April 02, 2012

Charities sign on to stadium bill, but new taxes rile Vikings

Give the Minnesota politicians pushing for a new $1 billion Vikings stadium this: They're pulling out all the stops to try to get a bill approved this year. Just days after a majority of the Minneapolis city council got on board, another major hurdle appears to have fallen, with charitable gaming groups agreeing over the weekend to accept the establishment of electronic pulltab gambling to fund the stadium in exchange for tax relief for their groups.

The St. Paul Pioneer Press goes into all the picayune details, but the upshot is that instead of being taxed on gross receipts, charities will now be taxed on net revenues, meaning no more of the problem where selling more pulltab, um, pulls can result in having to pay more in taxes than the added sales bring in. Allied Charities of Minnesota director King Wilson told the Pioneer Press that the new bill would provide his groups with $36 million in tax relief (per year? MinnPost implies so, but isn't exactly clear either). [UPDATE: The Minneapolis Star Tribune confirms that it's $36 million a year.]

That would mean $36 million a year in cost to the state, though, increasing concerns that there won't be enough money from pulltab sales to pay for a Vikings stadium and fund the tax kickback to charities. To that end, the Minnesota state house is now proposing several measures to "backstop" the gambling money if it isn't sufficient, including (in the order that they'd kick in): luxury suite taxes, a sports-themed lottery, any Hennepin County tax money left over after paying for the Twins' Target Field, and ticket taxes.

You'll notice that at least two of those — the suite tax and ticket tax — would hit the Vikings owners, as they'd no longer be able to jack up prices as high as they would otherwise if state taxes were folded into the ticket price. Vikings stadium point man Lester Bagley said yesterday that the team opposed those taxes, saying, "We don't agree with the principle that the Vikings should backstop the state's contribution."

The question now is whether the Vikings will raise a stink about these taxes and risk torpedoing the whole deal, or whether they'll suck it up in the hopes that at least they'll get a stadium, if one that they might have to put more money into. Also, whether the state senate will go along with any of this, since it's only a deal cut between the charities and the house. Plus, whether the legislature will even stay in session past this week. So a few questions still remaining, then...