Brian Bakst, Associated Press, Published March 06 2012
UPDATED: Vikings stadium bill writers mull backup financingST. PAUL, Minn. — Minnesota lawmakers crafting a Vikings stadium bill are discussing whether and how to include a backup funding plan in case proceeds from gambling in bars doesn't adequately cover a needed state contribution, prominent lawmakers said Tuesday.
The hang-up is one reason why legislation for the nearly $1 billion football stadium won't become public earlier than Monday. That's more than 10 days after city, state and team officials celebrated a handshake deal to build their treasured franchise a new home.
The difficulty turning a term sheet into actual legislation is but one challenge ahead for the Vikings stadium effort. The session clock is working against advocates: Lawmakers expect to adjourn no later than April 30, and a gauntlet of time-consuming committee and floor votes stands between the bill and Gov. Mark Dayton's desk.
The House sponsor, Republican Rep. Morrie Lanning, acknowledged that “time is short” and said that negotiators are still working through key details, including the security of the state financing.
“We've recognized all along that it could be an issue. That's one of many things that has to get sorted out,” said Lanning, of Moorhead. “Some people may want more comfort than what might be readily available.”
Neither Lanning nor others involved in the project will disclose what backup sources they prefer.
The financing blueprint splits the construction costs three ways: $398 million from the state, $427 million from the Vikings or other private sources and $150 million from the city of Minneapolis, where the stadium would be built.
Under the stadium framework, the state would get its share by allowing charitable groups to shift from operating paper pull-tab games to electronic forms of the game of chance. The state Department of Revenue estimated recently that the pull-tab expansion would generate about $72 million a year in new tax revenue to the state.
That would seem to leave plenty for the $35 million a year that stadium supporters say would be needed to cover the state's bond payments. However, bond investors typically seek assurances that revenue coming in will be well more than the annual debt and interest owed, sometimes as much as double that amount. That's especially true with bonds like those eyed for the stadium, which won't be backed with full state taxing authority.
In addition, the charities that would run the new electronic games say they are expecting to see tax rates on their profits lowered, further cutting into the main funding stream. King Wilson, executive director of Allied Charities of Minnesota, said without tax relief it may not be worth the hassle for some charities.
“Charities are questioning whether they will even do the electronic pull tabs,” Wilson said. “We don't think electronic pull tabs without tax reform and relief are economically viable.”
Sen. Julie Rosen, R-Fairmont, the bill's lead Senate sponsor, said several commissioners in Dayton's administration have convinced her that the pull-tab revenue estimates are sound.
“They ran those numbers once, two, three, four times and they're very confident those are actually conservative numbers,” Rosen said.
But she admitted there is concern in some quarters that a backup financing plan should be crafted that could “blink on” in the event the gambling tax revenue comes in lower than expected.
“Is there some kind of blink-on thing that would give people comfort?” Rosen said, describing the content of the private discussions between lawmakers working on the bill.
Meanwhile Tuesday, hundreds of construction workers roamed the Capitol hallways as they lobbied lawmakers to act on a stadium plan and other building projects vital to their industry. Many were decked out in reflective vests, hardhats and purple-and-gold “Build It” buttons.
Kenneth Jensen, a heavy machine operator from Blaine, said the firm he works for is too small to bid on stadium work. But the project is so big, he said, it would likely consume many larger firms for several years and open up other jobs for workers all over the Twin Cities.
“We need it,” said Jensen, 54, who said his yearly income plummeted from $70,000 to $40,000 in the five years or so since the housing market went bust. Jensen said that started to turn around more recently mostly thanks to projects funded by federal stimulus dollars, but now those are drying up too.
“Any investment in jobs right now is worth it,” he said.
Copyright © 2012 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.