House tax chair: Roll back Minneapolis taxes

Rep. Greg Davids, R-Preston, says he thinks the hospitality taxes that pay for Minneapolis Convention Center debt and other activities in the city ought to be ended.

A bill he introduced today would shut off half-percent sales taxes, downtown liquor and restaurant taxes and hotel taxes, as of 2020. That’s when the bonds on the convention center are expected to be paid off. Here’s a primer on the issue from last year’s city budget.

The taxes are expected to raise about $51 million this year and the city has offered about $13 million a year of that to a future Vikings stadium — although they only have about $11 million on hand, in present value. The biggest chunk of the money right now goes to pay for convention center debt, about $21 million this year, according to a financial analysis before the City Council.

Davids wouldn’t say outright whether he’d give the city a reprieve if it committed to a Vikings stadium. “That’s a separate issue,” Davids said in an interview today. But he did suggest that an alternate use might be acceptable.

Said Davids, in explanation:

I came across a tax that was, I felt, it was overtaxed, if you will. And I don’t really want to go to the slush fund business. But it’s more than they needed. And so we need to monitor this at the state level and say hey there’s plenty in there for what it was supposed to be for so let’s back off on it and give the people of Minneapolis some relief.

Minneapolis mayor R.T. Rybak has suggested this very scenario, warning that the city is at the Legislature’s mercy when it comes to the hospitality taxes.

Davids says he expects to hear more when his bill comes up for a hearing Thursday.

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