Gov. Scott Walker had a huge day yesterday—he announced a new Milwaukee arena funding plan that he called fiscally conservative, uses no new taxes and is a free-market solution to the Bucks/BMO Bradley Center woes.
That was the biggest news in Milwaukee and got good buzz for Walker.
But that’s not all.
Walker also announced a $300 million cut to the UW System, which will be nothing short of crippling.
And last but not least, Walker announced his presidential exploratory committee, Our American Revival, so we should assume he’ll continue combining Jesus and politics on the campaign trail.
But back to the arena.
Yes, his plan is getting tons of praise in the press.
And no, not many details were included in his presentation.
But from what I can tell, Walker’s plan isn’t quite what he promises.
First off, he said he’d keep $6.5 million of the “jock tax” in the general purpose fund so that it doesn’t harm taxpayers. That money will continue to go to education, health care, etc. The NBA and the Bucks are set to make even more money in the future, so everything the state takes in above that $6.5 million would go to pay off the bonds.
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But I’m not sure where Walker got that $6.5 million figure.
Last year, state Rep. Robin Vos asked the Legislative Fiscal Bureau to come up with the revenue generated by the jock tax.
That number came in at $10.7 million in 2012. It’s on page 2 of this memo.
So if the state general purpose fund gets $10.7 million from the jock tax, then why isn’t that the base level going forward? Is Walker swiping $4.2 million from the general coffers every year? How does that not penalize the state?
Now, you can say that the $4.2 million of diverted funds annually is a good investment to keep the Bucks in Milwaukee. That’s fine and that may well be true. But Walker isn’t talking about that $4.2 million at all.
Secondly, I really tax issue with Walker calling this a free-market solution. It is not a free-market solution.
The Bucks owners will be getting a great deal on a loan thanks to the state’s intervention.
The Bucks folks could, after all, try to finance the new arena without state help, or the city’s help, for that matter. Isn’t that the free-market solution?
This sort of thing makes me crazy. Free-marketeers often like to talk about how they’ve become successful without any help from the government. But when you scratch the surface a little bit you’ll find that there usually is some sort of public subsidy or support. They just don’t want to acknowledge that.
But that doesn’t fit with the narrative Walker is trying to sell the public.
In the end, Walker positioned himself as a pro-Milwaukee reformer on the day he needed some good press. Let’s hope that our public officials, as well as the media, are a little more skeptical about what he’s trying to do.
