This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
February 19, 2011
Ramsey County considering Vikings sales tax
Ramsey County officials are apparently exploring a half-cent sales tax hike as a funding mechanism for a Minnesota Vikings stadium, asking at least three state legislators if they'd support such a plan. "[They said], 'How'd you feel about a sales tax [increase]?', and I said, 'Not real good,'" state representative Carol McFarlane told the Minneapolis Star Tribune, before adding, "I'm being open-minded."
State representative Nora Slawik, meanwhile, said no specific sales tax figures were proposed, but said, "There are ways to structure it that I would be open to. In this economy, it's really important to look at any project that would bring in a lot of jobs, and I think the Vikings stadium has the potential to do that."
Okay, since you opened the door, Rep. Slawik, let's discuss the job impact of a half-cent sales tax increase. Back in 2006, the Kansas City Star noted that a 3/8 of a percent sales-tax hike would have the effect of taking $25 a year out of the pockets of county residents. If that holds true for Minnesota and scales proportionately — it's the weekend and I'm on a borrowed dodgy WiFi connection, so I don't have any way of easily checking at the moment — that means a half-cent sales tax hike would depress the economy of 500,000-person Ramsey County by about $16.5 million a year.
Not that I think taxes should never be raise, or even that sales taxes should never be raised (though they're both regressive and a bad thing to raise at a time when people still need all the encouragement they can to spend money). But in evaluating the economic effects of a project, you need to look at both the pros and the cons. One hopes that the Minnesota state legislature is smart enough to know this.