Public Policy Forum Blog

The Show Must Go On?

Late last year, the Public Policy Forum released Pulling Back the Curtain, a report that identified and quantified the operating and facility needs of Milwaukee County’s cultural and entertainment assets. 

Today, we release the second installment of our research – The Show Must Go On?which explores a logical follow-up question: If there is a desire to pursue additional public investment to meet the needs identified in our 2013 report, then what are effective options for doing so?

Our research shows this question is not as simple as it may sound. In fact, after reviewing five metro areas that have engaged in similar debates, we suggest that leaders here will need to think carefully not only about the type and amount of tax that will be required, but also about which institutions should be publicly supported; whether public support should be ongoing or time-limited; and whether the debate over the funding needs of important regional assets should give way to a loftier discussion about the way we finance local government in general.

To help illuminate those issues, we use the experience of the five metros to model four distinct dedicated funding approaches and their hypothetical application in Milwaukee County. We conclude there is no right or wrong approach for Greater Milwaukee, but that the eventual strategy must reflect the Milwaukee community’s unique objectives.

For example:

  • A supplemental funding approach could be pursued if the objective is narrowly geared toward addressing immediate basic operating and/or capital needs of arts and cultural institutions and parks, while leaving existing funding structures largely in place and deferring on the issue of a new arena or expanded convention center.  The report’s modeling indicates that a 30-cent-per-pack cigarette tax or .1% (one-tenth-of-a-cent) sales tax could generate about $120 million over 10 years in Milwaukee County to support this objective.
  • A high-quality public assets approach could be pursued if the objective is to maintain quality and accessibility only for major publicly-owned arts and cultural assets by providing them with dedicated funding that would eliminate their need to compete for resources with other government functions. The report’s modeling shows that a dedicated property tax mill rate of $1.32 per $1,000 of equalized value in Milwaukee County could support that objective.
  • A major capital projects approach could be pursued if the objective is oriented toward financing major capital improvements that hold potential for boosting the region’s image, enhancing tourism, and attracting and retaining talent. The report’s modeling suggests that a .7% (seven-tenths-of-a-cent) sales tax for eight years in Milwaukee County (or a lesser tax if applied regionally) could generate a $692 million package of such improvements in Milwaukee, including a new arena and expanded convention center. 
  • A comprehensive tiered approach could be pursued if the objective is to reform local government finance and structure by permanently replacing a portion of the county property tax levy with a dedicated county sales tax for the publicly-owned parks and cultural institutions. This approach also could be constructed to support a new arena, expanded convention center, and annual grants for the broad array of other arts and cultural entities. The report’s modeling shows that such an approach would require a permanent sales tax of about .75% in Milwaukee County or .35% if applied to a broader five-county region. 

There are several variations of these strategic directions and several possibilities for merging them, and there is also the option of simply maintaining the status quo. We hope that by framing the discussion around these key questions and approaches, however, Greater Milwaukee leaders can clarify their objectives and determine a possible path forward to achieve them.  

Author: 
Rob Henken