A Home Run for Wisconsin: Keeping professional baseball in Wisconsin
Christopher Schaefer, Executive Director, Pax Americana Institute
Earlier this month, the Wisconsin State Assembly, in a resounding show of bipartisan support, approved, sixty-nine to thirty-seven, Assembly Bill 438, legislation designed to ensure the Milwaukee Brewers Baseball Club remains in Milwaukee until 2050. For more than six months, the bill’s authors Representative Rob Brooks (R-Saukville) and Senator Dan Feyen (R-Fond du Lac), spent thousands of hours meeting with stakeholders to negotiate a first-rate agreement for Wisconsin taxpayers. Unlike Governor Tony Evers’ proposal, which would have funded stadium repairs using $290 million of one-time general-purpose revenue to pay for stadium repairs, Assembly Bill 438 uses income tax revenue generated from professional baseball players and personnel. According to the nonpartisan Legislative Fiscal Bureau, the State of Wisconsin would receive more than $650 million in income tax revenue during the terms of this renewed lease. Furthermore, Assembly Bill 438 appropriates more than $400 million of the aforementioned income tax revenues for stadium upkeep and repairs. Assembly Bill 439 is pending in the Wisconsin State Senate and has received homage from Governor Tony Evers, who indicated he intends to sign the bill into law.
1995 Wisconsin Act 56 established the Southeast Wisconsin Professional Baseball Park District to oversee the design and construction of a new stadium for the Milwaukee Brewers Baseball Club. To finance project costs, the district was authorized to issue revenue bonds and impose a local sales and use tax—an ubiquitous method for financing professional sports stadiums and arenas employed by innumerable cities, counties, and states throughout the United States—in Milwaukee, Ozaukee, Washington, and Waukesha counties.
In an August 1995 memorandum of understanding signed by representatives of the state, Milwaukee County, the City of Milwaukee, and the Brewers outlined the stadium’s ownership, design, construction and management. The MOU, to which it is herein referred, included a $322 million project budget: $250 million for the stadium; and $72 million for infrastructure improvements.
The Southeast Wisconsin Professional Baseball Park District is akin to a local unit of government, a body corporate and politic that is separate, district and independent from the state.[1] The district is governed by a board comprised of six individuals appointed by the governor, two individuals appointed by the Milwaukee County Executive, and one individual appointed by each of the following: Milwaukee Mayor, the Racine County Executive, the Waukesha County Executive, the Chairperson of the Ozaukee County Board of Supervisors, and the Chairperson of the Washington County Board of Supervisors—Assembly Bill 438 recasts the board’s composition and will be discussed in detail in a later section. Powers and duties of the stadium district are enumerated under Wis. Stat. 229. The aforementioned statute provides some oversight authority to the Department or Administration, specifically with respect to special debt service reserve funds.
To fund construction of then-Miller Park, now American Family Field, the legislature, in 1996, imposed a six-county sales tax increase of 0.1 percent. The sales tax was terminated on March 31, 2020. As of March 2020, shortly before elimination of the sales tax increase, $605 million had been collected to for the construction of Miller Park and the Stadium District’s ongoing financial obligation to operate it. What is more, since 2001—the inaugural season of Milwaukee Brewers baseball at then-Miller Park—the Milwaukee Brewers Baseball Club has paid $19.8 million in rent to the district and another $106.8 million to maintain and enhance the park.”[2] According to Joe Taschler of the Milwaukee Journal Sentinel, “The tax repays the $290 million in construction debt plus interest for the stadium which opened in April 2001.”[3]
According to the Metropolitan Milwaukee Association of Commerce, “Approximately $605 million in contributions from the District have been used to fund the initial construction and ongoing maintenance of the ballpark over the past twenty-one years. The Brewers signed an initial thirty-year lease with the District to operate the building and play their home games therein. Since opening in 2001, the Brewers have paid the district $19.8 million in rent.”[4]
Wisconsin’s nonpartisan Legislative Fiscal Bureau, in describing the stadium funding sources, wrote, “According to terms of the existing lease between the Southeast Wisconsin Professional Baseball Park District and the Milwaukee Brewers Baseball Club, the District is responsible for certain lease obligations, including major capital repairs and necessary improvements related to the stadium, and maintenance and repairs associated with the stadium’s retractable roof, among other obligations. Regarding the “necessary improvement” specified under the lease, the lease requires the district to make any and all necessary improvements to keep the stadium on par with the replacement components and upgraded facilities in at least seventy-five percent of all Major League Baseball Stadiums.”[5]
The Southeast Wisconsin Stadium District’s inability, as the Milwaukee Brewers Baseball Club’s landlord and owner of the stadium, coupled with impending termination of American Family Field’s lease, necessitates the need for Assembly Bill 438. Studies conducted by both the Milwaukee Brewers Baseball Club and State of Wisconsin found that the district is devoid of the funds necessary to meet current lease obligations. Assembly Bill 438 is necessary and of paramount importance for the following reasons:
- First, the State of Wisconsin is the principal owner of the stadium and a default on the lease obligations would be detrimental, as the Milwaukee Brewers Baseball Club is American Family Field’s only tenant.
- Use of player and personnel salaries to fund maintenance and repairs of American Family Feld. The nonpartisan Legislative Fiscal Bureau found that Wisconsin is anticipated to receive $650 million in income tax revenue coming from players and Major League Baseball-related personnel, between the effective date of the new lease and 2050. Assembly Bill appropriates $400 million of the aforementioned income tax for stadium maintenance and repairs.
- The stadium is more than twenty years old and in need of constant renovations. For example, the stadium’s air conditioning unit is obsolete, making it nearly impossible to find replacement parts. In fact, just two of the stadium’s three original chillers (used for cold water and air conditioning) are operational.[6]
- The local sales tax has expired, leaving revenue sources for the maintenance and improvement of the stadium well short of the funds required to meet contractual obligations.
Having a professional baseball team provides profound economic benefits to Milwaukee, the surrounding communities and state of Wisconsin.
Wisconsin Assembly Bill 438:
Wisconsin Assembly Bill 438, if passed by the Wisconsin State Senate and signed into law by Governor Tony Evers, would provide much-needed repairs to American Family Field and ensure the Milwaukee Brewers remain in Wisconsin until 2050. Additionally, the bill directs state and local funding of a professional baseball district, delineates the district’s use of those funds, and modifies the powers and administration of the district. The following represents an epigrammatic summation of Assembly Bill 438’s, as amended by the Wisconsin State Assembly, core provisions:
- A twenty-seven year lease term, keeping the Milwaukee Brewers Baseball Club in Milwaukee until 2050; the current lease is set to terminate in 2040. Assembly Bill 438’s lease agreement also contains a nonrelocation agreement. According to the nonpartisan Legislative Fiscal Bureau, “[Assembly Bill 438] specifies that the Department of Administration may not award a grant to the district unless the district has entered into a nonrelocation agreement with the team that, except as required by the league of professional baseball teams of which the team is a member, requires the team to play all of its home games at the baseball park facilities and prohibits the team from relocating prior to the expiration or termination of the lease.”
- A new investment of more than $100 million by the Milwaukee Brewers Baseball Club. This is more than double the team’s current rent payment and ensures a contribution by the Brewers of more than $140 million over the term of the lease. What is more, Assembly Bill 438 requires the Milwaukee Brewers Baseball Club to make at least twenty-seven annual deposits in the amount of $3,360,253, consisting of: (a) $2,151,852 into the district’s newly-created baseball park facilities improvement segregated fund beginning in 2024 and (b) $1,208,401 to the district beginning in 2024. Currently, the Milwaukee Brewers Baseball Club makes rent payment of $1,208,401 annually to the district and $300,000 annually to a segregated fund held by the district for stadium capital repairs and improvements.
- A $135 million contribution from local units of government, with $67.5 million coming from Milwaukee County and $67.5 from the City of Milwaukee. Both the City of Milwaukee and Milwaukee County support passage of Assembly Bill 439. According to the Legislative Fiscal Bureau, “Beginning in 2024, annually, no later than July 1, Milwaukee County would be required to deposit $2,500,000 into the baseball park facilities improvement segregated fund.”
- Changes the expiration date of the Milwaukee County sales and use tax to no later than December 31, 2050. Under current law, the authority for that sales and use tax expires no later than thirty years after the tax takes effect.
- Requires Milwaukee County to retire its pension obligation bonds by December 31, 2030.
- Requires the local professional baseball park district, in consultation with the City of Milwaukee, Milwaukee County, and Milwaukee Brewers Baseball County, to study the feasibility of, and operations for, redevelopment of the district’s facilities besides the baseball stadium, and to prepare a report summarizing the findings of the study.
- Provides one-time funding for winterization of American Family Field, allowing the city to host events year-round.
- Reshapes the stadium district board but specifying that the newly-created district board would be governed by a nine-member board, each of whom must be a resident of Wisconsin, as follows: (a) a chairperson and three additional persons appointed by the governor, all of whom take their seat immediately upon appointment and qualification, subject to senate confirmation; (b) two persons appointed by the majority leader of the senate; (c) two persons appointed by the assembly speaker; and (d) one individual who may not be an employee of the state or of a professional baseball team that leases baseball park facilities as its home facilities, appointed by the governor form a list provided by the team.
The Milwaukee Brewers Baseball Club generates support from all seventy-two counties, is an economic driver in southeast Wisconsin and source of pride for Wisconsin. Relocation to another state would prove calamitous for Wisconsin and result in a completely avoidable economic decline for all communities and counties dependent upon the Milwaukee Brewers Baseball Club for sales tax revenue.
Loss of the state’s only tenant in American Family Field would result in billions of dollars in lost revenue and all but guarantee Milwaukee will never again be the home of a Major League Baseball franchise. The Brewers relocating would adversely affect every resident of Wisconsin.
As denoted at the outset, the only state tax dollars being appropriated for repairs and upkeep of American Family Field come from income taxes collected on the salaries of the times playing on the field and their employees. If the relocated or ceased operations, Wisconsin would lose the team and $650 million in income taxes generated from their presence in the state. If one does not play or work for Major League Baseball, he or she will not see their tax dollars used for stadium maintenance. Conservative estimates have the State of Wisconsin earning $630.5 million in income tax through the duration of this lease. What is more, the state will generate $219 million more throughout the lifetime of the lease than it spends. Additionally, it is estimated that state and local tax revenue under this lease will total $88.7 million.
Since its formation in 1970, the Milwaukee Brewers Baseball Club has generated copious support from Wisconsinites in all seventy-two counties, been an economic boon in southeast Wisconsin and source of pride for the state. According to the Metropolitan Milwaukee Association of Commerce, “For fifty years, the Brewers have been an economic asset for the city, county, and state. Since moving to Miller Park, the team has provided enhanced benefits to the local economy, attracting more than 2.7 million fans, despite operating in the smallest market in Major League Baseball. The consistent impact of the Brewers has led to additional investment in the areas surrounding the ballpark, and has helped maintain the economic stability of local businesses.”[7]
Opposition to this bill transcends political party or ideological predilection and is precipitated chiefly by misunderstanding of the professional sport stadium financing and the specifics of Assembly Bill 438. Despite claims to the contrary, Assembly Bill 438 is not corporate welfare or a bailout of billionaires or a professional baseball team, as the Southeast Wisconsin Stadium Board, an entity of the state, owns American Family Field. Assembly Bill 438 was approved sixty-nine to twenty-seven, with fifteen Republicans opposing final passage. This author, a steadfast conservative who is vehemently opposed to subsiding private business, fails to comprehend the arguments made by his ideological ilk. Representative Adam Neylon (R-Waukesha), one of the fifteen conservatives who opposed final passage of Assembly Bill 438, posited, “It is irresponsible to give $546 million in taxpayer funds to a team that has increased more than $1 billion since the last time we used taxpayer funds to build them a stadium. Using taxpayer dollars to renovate facilities for a baseball team worth $1.6 billion is a bad deal for taxpayers.”[8] Americans For Prosperity, a leading conservative free-market parroted analogous falsehoods, claiming Assembly Bill 439 gives taxpayer money to wealthy out-of-state owners.[9] These arguments are disingenuous, as the State of Wisconsin is not subsidizing wealthy out-of-state owners or giving money directly to the Milwaukee Brewers Baseball Club; it is upholding its lease obligations as the Milwaukee Brewers Baseball Club’s proprietor. If the bill were structured differently, increasing sales taxes, or appropriating money from the state’s general fund to pay for upkeep and maintenance of American Family Field, this author would understand conservative opposition. Assembly Bill 439 is not a subsidy or bailout and does not increase taxes. In essence, it simply requires millionaire professional athletes to use a portion of their income to remain employed.
Protection of America’s pastime is, perhaps, the most consequential social conservative issue of our time. Baseball is representative of America, patriotic, industrious, cerebral, methodical, and celebratory of our nation’s heritage, culture and customs. James Earl Jones epitomized this best in his legendary Field of Dreams speech, “America has rolled by like an army of steamrollers. It has been erased like a blackboard, rebuilt, and erased again. But baseball has marked the time.” In times of turmoil and tumult, Americans of all races, creeds, religions, and political persuasions have looked to baseball to heal and unify the nation. Baseball, indeed, represents everything that makes America the greatest nation in history. If anything, conservatives should laud Assembly Bill 438 for its preservation and protection of America’s pastime. This author concurs with syndicated columnist George Will’s assessment of baseball’s impact on American culture: “Baseball also is a good game for a democracy because it teaches democratic lessons. It is a game of the half loaf. In baseball, as in democracy, no one gets everything he wants…Baseball also is, as America is, both about individualism-and cooperation. But baseball also requires teamwork-on offense, to move runners another ninety feet-and on defense, to make twenty-seven putouts.”[10]
Baseball more aptly embraced and adapted to profound societal transformation than any other institution in America; integration, globalization, technology; scientific discovery and mathematical advancement are among the game’s greatest contributions to the fabric of our republic. America’s pastime served as the laboratory upon which the salience of these transformations were tested. Whether it was Jackie Robinson’s breaking of the color barrier, the game’s Latin American and Japanese renaissance, breakthroughs in physics such as bat speed and velocity; or establishment of new statistical mythologies (Sabermetrics), baseball has more stridently ingratiated itself into the fabric of the American psyche than the nation itself. Baseball led the way with respect to integration, globalization, technological, scientific and mathematical breakthroughs; society failed to keep pace. No other institution better represents the greatness of America than its pastime, baseball. Protecting America’s pastime and everything it represents is the most consequential social issue of our times.
Suppositions leveled by detractors of Assembly Bill 438 that it subsidizes a professional baseball team is patently erroneous, as it does not impose a sales tax on residents of Milwaukee County or the surrounding counties, or employ a user fee for attending Milwaukee Brewers baseball games. Instead, it requires the players and Major League Baseball to pay the state of Wisconsin to use American Family Field. Professional athletes contributing to American Family Field is akin to an individual paying a user-fee to visit a state park or pay a venue rental fee. Assembly Bill 438 is a win-win for Wisconsin as it keeps the Milwaukee Brewers and the sales and income tax revenue they generate, in the state until 2050. This author hopes the Wisconsin State Senate recognizes the inherent advantages of this legislation and acts swiftly in their deliberations. Assembly Bill 439 is, indeed, “A Home Run for Wisconsin.”
[1] The district is an independent body and no other entity secures its debt. In fact, Wis. Stat. 229.52 specifies that the state and district’s sponsoring municipalities are not responsible for the district’s debt. That said, however, there is a “state moral obligation pledge” under Wis. Stat 229.53, which assures the district’s bondholders that the state will not “limit or alter the rights and powers vested in the district” under statute before the district has fully met and fully discharged of its bonds and any interest due on those bonds.
[2] Taschler, Joe. “Five-county Miller Park stadium sales tax will go away on March 31 after 23 years. The Milwaukee Journal Sentinel, March 11, 2020. Retrieved from: : https://www.jsonline.com/story/news/2020/03/10/miller-park-board-end-sales-tax-helped-fund-brewers-stadium/5002966002/
[3] IBID
[4] Metropolitan Milwaukee Association of Commerce, Economic, Tax Revenue and Media Impacts of the Milwaukee Brewers Baseball Club and Miller Park,” February 17, 2020, p.5. Retrieved from: https://homecrewadvantage.com/wp-content/uploads/2020/02/The-Economic-Impact-of-the-Milwaukee-Brewers-and-Miller-Park-1.pdf
[6] Calvi, Jason, “American Family Field repairs; what do Brewers want funding for?” Fox 6 News, July 13, 2023. Retrieved from: https://www.fox6now.com/news/american-family-field-brewers-repairs-tour
[7] Metropolitan Milwaukee Association of Commerce, Metropolitan Milwaukee Association of Commerce, Economic, Tax Revenue and Media Impacts of the Milwaukee Brewers Baseball Club and Miller Park,” February 17, 2020, p.4. Retrieved from: https://homecrewadvantage.com/wp-content/uploads/2020/02/The-Economic-Impact-of-the-Milwaukee-Brewers-and-Miller-Park-1.pdf
[8] Representative Adam Neylon, “Rep. Neylon Votes No on Taxpayers Funding the Brewers,” October 17, 2023. Retrieved from: https://legis.wisconsin.gov/assembly/98/neylon/news/press-releases/rep-neylon-votes-no-on-taxpayers-funding-the-brewers/
[9] Americans for Prosperity, “Americans for Prosperity Encourages Baseball Fans to Reject Stadium Ballot,” April 3, 2023. Retrieved from: https://americansforprosperity.org/americans-for-prosperity-encourages-baseball-fans-to-reject-stadium-bailout/
[10] George F. Will, Men at Work: The Craft of Baseball (New York: HarperPerennial, 2010), p. IX.
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