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Fri April 6, 2012
On Opening Day, Talk of Ending Sales Tax Surfaces
The Brewers mark their eleventh home opener today at Miller Park. For more than a decade, consumers in five southeastern Wisconsin counties have been paying a higher sales tax to build the retractable-roof stadium. As WUWM’s Marti Mikkelson reports, there is now talk that the extra tax could end in five years.
Very early one morning in 1995 – following a bitter overnight debate, the Legislature cleared the way for southeastern Wisconsin to build the Brewers a new stadium with a retractable roof. The weather could no longer play spoiler. Lawmakers gave five counties permission to boost their sales taxes by one-tenth of a penny. The extra revenue would pay for three quarters of the $400 million needed to construct the ballpark. The rest was to come from the team and from naming rights. Republican Sen. Alberta Darling of River Hills voted in favor of the plan.
“I supported the stadium because I felt it was very important for jobs, economic development and for the image of the city and the state. There were very strong feelings on both sides. Some said we cannot let the Brewers go and others said we shouldn’t use tax dollars for the stadium,” Darling says.
Angry residents in Racine later recalled their senator, because he voted to include their county in the taxing district. All five counties did bump up their sales taxes in 1996: Milwaukee, Waukesha, Ozaukee, Washington and Racine. At the time, planners estimated it would take about 20 years to pay off the debt. Stadium District Board Executive Director Mike Duckett says tax collections are on pace to meet the initial projection.
“Each year we engage an independent financial advisory firm to look at our revenues, our expenditures, our future obligations, our debt retirement payment schedule, and then forecast for us what year would be reasonable to expect to retire the tax. For the third year in a row, they told us it appears we could retire the tax somewhere in the time frame of 2016 and 2018, with the most likely scenario being 2017,” Duckett says.
Nearly all the tax money pays down the debt, while revenue from ticket sales and concessions goes toward improvements at the stadium. Duckett says he’s relieved tax collections are picking up again. They dropped ten percent in 2009 and 2010, but then increased nearly eight percent last year. Todd Berry of the Wisconsin Taxpayers Alliance says the recession took a toll on the five supporting counties.
“Whenever the Wisconsin economy and in that part of the world, it’s a fairly heavy manufacturing kind of economy, when that sector takes a hit and people start to work fewer hours or be laid off and consumers start to pull back, of course sales tax revenues are not going to grow at the same pace. But, it looks right now that the economy is getting some legs,” Berry says.
Berry says for the most part, sales taxes are reliable. So even if the economy slows down again, he predicts it would not dramatically change the expected pay off date. The Stadium District’s Mike Duckett says Miller Park has not incurred any new debt since the sales tax was enacted, and once the cost of construction is paid off, the operation will be self sufficient. He says the District would then have a choice to either dissolve itself or stay on in an advisory role.