Lawmakers take a pass on discount for state share for Vikings stadium

A proposal to trim the state’s $348 million pledge to the new Vikings stadium fell in the House tax committee by a narrow 11-13 vote yesterday during discussions about the House tax bill as it heads for negotiations with the Senate.

Garafalo

Rep Pat Garafalo, (R-Farmington) said he wanted to take $10 million off the state contribution, about a 3 percent discount.

“I want that option at the table,” Garafalo said. “I see absolutely no harm in having this very generous public subsidy package just a little less very generous.”

He suggested the Vikings or someone else could pick up the tab, or the project cost could be reduced.

The tax bill already includes a new sports memorabilia tax and a tax on stadium suites and personal seat licenses, according to committee chair Ann Lenczewski, (DFL-Bloomington). That idea got an affirmation from Gov. Mark Dayton on Tuesday, and is also part of a Senate tax proposal.

But a number of DFLers on the committee said they were loathe to reopen the stadium debate, which occupied much of the attention to the 2012 legislative session.

Rep. Mike Benson (DFL-Rochester) also said that it would set a potentially bad precedent if the state started renegotiating the stadium deal.

“What does that do as far as the private sector and their willingness to come into arrangements with the public sector if unilaterally, in this case the state, chooses to begin changing the arrangements?” Benson asked.

The effort also drew a rebuke from Minneapolis DFL’ers Diane Loeffler and Jim Davnie. Both told the committee that they feared that the third partner in the Vikings stadium funding deal, the city of Minneapolis, might have to fill the $10 million gap. Here’s Loeffler, raising the point:

Minneapolis HAS reported a budget surplus in hospitality tax revenue, above what the city thought it needed to pay for the Convention Center and its share of the Vikings stadium and Target Center renovations. Hennepin County has also said it has enough sales tax revenue to pay Target Field off early. Both the city and county have warned they won’t put more money into the Vikings deal.

Davnie also noted the tortuous route of the Target Center deal struck 19 years ago, when the state initially pledged to rescue the faltering home of the Timberwolves, only to be eliminated by IRS bond rules. Here’s what he told the committee, as he urged his colleagues to defeat Garafalo’s amendment.

Davnie

“Long before I was here, the state stepped up to buy the Target Center and did it badly. And shortly after the legislative session, if I understand the lore around here, the IRS issued a letter explaining to the state that they did it badly, and the statute that was passed could not be executed, and the state could not act to purchase the Target Center, and the city of Minneapolis stepped up, because the people of Minnesota said very strongly that they wanted a professional basketball team to stay in Minnesota. Because of that, the city has carried the burden of the Target Center, because of the inaccuracies of the state. The… amendment potentially creates the same dynamic, where the state again comes to the city of Minneapolis and says pick up the ball. We’re going to drop it here… but you guys pick it up.”