Scott Walker Signs Arena Deal, Handing $400 Million To Billionaire NBA Owners

The presidential candidate put taxpayer money behind the new arena despite criticism from economists and conservative allies.

Wisconsin Gov. Scott Walker (R) signed legislation Wednesday that commits hundreds of millions of dollars in taxpayer money to a new arena for the NBA’s Milwaukee Bucks, a move that could complicate the Republican presidential candidate’s efforts to paint himself as the most ardent small-government conservative in a crowded field.

Walker and state GOP leaders pushed the arena plan for months, especially as the team's owners threatened to move the Bucks to a new market. The deal requires the team's current and former owners to cover half of the arena's $500 million projected cost, while taxpayers will cover the rest -- with interest, the public cost could rise to as much as $400 million. But at the signing ceremony Wednesday, Walker repeated claims that the arena would return $3 for every $1 invested into the project.

"We think this is a good, solid move, as good stewards of the taxpayers' money," Walker said. "I think anybody investing in the world of small business would say that's a good return on investment."

Walker's signature should be enough to keep the Bucks in Milwaukee. But even as he argued that would save the state revenue in the long run, Walker's plan drew pointed criticism from some of his typical political allies.

The Wisconsin chapter of Americans for Prosperity, the conservative group backed by the Koch brothers, slammed the plan earlier this year, arguing that “government shouldn’t be in the business of financing private sports stadiums.” Other conservative groups and blogs also criticized the deal. The arena plan also drew national criticism because it came at the same time that Walker's budget cut $250 million out of Wisconsin's public university system.

This is not the first time Walker has thrown public funds into a sports facility. In 1995, he backed a plan that raised sales taxes on residents of the Milwaukee area to help finance a new stadium for baseball’s Milwaukee Brewers. The tax was originally scheduled to sunset in 2010, but because of funding shortfalls from lower-than-projected revenues, analysts now expect it to remain in effect until 2020.

Walker answered questions about the criticism at the ceremony, reiterating that the new arena would save revenues and bring economic benefits to the city and the state.

"If you do it right, this isn't pie-in-the-sky economic projections that you sometimes hear in these sorts of projects," he said, adding that the state would lose $6.5 million annually without the team. "This is direct dollars the state of Wisconsin gets."

Stadium finance experts, however, have questioned those claims. Sports economist Victor Matheson, a critic of publicly financed stadium deals, told The Huffington Post in June that the plan amounted to "sports extortion" due to the team’s threats to move if it did not receive taxpayer money.

Two members of the Bucks' ownership group donated $200,000 to the super PAC backing Walker’s presidential campaign, Bloomberg reported Tuesday.

This story has been updated with comments from Walker's press conference.

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