What’s old is new again in the stadium debate at the Minnesota State Capitol. A proposal to tax sports memorabilia might be headed back towards a stadium deal, thanks to the House Taxes Committee chairwoman, Rep. Ann Lenczewski, DFL-Bloomington.
She’s proposing a tax on licensed sportswear and other goods, including trading cards, photographs, autographed merchandise and other items. Lenczewski said in an interview today that the easiest way would be to simply levy regular sales tax on jerseys, T-shirts and other licensed clothing that’s tax-free now.
That’s an alternative to the existing “Plan B,” written into the stadium law, that would backfill sagging electronic pulltab revenues with a stadium suite tax and a “sports themed” game from the Minnesota Lottery.
“At this point, the plan to finance the Vikings stadium, while I think people think its going to continue to grow, it’s just not taking off the way I think people thought it would, initially. So rather than to have a larger financing gap down the road, what are some things we could consider doing to solve the problem right now? You know, I am somebody who opposed the stadium, but my initial reaction, talking to legislators, both opponents and proponents of the stadium, they seem fairly supporting. Because what I am looking for here, would be to try to find the revenue that the users and the sports enthusiasts would pay.”
Ironically, the tax could also have Twins and Wild fans helping to pay for the Vikings’ new stadium — and not just with baseball caps and hockey sweaters. That idea was part of the original stadium bill, back in 2011.
Lenczewski’s bill, though, has an added twist. It would also tax suites, skyboxes and other “other similar facilities in stadiums and arenas,” as well as personal seat license sales. That’s likely to spark another battle — it could have well-heeled ticket holders for the Wild, the Timberwolves and the Twins subsidizing the Vikings stadium across town. “You know, those… stadiums have gotten huge public subsidies from taxpayers as well. I guess the way I look at it is sports enthusiasts across Minnesota would be contributing just a little bit,” Lenczewski said.
She thinks her tax proposal could bring in a total of $15 to $20 million per biennium.
A sales tax on personal seat licenses, if the Vikings were to sell $50 million worth as they’ve suggested, could raise more than $3.5 million right off the bat, in a one-time, up-front license sale. The bill currently has the licenses being sold by the Minnesota Sports Facilities Authority, possibly tax free, although the current stadium law is silent on that subject.
The Vikings, as you might guess, were cool to the idea.
Team spokesman Lester Bagley said he’d just gotten Lenczewski’s bill and was going through the particulars this afternoon.
“As we closed the deal out in the last session, and put the additional $50 million in the last 48 hours of the session to guarantee $477 million from the Vikings, which is 49 percent of the up front costs, and when you add in the operating costs that we’re contributing, it’s 54 percent of the overall project costs,” Bagley said. “But part of that agreement was the assurance that there would be no additional taxes on stadium revenues going forward.”
Lenczewski’s bill is scheduled to be heard in the House Taxes Committee on Wednesday. The panel meets at 12:30, but Rochester’s Destination Medical Center proposal is at the top of the meeting agenda.
Also this week, Gov. Mark Dayton says he’s going to host a meeting with members of the Legislative Commission on Minnesota Sports Facilities, (Presumably not including Rep. Kim Norton, DFL-Rochester, who didn’t like the leadership election held by the committee last week, and says she’s done with the group.)
Gov. Mark Dayton sounded a weary tone about the stadium issue today, as well, decrying the attention the electronic pulltab issue has been getting. The governor joked he can’t wait for the NFL draft, so that the media will have some other Vikings-related subject to talk about.
“I think this has been blown so far out of proportion to the problem. I mean, how much is the annual payment? Twenty, $30 million dollars a year? I mean, we’re not talking about significant money here in the scheme of a state budget, $35, $37, $38 billion a biennium. We’ll come up with a solution. We have six weeks now, and I am chairing a meeting, convening a meeting this week with, I really appreciate Sen. (Julie) Rosen who is involved in this and Sen. (Bobby Joe) Champion, co-chairing this legislative group. We’re going to put all the possible ideas on the table, and see which ones are most assured and which ones have the most support. I don’t want to see this project fail. It shouldn’t fail. I don’t think a majority of the Legislature wants to see it fail. I know the public isn’t going to benefit from that. To me, this is a very solvable problem.”
Dayton said he was open to either improvements to the electronic pulltabs, or a different funding source altogether. He said the Minnesota Lottery would be part of the discussion, and that the difficulty with the stadium financing is not really an “insurmountable financial problem.”