Can charities say no to Vikings stadium deal?
The folks that may be footing part of the bill for a Vikings stadium are raising questions about whether they'll show up for kickoff.
Allied Charities of Minnesota is the trade group for Minnesota's $1 billon charitable gambling industry. Executive director King Wilson says they paid about $37 million in taxes on their proceeds last year -- nearly half of the charities' take, in some cases, Wilson says. (That's him at left, with an electronic pull tab machine.)
The trade group originally pitched an expansion of their operations into electronic pull- tabs to put more money on their bottom line, only to find the idea appropriated to fund a Vikings stadium.
Metropolitan Sports Facilities Commission chairman Ted Mondale said today that the state could easily pay debt service on $400 million in stadium bonds with the marginal taxes on new electronic pull tabs. State revenue experts put the proceeds at $72 million a year.
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Doubters have questioned that, in part because Minnesota would be the first state in the nation to implement the devices for gambling. There isn't necessarily a lot of history to base projections on. But Mondale said today the debt service would only use a little more than half that figure -- suggesting there's room for error.
But he also questioned why gambling operators should get a tax break when they're making more money.
Wilson responds thusly: He says the extra business could push charities into a higher tax bracket -- nearly 7 percent of their sales. On top of an 85 percent prize payout to keep players coming back, Wilson says there isn't enough left to cover expenses and pay anything to beneficiaries like youth sports.
"We're just not convinced, without some significant tax relief and reform that these are economically viable and that they'll work," he said. "I sent an email alert out last night, and I got several folks that got back to me, basically saying that if we don't get tax relief, we're not going to do the (electronic) pull-tabs."
But he's not backing down, either: "It appears to me to be clear that that the administration isn't open to tax relief. That's their perogative."
And it sounds like chartiable gambling operators may be begging to differ as the stadium endgame approaches at the Capitol.