CHICAGO - Wisconsin Gov. Scott Walker's administration rejected a proposal by the Menominee Tribe to cover $220 million in state funding for a new Milwaukee Bucks basketball arena, in exchange for rights to build a new casino.
The tribe floated the offer in an attempt to resurrect its plans for a new $800 million casino in Kenosha, just over the Wisconsin-Illinois border. Walker last month shot down the tribe's casino plan after a lengthy review over concerns it would jeopardize the state's budget.
Menominee Chairman Gary Besaw and Hard Rock International chairman Jim Allen announced the offer Feb. 10, promoting it as a means to free up funds for the state budget and possibly stave off proposed cuts in higher education funding. Walker's administration quickly said the governor's decision on the casino was final.
The proposal offered payments over a 25-year period and the tribe also offered to increase the size of its bond posting to cover state losses in revenue from other tribal casinos. Hard Rock would build and operate the casino.
A recent state report found the new casino would generate positive economic benefits of $600 million and create new jobs but those perks don't outweigh the risks, Walker said in rejecting the original proposal.
"After a comprehensive review of the potential economic impact of the proposed Kenosha casino project, the risk to the state's taxpayers is too great," Walker said, pinning the blame in large part to provisions included in existing gambling compacts negotiated by his predecessor, Democrat Jim Doyle.
"Due to the compacts the current cost to taxpayers of approving the proposed casino project is up to $100 million and the long-term economic hit to the state budget would be a potential loss of hundreds of millions of dollars," Walker warned.
Terms of the compacts would leave the state at risk of litigation from other competing tribes that could force the state to return portions of past compact payments, he said.
Walker has included his proposal to issue up to $220 million of state appropriation-backed bonds to help finance the Bucks arena. With interest, the overall cost of repayment would reach about $380 million. The state would tap growth in income taxes paid by the team and visiting players to cover repayment.
The team's current and former owners are expected to contribute $250 million and another $50 million could be sought from local governments including the city and Milwaukee County. The Legislature has not voted on the measure.
