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Editorials
Keep the market free – no tax money for Bucks PDF Print E-mail
News
Written by Ozaukee Press   
Wednesday, 25 March 2015 19:42

The Milwaukee Bucks NBA franchise is a profitable business that should not expect charity from taxpayers in funding a new arena

The taxpayers of Wisconsin should pay a large part of the cost of a new arena for the Milwaukee Bucks.

    That is an utterly absurd statement, yet a number of people, including the governor, state legislators, officials and business leaders of Milwaukee and the owners of the Bucks are repeating it with no joke intended.

    There are good reasons it should be taken as a joke:

    The Milwaukee Bucks National Basketball Association franchise is a private, for-profit business, with emphasis on the word “profit.” In less than a year, the team’s new owners have already made $50 million on their investment. They bought the franchise for $550 million; today it’s worth $600 million, according to Forbes magazine.

    The team’s owners have offered to pay only $150 million of the estimated $500 million cost of a new arena. Lack of the means to pay for the building in which to operate their business is not the reason. Among the wealthy group of investors who own the Bucks are two hedge-fund billionaires, Jamie Dinan and Marc Lasry, who are on the Forbes magazine list of the 400 richest Americans, with net worths of $2.4 billion and $1.9 billion respectively.

    Politicians who invoke the sanctity of the free market when justifying government cutbacks are saying that in this case it’s perfectly all right for government to interfere in the market and have taxpayers subsidize the arena that the Bucks’ free-market-capitalist owners need for their business.

    These include Gov. Scott Walker, who has proposed that the state borrow $220 million to help pay for the arena, and legislators who think that will amount to a bit too much debt, but are suggesting that the state will somehow be able to come up with at least $100 million.

    Yes, this sounds like a joke, but no one is laughing because cities and states across the country have fallen for it, leaving taxpayers on the hook for billions of dollars. Since 1985, more than $17 billion has been raised with tax-exempt bonds—the kind Gov. Walker has proposed issuing—to subsidize professional sports facilities.

    Investors who buy the bonds don’t pay taxes on the interest they receive, but taxpayers have to pay the interest and repay the principal. With the tax-exempt bonds, not just local taxpayers, but all American taxpayers, end up subsidizing the facilities. The Treasury Department says bonds for sports facilities have cost the federal government $542 million in the past decade, and is proposing barring their use.

    In its proposal, the department said funding pro stadiums and arenas with tax-exempt bonds has “shifted more of the costs and risks from the private owners to local residents and taxpayers in general.”

    Walker’s proposal calls for paying the bonds’ interest and principal with income tax revenue paid to the state by NBA players. This doesn’t make the subsidy some sort of free money—the players’ income tax payments diverted to the arena would be revenue the state would not have to support services for its citizens.

    The whole exercise is based on the premise that if the Bucks don’t get a new arena, they’ll leave Milwaukee, dealing an economic blow to the city and the state.

    The premise might be half valid. The NBA has threatened to take over the team and pull it out of Wisconsin if a new arena isn’t built. That could happen. The NBA is powerful enough to be ruthless. It thrives on television revenue. If Milwaukee doesn’t come through with a new venue, it would be happy to shop the Bucks around for a bigger market.

    The part about the big blow to the economy, however, is dubious.

    In study after study, economists agree government subsidies for sports do not pay off in economic benefit. One of them, Dennis Coates, a University of Maryland economist who specializes in the pro sports business, put it succinctly to the Wall Street Journal: By subsidizing sports facilities “you’re not going to get income growth; you’re not going to get tax growth; you’re not going to get employment growth.”

    We don’t blame the power structure of Milwaukee for pushing for a new arena. It would be a shame if the Bucks left town, an affront to the city’s pride and prestige and an insult to the fans who have supported the team through thick and thin for decades.

    But preventing that is not the responsibility of taxpayers. It is the responsibility of some of Milwaukee’s newest corporate citizens, the owners of the Bucks.

    It’s time for these masters of the financial universe, these bold investment buccaneers, to exercise the prerogatives of the free market and pay for the building that houses their business—like the rest of the folks competing in the free market do.



 
Kill the ethanol tax PDF Print E-mail
News
Written by Ozaukee Press   
Wednesday, 18 March 2015 15:41

Bad on all counts, the ethanol mandate deserves death at the hands of Congress now because it takes money out of the wallets of American families

Here’s a head-scratcher for you: A few politicians are still defending a government mandate that takes money out of the wallets of American families, damages the environment and sets back efforts to feed the hungry people of the world. How can this be?

    Here’s a clue: It’s a matter of location. If a politician is in Iowa, it’s apparently OK to support the ethanol mandate. We learned that from Wisconsin Gov. Scott Walker, who announced when in that state recently that he now favors the federal government biofuel requirement that he had long opposed.

     No head-scratching needed here. Walker was in Iowa looking for votes as a Republican presidential candidate. Iowa grows a lot of corn used for making ethanol and is the country’s largest ethanol producer, so it is not a good place for a politician to be telling the ugly truths about a costly and useless government mandate.

    Elsewhere not even political expediency can justify support for forcing ethanol on American drivers. The mandate that now requires 13 billion gallons of corn ethanol to be added to the gasoline supply each year was imposed in 2005 with the express purposes of reducing dependence on imported oil and protecting the environment. It is no longer needed for the first and has failed at the second.

     America is on the verge of becoming the world’s biggest oil producer. It doesn’t need to turn food into fuel to reduce the amount of fossil fuel it imports. As for the environment, the process of ethanol production demands so much fossil fuel that using the product accounts for no significant net reduction in carbon emissions.

    It’s not just that ethanol is no help to the environment—it actually hurts it. The rise in corn prices caused by the government-mandated demand for ethanol has led to the conversion of grassland, wetland and fields used for crops less damaging to the soil than corn for the production of the heavily fertilized raw material of ethanol.

    The fundamentally flawed concept of using food to power automobiles has had a damaging impact on the supply of food needed to sustain human beings. With about 40% of the American corn crop diverted to ethanol production, corn prices have risen, driving up the cost of food in the U.S., while hampering hunger relief efforts in famine-ravaged countries.

    Though the ranks of defenders of ethanol have shrunk to a stubborn few, Congress has not been able to get its act together to kill the mandate. It might help if the word “mandate” were changed to “tax.” That should get the attention of representatives who have expressed hatred for taxes in any form. Besides, it would be accurate.

    The ethanol tax extracts $10 billion a year from American motorists, according to Robert Bryce, author of “The Hidden Corn Ethanol Tax,” a report issued by the Manhattan Institute.

     Bryce bases his calculation on the fact that gasoline containing 10% ethanol yields 3% to 4% fewer miles per gallon than pure unleaded gasoline, but costs more at the pump. The result is that $10 billion tax levy, which penalizes the average driver an added $47 a year in fuel costs.

    What will it take to get Congress to put an end to this nonsense? A taxpayer uprising might help, but unlike the Boston Tea Party, pouring the object of the tax in the water is not an option in this case.

    Still, optimists may find some cause for hope in the fact that a respected bipartisan group of three senators and three House members have introduced legislation to repeal the ethanol mandate.

    Save for a few representatives beholden to interests enriched by ethanol in their states, there is no excuse for anyone in Congress not to support that effort.

    Speaking of excuses, a burning desire to be endorsed by the Iowa presidential nomination caucuses doesn’t cut it as an acceptable reason for a governor who has built his resume as a crusading conservative by condemning federal mandates in health care, transportation and education to now declare that the ethanol mandate is perfectly acceptable.


 
When land preservation is good business PDF Print E-mail
News
Written by Ozaukee Press   
Wednesday, 11 March 2015 16:13

County’s purchase of lakeshore land for a nature preserve comes with a bonus–it’s a key to desirable development

The vote by the Ozaukee County Board last week on funding for a nature preserve was a tonic for a public jaded by the recurring spectacle of legislative bodies rendered dysfunctional by partisan rancor and entrenched ideology.

    Though technically non-partisan, the County Board has pronounced divisions between conservative and liberal members that are evident in debates on a number of issues. Yet on a measure that will mean spending up to $1 million of taxpayer money on an initiative that expands the reach of county government, the board came together to vote yes by an overwhelming 18-4 majority.

    The impact of the vote will be enormous: It will save 101 acres of lakeshore land from private development, make more than a mile of Lake Michigan beach and bluff and adjacent forest land available for public use in a new county park and pave the way for a desirable conservation subdivision.

    The City of Port Washington is expected to match the county’s investment in the park land, which will facilitate a development along Highway C called the Cedar Vineyard, consisting of 73 modestly-scaled homesites next to the nature preserve and an associated vineyard and winery.

    The fact that the nature preserve is a key to the development enhanced the appeal of county ownership of the lakeshore property. In praising the move to protect the land for public use, Supr. Dan Becker noted that it was also “an opportunity to make a real difference and be a catalyst for growth in Ozaukee County.”

     The relationship between land preservation and growth is more direct than usual in this instance, but environmental benefit and economic benefit frequently go hand in hand in conservation efforts. Many of the natural areas protected in Wisconsin are popular recreational attractions and thus important assets for the state’s tourism industry. Natural areas are so appealing as contributors to the quality of life that in many cases they stimulate nearby development—people like to live near the beauty of nature.

    All of which underlines the mistake Gov. Walker is making in calling for a moratorium on land acquisition by the Knowles-Nelson Stewardship Fund. The fund was expected to pay for most of the cost of acquiring the Cedar Vineyard nature preserve, but now that is unlikely. Had the county not stepped up, the opportunity would have been lost.

     The City of Port Washington should know all about the value of park land as a stimulant to economic development. Its protection of water views and access around the marina in the stunning Rotary Park and harbor walk fostered the revival of the downtown and the growth of its thriving tourism economy.

    It is no wonder, then, that so many Port residents doubt the wisdom of the city government’s ongoing effort to sell publicly owned land at the north end of the downtown marina for commercial development.

    Which prompts the question: What’s wrong with this picture? While Ozaukee County is buying land to give the public access to Lake Michigan south of Port Washington (with the city likely to match the county’s investment in the land), city officials at the same time are trying to sell public lakefront land and views downtown for business use.

 
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