
So if the state takes over the county’s debt collection, it won’t have that $3.5 million in interest in penalties. Nor will it have up to $4 million in bad debt collection annually, since that automatically would go to the Bucks arena.
The plan blows a hole in an already tight budget, since the state would have to collect way more of the county’s bad debt than the county currently takes in just to make the county whole.
And, remember, if the state doesn’t collect $4 million in bad debt annually, it will deduct the margin from the county’s share of state aid.
No wonder why county supervisors are unhappy with Abele’s plan and why Supervisor Pat Jursik, chair of the economic and development committee, doubts that the plan is constitutional. No wonder why Abele won’t defend his plan in public. No wonder why Mayor Tom Barrett rejected bad debt as a source of public financing for the Bucks arena.
So, to wrap up, residents of Milwaukee suburbs who have fallen behind on their property taxes will be the ones who have to pay up to finance Abele’s plan to keep the Milwaukee Bucks in town. Why won't Abele defend his deal?
