RACINE COUNTY — Racine County taxpayers have been contributing 0.1 percent in sales tax to the Miller Park taxing district for the past 22 years, but residents are now in the final months of the tax.
The county does not have a county sales tax. As of today, there is no plan for the county to institute a sales tax.
MT Boyle, chief of staff to Racine County Executive Jonathan Delagrave, said it’s likely that country residents will have their sales tax decrease by 0.1 percent.
But if the County Board wanted to add the tax, it wouldn't be the first time a Wisconsin county did so.
Mike Duckett, executive director for the Southeast Wisconsin Professional Baseball Park District (also known as the Miller Park district), points to Brown County, which instituted a sales tax to help pay for renovations at Lambeau Field in 2003, as an example of what could happen in Racine and Waukesha counties, which currently do not have county sales taxes.
Brown County instituted a 0.5 percent sales tax for Lambeau Field, Duckett said. After that sales tax was retired, the County Board reinstated the sales tax.
“Racine and Waukesha are two of the handful of counties that have not imposed that tax,” Duckett said. “The (Racine) County Board wouldn’t even have to really wait for the 0.1 percent to go away. They could impose that 0.5 percent any time they want.”
While some residents might groan at the idea of the County Board creating a sales tax, Duckett said the Miller Park tax is set to sunset according to plans.
“The light at the end of the tunnel is getting brighter than ever,” Duckett said. “We’re expecting that our report this year is going to be similar to the reports that we’ve gotten over the last four or five years which tell us that we’ll have enough funds (to retire the tax) by late 2019 or early 2020.”
The Baseball Park District is expected to get a report from PFM Financial Advisors in March.
“We’d pay off all of our future debts in advance,” Duckett said. “If you owned a home and had a 30-year mortgage, that’s what we have with Miller Park. We actually have a 30-year mortgage but here we are in about year 20 looking to pay it off in full.”
The sales tax has been a major funding mechanism to pay back debt on construction, property insurance premiums and large expenditures.
In 2018, Racine County contributed about $2.9 million in sales taxes to the Miller Park district, which is the highest number for a single year for Racine County, said Duckett.
Another way of looking at it, Duckett said, is each resident chipped in about $10 for Miller Park.
Although the Wisconsin Department of Revenue doesn’t have the exact amount Racine County has been contributed to the Miller Park district over the years, the total is likely to be $48 million to $50 million of the total $569 million.
Aside from the Miller Park tax, Duckett said the only other revenue the district receives is $1.2 million from the Milwaukee Brewers for rent.
Funding for future expenditures
Although the Miller Park tax is ending, the district is hoping to have enough money saved for future obligations.
The Miller Park district has two escrow accounts to handle finances in the future.
The first escrow account will be used to pay for debt that could not paid in advance.
“You have to make the payments when the payments are due, over time,” Duckett said. “There will be adequate funding in that escrow account to meet the future payment needs, per debt.”
The second escrow account will be used to pay “other district obligations.”
“Probably the best example is we need to pay our property insurance premium every year,” Duckett said. “We don’t know what the premium is going to be in two years, much less five or 10 years. But we have to have adequate funds set aside to make that property insurance payment.”
The Miller Park district is planning on having an additional 10 percent to 15 percent of what officials think they will pay in property insurance as a contingency for any financial shortfalls.
“If there’s any money left in that contingency that the district holds, that money gets returned to the five counties,” Duckett said.
As part of the “other district obligations,” the district makes contributions to a segregated reserve fund which totals $2.5 million each year. That money is used for major capital expenditures for Miller Park.
Duckett said the district contributes $1.75 million and the Brewers contribute $750,000.
One such purchases for which that account will be used, Duckett said, will be for a new LED ribbon board inside Miller Park.
The funds in each of those escrow accounts, Duckett said will likely need to last until the end of the lease on the property which is around the year 2040.
Miller Park tax legacy
During the 2018 season, Brewers fans saw a team that finished just one victory short of the World Series. Considering that, it might be difficult for some to recall the heated arguments over the Miller Park tax during the mid-1990s.
“I call it a good ol' Wisconsin barstool argument,” Duckett said. “You can sip a pitcher of beer and talk all day. Is a professional sports team the right thing for a community? And does it economically benefit the community?”
During the 1995 debate on the Miller Park tax, state Sen. George Petak, R-Racine, cast a key vote on Oct. 6 of that year in favor of the tax. That vote was critical in securing financing for the ballpark, and it ended up costing him his seat: He lost a June 4, 1996, recall election to Democrat Kim Plache of Racine.
Duckett says he sees both side of the argument over using public funds to finance a sports arena; however, he added, about 45 percent of fans who came to Miller Park last year were from outside the five-county area which comprises the Baseball Park District.
“It’s bringing people to southeast Wisconsin that otherwise probably wouldn’t have visited southeast Wisconsin,” Duckett said. “Not unlike Lambeau Field. Think about all the fans that converge on Green Bay on a Sunday home game.”