Here is my full column that ran earlier in the week in the Washington County Daily News
Wisconsin’s legislative Republicans have announced a new proposal to fund renovations at American Family Field in an effort to keep the Brewers in Milwaukee for another generation. The plan is a package of $600 million in state, county, and city funding coupled with $100 million from the Brewers. This is the third or fourth such proposal (I have lost count), but all of the proposals make some rather sweeping assumptions that must be challenged before the taxpayers are put on the financial hook for another couple of decades.
The first assumption is that having a Major League Baseball team in a particular community is a net benefit to that community. The current funding plan reflects that perceived benefit with proportionally more funding being committed by the entities that stand to benefit the most.
The Milwaukee Brewers are a private, for-profit business. They provide entertainment for profit. The Brewers employ local people, attract people from out of state to spend money in Wisconsin, and anchor some economic development. In this respect, they are no different than many other businesses headquartered in the state like a robust manufacturer or technology firm that generates economic benefit — most of which flows into the pockets of business owners and their employees.
There is also an intangible benefit to the Brewers being in Wisconsin. A major sports franchise contributes to a community by providing a shared identity and point of pride. It is a unifying force. Measuring this identifiable, but unquantifiable, benefit is difficult. We must acknowledge that there is a significant amount of vanity influencing the debate. Many lawmakers who want the taxpayers to support the Brewers do so because they like supporting the Brewers. They are fans.
If we take the first assumption to be true — that the Brewers are a net economic and societal benefit for Milwaukee and Wisconsin — then we must challenge a second assumption. Should the taxpayers subsidize the success of this private business?
Politicians are notoriously opaque about deciding when and how taxpayers should fund the success of private enterprises, but it happens all the time.
Through tax incremental finance districts, favorable tax incentives, direct subsidies, and other means, taxpayers are constantly supporting private businesses under the auspices of economic development.
Such taxpayer support is not necessarily a bad thing, but it should be done with reticence and clear expectations as to the return that the taxpayers might receive for their forced investment in a private enterprise. Too often, politicians are lax in their due diligence and weak in their demands when doling out taxpayer money. Such is the benefit of them spending other people’s money where they can take a victory lap for the spending while never being held accountable if there is no return on the investment.
All such investments must be prioritized in the context of all of the other demands on taxpayers. Is fixing AmFam Field more important than funding law enforcement? Road maintenance? Snow removal?
Other economic development like technology or manufacturing? Is AmFam Field more important than lowering taxes and reducing the size of government?
There is no such thing as a free lunch. In a world of scarce resources, funding AmFam Field means that something else will not make the list.
All things considered, having the Brewers in Wisconsin is a net benefit to the state, but it does not rise to the level of justifying hundreds of millions of dollars of taxpayer support. Moreover, the Southeast Wisconsin Professional Baseball Park District, which owns and operated AmFam Field, has done a terrible job managing the facility to be self-sustaining.
A quick look at the SWPBPD’s 2022 financial statements shows that they are running chronic losses. The only sources of revenue are $905,000 from rent from the Brewers, $300,000 in license plate revenue from the vanity plates, $4,500 in miscellaneous, and they lost $7.1 million in investments. Add on the $10.5 million in expenses and the District lost $16.4 million. This operating loss was on top of the $9.9 million loss in 2021.
2022 was a brutal year for everyone’s investments thanks to Bidenomics, so we can forgive the investment loss. The financials, however, beg some questions. Why did the Brewers pay less than $1 million per year to use the facility in 2022? That is less than $12,000 per home game. Why has the SWPBPD not found other ways to bring in revenue for the facility?
Why have they not been renting out the facility for other events to generate more revenue? Why is the SWPBPD not getting a cut of the sponsorship and concessions money? There is a lot of money is flowing through that stadium that is not making it to the taxpayers who own it for use in its maintenance.
The SWPBPD did a commendable job paying off the stadium debt early, but they have not done anything in twenty years to build a self-supporting revenue structure once the five-county stadium sales tax ended.
They are supporting expenses by spending down the nearly $60 million in reserves that was generated by the now defunct stadium tax. It appears that the plan all along was to come back to the public trough to sustain the stadium’s operations and maintenance.
Taxpayers are rightfully dubious about spending more hundreds of millions of dollars to pay for a building that has been terribly managed for the benefit of one private business. Lawmakers should look to sell the facility to a private enterprise that can manage it profitably and end the taxpayers’ obligation for its upkeep. Even if the underlying assets are sold for below market value, the end of taxpayer obligations is a net benefit for taxpayers. If lawmakers cannot find a private buyer willing to make the investment, then we must ask again why taxpayers would.
A few notes on this column. First, I screwed up the acronym. The governing board actually goes by SEWPBPD instead of SWPBPD. I’m not sure that’s an improvement, but there it is.
Also, it turns out that the lease that the Brewers have with the SEWPBPD that was negotiated and put in place by lawmakers before the board was constituted prohibits the board from monetizing the stadium. Essentially, the Brewers have exclusive access and get any proceeds from renting it out, concessions, sponsorships, etc. As the lease is written, the Brewers – NOT the taxpayers – get all of the benefits of owning the stadium without having any of the obligations for its upkeep or improvements.
The taxpayers are getting hosed here. Privatize the stadium and get the taxpayers out of bearing the costs of this wealthy, private entertainment business.