SBD/May 17, 2013/Facilities

Minnesota Governor Targeting Tax On Smokers To Help Close Vikings Stadium Funding Gap

Raising a cigarette tax could help with the state's funding of the stadium
Minnesota Gov. Mark Dayton on Thursday proposed a "bailout" of the Vikings' new $977M stadium by raising taxes on smokers and closing a loophole for businesses as a "hedge against the limited success of electronic gambling games that were supposed to help build the sports palace," according to a front-page piece by Jim Ragsdale of the Minneapolis STAR TRIBUNE. Minnesota Revenue Commissioner Myron Frans said that the state's $348M contribution to the stadium could be "guaranteed by raising the cigarette tax on existing inventories to obtain $24.5 million of revenue in the first year." That would be "coupled with a long-term, $20 million-per-year capture of revenue from what Frans described as the closure of a corporate 'tax avoidance loophole.'" The new plan is "needed because electronic pulltab and bingo games selected last year to pay for the state’s portion of the downtown Minneapolis stadium have fallen far short of projections." Frans said that the cigarette revenue would "give the project an immediate boost," while the corporate tax change would be "available in the future, should game revenue continue to underperform." Frans: "We believe it’s reliable, it’s consistent and we know over time it’ll be there." The plan was "accepted in principle by those legislators writing the tax bill." The stadium announcement is "part of the deal making in the final days of the session" (Minneapolis STAR TRIBUNE, 5/17).

PLANNING AHEAD: Frans said that the new revenue Dayton is proposing "already was in the budget plans of the House, the Senate and Dayton himself." In St. Paul, Doug Belden notes the new part is the "revenue would be directed toward stadium construction." Frans said that "because it's all 'new money,'" it "doesn't violate the governor's pledge that general fund money would not be used to pay for the stadium." Dayton "raised his proposed cigarette tax Thursday to $2.52 per pack." Frans said that this would "yield a stocking fee of about $24.5 million." Frans added that the $24.5M would be "used to eliminate" an estimated $12M deficit "in the stadium reserve the next two years and be available for future needs" (ST. PAUL PIONEER PRESS, 5/17).
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