MILWAUKEE— Miller Park tax district officials are hedging that the 0.1 percent sales tax won’t go into extra innings and expect to end the controversial revenue source in March 2020.
Every year for more than two decades, the board members of the Southeast Wisconsin Professional Baseball Park District have been receiving updates on where the district is in the process of retiring the tax. On Tuesday, the district board met to map out what is hoped to be the final year of the tax, which funded construction of Miller Park, home of the Milwaukee Brewers. The stadium opened in 2001.
David Anderson, director of PFM Financial Advisors, said assuming no dramatic decline in sales tax receipts, the district will have accumulated sufficient funds in late 2019 or early 2020 to begin the sales tax retirement process.
“This is finally the time to be saying ‘Yes, it’s closing down,’" Anderson said. “As we’ve gotten closer and closer (to the end), the number of variables have just been reduced or eliminated. Right now the only variable that could impact anything is the collection of sales tax.”
Don Smiley, chairman of the district board, said that after March 2020 the district will have placed enough funds in escrow accounts to meet its future contractual obligations.
“Baring severe unforeseen circumstances, all indications are that the district will be in a position to certify the end the 0.1 percent Miller Park sales tax at its meeting of March of 2020,” said Smiley, a Racine native who also is president and chief executive officer of Summerfest and a former president of the Florida Marlins, a Brewers rival in the National League.
Mike Duckett, executive director of the district, said taxpayers “can finally see the end of the tunnel.”
“It feels awesome,” Duckett said. “(The tax) is a big lightning-rod issue and it’s a very emotional issue. And I think everybody can, and should, take pleasure in the fact that we’re this close to an end and looks fairly certain.”
Racine County and four other southeast Wisconsin counties — Milwaukee, Waukesha, Ozaukee and Washington — have been contributing to the Miller Park tax since 1996.
The district has $38.7 million in debt payments that need to be put in a “defeasance” process, a complex legal proceeding that will officially retire the debt.
If the district receives sufficient sales tax receipts in December 2019, which the district will actually receive in January, then it can begin the process to retire the tax.
If the December sales tax distribution is not enough to cover the district’s $38.7 million debt, then the tax will be carried over into January 2020.
Either way, it’s expected that the 0.1 percent sales tax will be put to bed by March 2020.
But even if the district claims it has collected enough money to last until 2040, it will be up to Peter Barca, secretary of the state Department of Revenue, to officially “turn off” the sales tax.
Until the Department of Revenue officially ends the tax, it’s possible the 0.1 percent tax could remain be in place. If that is the case, it will be up to the Department of Revenue to decide what to do with the money. It’s possible it could go back to the affected counties.
In 2018, Racine County contributed $2.9 million to the district, or about 9 percent of the more than $31 million collected in total.
When broken down even further, the district estimates that residents each paid on average $12 last year toward the Miller Park tax.
Miller Park upgrades
At the meetings on Tuesday, the district’s operations and finance committees approved three projects through its segregated reserve fund — a new LED ribbon board, repairing the “out-of-town” score board, and repairs to one of six flat roof segments.
The out-of-town scoreboard is in left field at ground level, and displays scores from around Major League Baseball.
In 2006, an LED ribbon board was installed around the ballpark for $3.1 million at the time. The team was forced to install the board under a “75 percent” rule which, in essence, forces teams to make upgrades at their ballpark if 75 percent of other ballparks have made the upgrade.
Duckett said the 75 percent rule was written in the district’s memorandum of understanding with the state, Milwaukee County, the City of Milwaukee and the Brewers.
Now, as the LED ribbon board heads into its 14th season, district officials are concerned about its condition. If the board fails during this Brewers season, it cannot be replaced until after the season is over.
Because of infrastructure currently in place, the district will only be spending $2.1 million to replace the board. The materials will be put together during this season and replacement is to take place after the 2019 season.
Miller Park also has six flat roof segments that have been leaking. Buckets have been placed to collect water leaking through those roofs. The segment above the ballpark offices will cost about $140,000 to replace. The cost to replace the other segments ranges from $100,000 to $120,000.
The money collected from the sales tax goes toward payment of premium property taxes, maintenance and upgrades to the stadium. When the sales tax is over, the only revenue the district will receive will come from the Brewers, who pay $1.2 million in rent each year.
Through the existence of the tax, the district has been preparing for its retirement by saving money to last until about 2040. That means any large upgrades — such as the center-field scoreboard which is expected to be replaced in about 2027 — will be paid for out of an escrow account.
The district anticipates having to replace the soon-to-be new LED ribbon board again in about 2033.
The district board is scheduled to meet again in June.