Non-elected Board Jacks up Taxes with Little Public Notice, No Public Input

The poorly-managed properties of the Wisconsin Center District (The little-used Milwaukee Theatre, The U.S. Cellular Arena and the Midwest Airlines Convention Center) are facing a 19 percent decline in revenues and therefore have racked up a $4 million deficit.

Rather than looking at cutting staff, streamlining operations and/or examining other ways to cut their costs, the Wisconsin Center District Board decided (with little public notice and NO public input) to double their tax rate from .25 to .50 percent on food and beverage purchases in Milwaukee County.

OPM. Other People’s Money. Better than MagicPutty ™ simply use OPM to plug any leaky publicly-funded operation. No fuss. No mess. Especially when, as an non-elected body, you have no constituency to worry about angering.

A full twenty percent of the Board wasn’t even present for the vote. Twelve of the Board’s 15 members voted on the plan with only Wauwatosa Mayor Jill Didier, and the Commercial Association of Realtor’s Jim Villa voting no. Both were appointed to the Board by Milwaukee County Exect Scott Walker (For full disclosure, I’llĀ  note that not only have I known Villa for more than 10 years, we are friends and former business partners although I have not spoken with him about this matter ).

VotingĀ  in favor of the tax were Franklyn Gimbel, the Board’s Chairman; Milwaukee Aldermen Willie Hines, Ashanti Hamilton and Terry Witkowski; W. Martin Morics, the Milwaukee city comptroller; Joel Brennan of Discovery World; restaurant owner Jack Weissgerber; John Burke, of Burke Properties; James Kaminski of Kaminski Consultants; and Stephen H. Marcus of the Marcus Corp.

The Marcus Corp. Owner of the Milwaukee Hilton. Hmmm.

Fox 6 in Milwaukee reported on this outrageous development and included a brief interview with me. Here’s their story.

Oh, and the District Board promises the tax will sunset. But they do not have a firm date set for the tax to be repealed.

As long as the Wisconsin Center District maintains its current make up, don’t hold your breath for that rescission decision.

As bad as this news is, it could have been worse. According to the Milwaukee Journal Sentinel:

The board also rejected, on an 8-4 vote, a proposal suggested by Marcus to increase the countywide hotel tax from 2% to 2.5% to raise an estimated $375,000 next year to be added to the Visit Milwaukee budget.

Good grief.

Besides Marcus, Hamilton, Weissgerber and Hines voted in favor of raising the countywide hotel tax.

The board also agreed to move $1.45 million from the district’s reserve fund to the district’s general fund as a means of balancing the budget. Gimbel said the measures to raise the food and beverage tax and move money from the reserve fund were intended to address severe budget problems.

Through Oct. 31, the district reported net income of just over $60,000, more than $2.2 million below what had been anticipated.

The main culprit is the abrupt drop in tax revenue. The district receives no property-tax money or state subsidies. Instead, it generates revenue from operating revenue and special taxes. Within Milwaukee County, the district collects a 2% room tax, a 3% car-rental tax and the soon-to-be 0.5% food and beverage tax. In addition, it also receives a 7% hotel room tax formerly collected by the City of Milwaukee.

The tax revenue is used for bond payments for the improvements at the Midwest Airlines Center and support for Visit Milwaukee, the region’s major tourism and convention group. The revenues generated by the Midwest Airlines Center, the U.S. Cellular Arena and the Milwaukee Theatre are used for all operating expenses.

Collections for the two hotel taxes are each off 21%, district officials said. The car-rental tax is off 20%, and the food and beverage tax is off 5%.

We’ll have more on this boondoggle in the days ahead, including a closer look at who serves on this board, who appointed each member, potential conflicts of interests with certain members, how the district properties are managed and what, if anything, can be done about this appointed board that has seemingly unchecked authority to raise your taxes at a time when families are facing the toughest economy in generations.

By Brian Fraley
A MacIver Perspective