Vos Rejects Evers’ Brewers Payoff

Let’s start this morning with a quiz. Why has Speaker Robin Vos’ rejected Gov. Tony Evers’ proposal to give the Milwaukee Brewers $290 million? (Choose two.)

A) It was Evers’ idea.

B) His caucus hates all things Milwaukee.

C) It’s horrible public policy.

If you selected A and B you win a free years’ subscription to YSDA. (Nitpickers who want to point out that there is no subscription fee for YSDA can just go rain on somebody else’s parade.)

Here’s the quick background. Taxpayers in southeast Wisconsin ponied up $605 million over 26 years through a special sales tax to build the Brewers’ new stadium for them. But it’ll need maintenance and upgrades. So, before the sales tax was finally retired a couple years ago, the board which oversees the stadium set aside $70 million for that. According to a study commissioned by the board that should be enough to handle the costs.

But the Brewers wanted a lot more so they commissioned their own study that projects those costs at a whopping $428 million. Evers picked $290 million because it is projected that over time that will grow to roughly the $400 million or so the club says it needs. In other words, taxpayers will pick up ALL the costs of everything the Brewers want. And with an inflated cost projection that is perhaps $300 million or more above what they would actually need just to maintain the stadium they’ll be able to spend like drunken billionaires. The current lease agreement requires them to pick up 36%.

Because they knew reviving the sales tax was a political non-starter and because the state has $7 billion laying around in a surplus, Evers figured that the easiest path was to just hand over the taxpayer money in one lump sum.

Yesterday Vos, more or less predictably, rejected Evers’ plan and appointed a committee to work out some new deal with the Brewers. The only name worth mentioning on this group is Michael Grebe, a retired lawyer, former Republican Party chair and big time Milwaukee mover and shaker. But whatever Grebe comes up with you can bet it’ll be no better, and probably even worse, than Evers’ plan.

The fundamental thing to understand here is that this is extortion. The Brewers will threaten to pick up and leave unless they get $290 million. It does not need to be in unmarked bills, so I guess that’s a concession, but in one form or another taxpayers will have to fork over something in the neighborhood of, say, $200 to $300 million, or else. (Because the team has so wildly inflated the costs they could easily back down by tens of millions of dollars and claim they’ll stay but they’re going to have to scrimp and save and charge more for hotdogs to get by.)

It’s not encouraging that Vos points to the Bucks’ arena deal as a good alternative. Taxpayers are paying $250 million — about half the price tag — for Fiserv Forum. One of the owners who benefited from that public largesse, Marc Lasry, just cashed out. His 25% stake in the Bucks, which he acquired in 2014, went from about $140 million to $875 million, a 636% increase.

The Brewers were purchased in 2005 for $223 million and are now worth at least $1.22 billion, a 438% increase. And that’s probably low as the Bucks are now valued at $3.5 billion.

Vos probably likes the Bucks’ subsidy for two reasons. It was negotiated by Scott Walker, a Republican governor. and it leans more heavily on Milwaukee taxpayers. As noted above, taxpayers are putting $250 million into the Bucks’ arena. But $47 million of that comes from the city of Milwaukee. And of the remaining $203 million, about $90 million is being skimmed from shared revenue payments that would have gone to Milwaukee County, according to an analysis by Milwaukee Alder Robert Bauman. And, because this is borrowing, state taxpayers will end up paying a lot more in interest payments. One advantage to Evers’ cash plan is that there are no interest costs. (One disadvantage is that after the state hands over the cash the Brewers will get to earn interest on all that money until they need it.)

I wish I could cheer for Vos’ strike out of Evers’ Brewers billionaire bailout. But I have a feeling his next pitch will be driven out of the ballpark.