Monday, April 17, 2023

Vos says the Brewers won't get $290 mil this year. But lots of games left to play

(Cue a hackneyed pun in an article on sports-related news).

While the Brewers are off to a strong start, the baseball season has a long way to go with twists and turns sure to follow…and so does the bill to pay for future fix-ups for the Brewers’ ballpark.
GOP Assembly Speaker Robin Vos says it’s unlikely his caucus will back dedicating state money to the Milwaukee Brewers’ stadium beyond income and sales taxes already generated from the team being in Wisconsin.

The Rochester Republican again declared that Dem Gov. Tony Evers’ proposal to direct $290 million in one-time state tax dollars to the district board that oversees the stadium is dead.
OK, so the straight cash to the district board for $290 million isn’t going to happen, and it oddly puts me in agreement with Robbin’ Vos. But as the opening of that article alludes to, that doesn’t mean Vos is opposed to giving funds to the team. He just says he wants it to be limited to what the Brewers add in revenue.
[Vos] noted, for example, the $11 million annually in sales tax revenue generated by activity at the stadium as well as the $12 million in income taxes from players’ salaries, including those from visiting teams who play in American Family Field.
The sales taxes include everything from ticket price, to food and beverages, to gear that you buy at the Brewer team store. We can debate whether the Brewers add activity vs what other entertainment/spending options would be for Wisconsinites, but the income tax part likely is a big boost to state finances.

That’s not just because a sizable amount of non-athletes work for the Brewers for their everyday jobs, but also because of a provision Wisconsin and most other states have that is known as a “jock tax”. That jock tax doesn’t just apply to athletes, as it also [for example] applies to musicians and other entertainers that make their way through Wisconsin while on tour, but it is very relevant to MLB players.
Most jurisdictions use a formula known as duty days, which includes days spent practicing and playing games during the season, as well as certain offseason activities. The duty day count ranges from 150+ for the NFL to 180+ for Major League Baseball.

States calculate the amount a visiting athlete earns by multiplying an athlete’s annual salary by the number of duty days an athlete practices or plays in their jurisdiction divided by the total number of duty days. That number is then multiplied by a state’s personal income tax rate:

To make the process easier, teams typically withhold and remit athletes’ wages to various states and cities throughout the year.
When you consider that the minimum MLB salary for 2023 is $720,000, and the average player salary is up to $4.9 million, that’s a whole lot of dollars from both teams that get taxed at Wisconsin’s 7.65% top income tax level when the Brewers are playing at home. And because Wisconsin’s top rate is higher than most, they generally turn a net gain in this exchange vs what Brewers players have to pay when they’re on the road.

The article from “The Hustle” that I’m quoting from on jock taxes also has this good illustration of how this would have worked with Golden State Warriors star Steph Curry for the 2018-19 season.

See the nearly $35,000 going to Wisconsin from his one game vs the Bucks? Steph’s accountant is subtracting those taxes paid to other states from Curry’s $35 million tax bill to California, and conversely, Cali just got 4 days of income taxes from the Brewers players after their weekend series in San Diego.

Ironically, given the $12 million income tax bump that Vos is referring to, and then looking at how much player salaries have grown in MLB, maybe that wouldn’t end up being much different than $290 million over 20 years from the state side. Also ironically, if GOPs like Vos get their wish for lower tax rates on the rich, that would lessen the added revenue that Vos claims would be part of the state’s share.

Paradox, or a way to lower the subsidy?

WisPolitics says Vos compared the potential final Brewers package to the 2015 deal that got FiServ Forum and the Deer District built for the Bucks, where local governments chipped in on the costs.
Vos said the Brewers leaving would also have an impact on the city, county and region, and a final deal could potentially have them involved.
Evers’ $290 million payment was part of the 2023-25 state budget, and Vos mentioned to WisPolitics that a Brewers deal may still be in the budget, even though it would take a different form.
Vos said the plan is to run the Brewers bill in tandem with the budget. Evers had proposed including the plan in the two-year document. Insiders say pulling it out may complicate the path to passing a proposal in both houses.
But if it’s part of the overall budget, then the overall budget bill would be filled with too much GOP stuff to make any Democrats support it, and would mean that outstate Republicans vote for a Brewers subsidy that may not prove popular with their constituents (hi, George Petak!).

That might make a standalone bill more realistic, and offers a rare chance for legislative Dems to have input on what ultimately happens.
Typically, Republicans in both houses only pass bills that have enough support from their caucus alone.

Vos, though, said he would allow the Brewers stadium bill to pass with bipartisan support, like the Fiserv Forum bill in 2015. That bill passed the Assembly 52-34 with 35 Republicans voting for the deal. It cleared the Senate 21-10 with 15 GOP votes.
So two tracks to look at with the Brewers stadium bill.

1. How is it paid for, and for how long is both the Brewers lease and the funding for the stadium?

2. Standalone bill, or part of the budget?

And much like the Brewers 11-5 start, what we’ve seen so far in 2023 does count when it comes to the Brewers stadium. But there is so much more left to figure out and deal with.

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