The Minnesota Vikings released more details of their rumored TIF plan yesterday, and it turns out to be not just a TIF but a STIF:
The plan calls for redirecting $25 million in federal road funding to the project, and getting $21 million dollars in extra environmental cleanup funds.
“These are credits that we think are attainable,” said Vikings vice president Lester Bagley, who rolled out the plan at a Capitol press briefing Monday afternoon.
But those credits alone won’t close the gap. For the rest, the team wants Ramsey County or the state to borrow at least $61 million more, to be repaid with existing sales taxes and ticket taxes, as well as the additional revenue which will be generated by taxes on liquor, memorabilia and parking at the stadium itself over future years.
“These taxes are generated at a base level in 2011, and in 2015 in the new stadium, the revenues have raised,” said Bagley. “The idea is to capture the incremental increase in these revenues and use them to pay off these transportation bonds.”
That’s sales tax increment financing, or a STIF. I know I’ve written before about why STIFs are even worse ideas than TIFs — oh, yes, here it is, about an old stadium proposal in … why, it’s Minnesota!
STIFs have never been used in Minnesota, and in those states where they have been used, they have a checkered past: as finance expert John Mikesell has written in the one substantial study of STIFs, sales taxes “are less suited for use in tax increment finance programs” than property taxes for several reasons, including the volatile nature of sales-tax receipts during lean economic times, and the difficulty in determining how much sales tax activity is “new” and how much is merely cannibalized from spending in nearby areas. (California repealed its STIF law in 1993 for precisely this reason.)
There’s been no immediate reaction from state officials, but apparently they’re meeting with Vikings execs right now behind closed doors to try to hash out an agreement. More news once there’s a post-meeting announcement, or sooner than that if we can get any British tabloid journalists on the case.