While we believe it’s in Milwaukee’s best interests to keep the Bucks in town, we also believe that the latest version of the funding plan poses many risks for local residents. Gov. Scott Walker’s initial plan put the state on the hook for about half of the costs of a new sports arena, but this current one has increased the local share of its financing. And it poses a lot of risk for Milwaukee County residents.
Milwaukee Mayor Tom Barrett has offered to provide tax incremental funding for a new parking garage, a traditional source of support for a project of this type. We support Mayor Barrett’s approach. But Milwaukee County Executive Chris Abele apparently has agreed to an unusual form of financing. Abele is asking the state to go out and collect up to $4 million of bad debt owed to the county each year. If the state can’t collect that amount, it will reduce state aid by that amount to the county. Abele can agree to this financing plan without county board input and apparently he specifically asked for the county to be cut out of the deal.
We have a lot of problems with Abele’s plan. As is often the case with Abele’s ideas, they may sound good—“Let’s collect the debt from those deadbeats.” Now, who can disagree with that? But in reality once you get past the “feel good” sound bite, it is very naïve. First off, if this debt was so easy to collect, the county would have already collected it. Secondly, the state has no real incentive to hire debt collectors to get its money since they can simply push the costs back on the Milwaukee County property taxpayers if they don’t retrieve enough in debt collection. The way this is structured, if the state can’t collect this difficult debt, it will simply subtract what it can’t collect from the shared revenues that the state provides to the county for property tax relief. Essentially it is a dollar-for-dollar reduction of shared revenue and a dollar-for-dollar increase in property tax. So there are no incentives for the state to use its resources to collect the debt. Instead, the easiest thing to do is for the state to just reduce state aid to the county by up to $4 million a year for the next 20 years, for a potential loss of $80 million. We should have a special line on our property tax bill for the Chris Abele property tax increase.
|
|
We believe it is worth taking some very calculated financial risks to keep the Bucks in town. But these risks need to be thoroughly vetted to ensure that they are worth taking. We fear that this is just another of Abele’s simplistic answers to a very complicated issue.
