Wisconsin governor Scott Walker has announced a $220 million bond proposal that would help pay for a new Bucks arena in Milwaukee, Wisc. Walker proposal has the state’s already existing “jock tax” paying for the bond proposal, without creating any holes in the state’s general fund or creating new taxes. This proposal was unveiled as part of his proposed state budget for 2016-17.
Wisconsin currently has a jock tax — a tax on professional athletes in the states — on the books. and Walker has proposed that the taxes paid by NBA players’ earnings will pay off the bonds used to pay for the arena’s construction. Walker, and the state, are projecting NBA player’s salaries to grow exponentially after the NBA’s new TV contract kicks in. As a result, the state is expecting its revenue from the tax rapidly increase. The increased revenue is what the state is planning on paying off the bonds with.
The $6.25 million Wisconsin currently receives from NBA players will be dedicated to the state’s general fund, and not used to pay for the bonds.
By guaranteeing the current tax dollars to the state’s funds, Walker has made it so that a whole will not open up in the state’s budget as a result of the bond payments. He has also made it so the citizens of Wisconsin, or Milwaukee, will not be taxed to pay for the new arena. It will also guarantee more money for the states, once the bonds are paid off.
This proposal means the arena is projected to cost $520 million — $300 million from private investors, and $220 million from the state. The Bucks would be responsible for 57.9% of the arena’s financing, when they are only going to be 40-50% of the buildings event dates. It’s not a bad deal for the state, especially if the private investors are responsible for cost overruns and keeping the building up to date.
Walker also pointed out that the state would lose $9.3 million a year (staring in 2017) if the Bucks left Wisconsin.