Pawlenty unleashes trial balloons for Vikings subsidies

That bck burner sure didn’t last long. Yesterday Minnesota Gov. Tim Pawlenty jumped with both feet into the Vikings stadium push, suggesting to Minnesota Public Radio that the state could use sports lottery money or tax-increment financing to provide between $29 million and $42 million a year toward an $870 million stadium.

Okay, maybe jumped with one foot, or one and a half feet: Pawlenty declined to actually endorse either funding scheme. Still, for something he isn’t actually committing to support, he did go on about it a lot:

“If you look at the Minnesota Lottery, for example, there’s new games added all the time in the lottery,” Pawlenty told a radio audience. “There was one just added the other day called Mega Millions that’s going to generate $20 million a year,” the governor said.

Although 40 percent of those funds — $ 8 million — is constitutionally dedicated to an environmental trust fund, “the other $12 [million] can be used for other stuff. People will say it should go into schools or roads or whatever, but … that’s another way to do [the stadium].”

It’s a bit unclear whether Pawlenty was talking about adding a new lottery or siphoning off money from Mega Millions proceeds, but either way it’s money that the state would be losing — once you hit market saturation with your lotteries, there’s no way to sell more tickets, as the state of Maryland found out when it was forced to abandon a planned education lottery after realizing it had tapped out the gambling market with stadium lotteries. As for the TIF, the Minneapolis Star Tribune called this a “particularly novel” solution, which I suppose it is if you’ve been in a coma since 2003.


12 comments on “Pawlenty unleashes trial balloons for Vikings subsidies

  1. I sent this link to my relatives in Minneapolis. Here’s what I got back:

    “They did something like this before to get the initial lottery passed. They promised that X dollars of proceeds would be given to education. Everybody thought “great…we need that” and they did live up to their promise. They just failed to inform us that the education spending from the general fund would go down by the same amount. So education got no net gain and the state got lots more money to spend.

    Minnesota is currently struggling with a 1B shortfall.

    We already got taken to the cleaners on the new Twins stadium.”

  2. Time for some hard facts.

    According to the Transactional Records Access Clearinghouse, Syracuse University;
    There are 2,211,546 taxpayers in the great state of Minnesota. The average annual income is $60,553. Time to apply some basic math.

    $870,000,000 (stadium cost) divided by 2,211,546 (taxpayers) is a burden of $393.39 each. Divided across 20 years, that works out about $19 additional annual tax burden for each taxpayer in Minnesota for the next 20 years..

    Just do it. Stop with the whining and complaining and ante up the lousy $19 a year out of the average income of $60,553, in order to maintain the privilege of hosting an NFL franchise in Minnesota. Actually, since the Wilfs have committed to paying $250,000,000 out of their own pockets, the actually cost would be about 30% less for the taxpayer, so that’s actually just under $13 a year.

    Losing the Vikings to another state that’s willing to ante up for a new stadium will cost the state much more in the long run.

  3. Hey Dan,

    Before you demand $19 a year from everyone perhaps they should be allowed to vote on it. There’s a “particularly novel” solution – allow the people to decide if they value the Vikings as highly as you.

  4. Dan, there’s a problem with your math: Even if the tax burden is $393.39 per taxpayer, you can’t spread that out over 20 years, because the money has to be paid up front. It’s like if you tried to buy a $500,000 house by saying, “Great! I can just pay $25,000 a year for 20 years!” Depending on your interest rate, the actual cost would be in the $30-40 per taxpayer range.

    Also, you might be facing a hard sell convincing people in, say, Bemidji that they should pay anything towards a Vikings stadium. Recall that this was one of the things that kept the Twins from getting a stadium for all those years, until they finally restricted their demands to Hennepin County.

  5. It never ceases to amaze me that the same people who blithely turn a $900 million handout to a private for-profit-company into a miserly “under $13 a year” inevitably end up being the same ones clamoring about being “taxed to death”. God help us if some befuddled do-gooder seeks $13 a year to fight child poverty or improve literacy rates, etc… (Perhaps the “privilege of hosting” a just society ain’t glamorous enough for the likes of Dan).

    Let’s see, Minnesota’s State budget deficit is 1.2 billion. So according to Dan’s logic and calculations all those Right-wing editorials and talk show hosts are bellyaching about a measly $14 each a year. Sheash…

  6. Neil, in your response to Dan you turned his $393.39 *per citizen* into *per tax-payer*. As you know, they’re not the same thing. As I recall from some course I took in my past, a rough estimate is that about 60% of U.S. Citizen’s actually pay taxes (Why do I have a sneaky suspicion that Viking’s owner Zygi Wilf may not be one of them?). Which would change Dan’s calculation to around $655 per tax payer. If I’m correct, that increases your estimation to about $50-$60 per person, per year.

  7. NFL Stadiums clear over $100M – EACH – in broadcast royalties along, EVERY YEAR.

    If the public contribution is as puny as the Stadium Mob likes to claim – Zygi shouldn’t have any problems paying for it himself.

    Here in Santa Clara, CA, the 49ers are demanding $114,000,000 up front, the formation of a public authority to raise $330,000,000 more – then, FINALLY, a General Fund LOSS of $67,000,000 so that our RDA can issue bonds for part of the $114M.

    It’s a total ripoff, and it’s not worth it. Bad NFL Stadium economics means lousy deals for cities.

    Regards,
    Bill Bailey, Treasurer
    Santa Clara Plays Fair.org

    -=0=-

  8. Oops. Just to correct my earlier post. Dan does say “Taxpayer” not citizen. However, my point still stands. According to the right wing “think taknk” the Tax Foundation only 1/3rd of U.S. taxpayers have any tax liability (so adjust my final calculations downward by 3%).

  9. oops again… The above should read: 1/3 of U.S. “taxpayers” have *no* tax liability. Pardon me.

    …so that’s what the “preview button” is for.

  10. Let’s rework Dan’s “simple stadium construction” math a little…

    It’s going to cost $870,000,000, right? And his long division shows the capital effectively amortized (without interest, as Neil states) over 20 years.

    That’s a mere $43.5M p/a.

    So, instead of dividing by the total population of Minnesota, or by the actual number of tax payers in the state, how about we divide by the number of spectators who will buy tickets? Dan doesn’t say how many seats the $870M stadium will have, but let’s assume 72,000. After all, it would be just silly to build it smaller if football is so popular (and it is).

    So, ten games a year (NFL fans pay full price for preseason games, don’t forget) times 72k = 720,000 tickets sold.

    43.5M/720k…. Why, that’s only $60 per attendee! And the actual number should be much lower, because we all know it’s the club seats & suites that the real revenue comes from. So the same “easy” funding Dan recommends be imposed on all residents of Minnesota (including preschoolers) could be raised by, say, a 2% tax on concessions & parking, a 10% tax on the suites/club seats, and maybe as little as a $25 ticket surcharge!

    You know, that’s so cheap that Minnesota football fans can’t refuse… and no tax dollars needed…
    What could be easier?

  11. Dan, two questions:

    1. In what way or ways is it privilege for a city to host an NFL team?

    2. What tangibly would it cost Minnesota to lose the Vikings?