Column: Guest Column, by Phil Krinkie

Last year in May after 10 years of acrimony and debate over the public funding of a new Minnesota Vikings stadium the state Legislature passed a financing package, one which calls for the state paying $348 million of the $960 million in estimated total construction costs.

It was a long and arduous process for Vikings owner Zygi Wilf, who had seen numerous funding proposals twist in the wind and eventually fail to gain legislative approval. But 2012 proved to be different with two persistent bill authors, Sen. Julie Rosen, R-Fairmont, and former Rep. Morrie Lanning, R-Moorhead. Through numerous committees and several different funding mechanisms, they finally came up with a bill that garnered enough support to win the necessary votes to pass the stadium funding package.

Because of strong public opposition to the use of state general fund revenue, the financing for the state’s $348 million portion of the $960 construction cost was to be paid for with revenues from a new form of gambling — referred to as e-pull tabs or electronic pull tabs.

The concept was that if e-pull tabs were permitted in bars and VFW locations across the state, there would be an overwhelming response to the game and millions of dollars would flow into the state treasury.

The calculation was that this new gambling device would soon be in over 2,000 locations and generate more than $30 million in new revenue every year, enough over 30 years to pay the state’s share of the cost.

However, 10 months after legislators voted for this mirage of a funding source, the e-funding source for the new billion-dollar Viking stadium has e-vaporated. Instead of 2,500 locations with e-pull tabs, there are only 200, and instead of estimates of over $30 million in new revenue, there is less than $2 million flowing into the state coffers.

Despite the fact that estimates for revenue have fallen woefully short of expectations, no one at the State Capitol seems the least bit concerned. In the last three months, state lawmakers have proposed to increase state spending by over $3 billion fueled by more than $2 billion in new taxes.

But no one has stepped forward to suggest how the Legislature is going to pay for last year’s e-normous expenditure to build a new stadium. The DFL majority has proposed lots of new spending throughout the state budget, yet not one dollar has been budgeted or even proposed to cover the $30 million stadium funding gap.

Legislators don’t seem to have the slightest concern for how the state will make the payments to cover the costs of the new Viking’s stadium, which many of them voted to fund. Legislators seem to have turned a deaf ear to the fact that stadium construction plans are moving forward with a ground-breaking scheduled for next fall.

The authors of the stadium funding bill along with Gov. Mark Dayton have conveniently avoided discussing the shortfall in e-pull tab revenues. They also don’t bring up the fact that any shortfall to pay for the new billion-dollar stadium will come directly from the state’s general fund.

That’s right, payments for the new Zygi Dome will come from general tax revenue — not the e-lusive e-pull tabs, as many legislators were led to believe.

Everyone with an IQ above room temperature knew last year this sham of a funding source would never produce the revenue needed to pay for Zygi’s billion-dollar playground. That’s why the funding legislation contained a provision termed “appropriation bonds.”

These are bonds that will have the backing of the state’s general tax revenue, i.e. the state’s income and sales tax revenue.

Therefore, when the e-pull tab revenue comes up short, as is currently the case, the money needed to pay off the bonds will come from the state’s general fund. No overdraft notice, no shortage of funds for the billionaire’s Taj Mahal stadium, just another IOU to the state taxpayers. Whether duped or dumb, the funding source that legislators promised they wouldn’t use to build a new stadium, general fund dollars, is indeed the ultimate source of the funding.

This should serve as an e-mergency for a new Vikings stadium bill. This new legislation should rightfully have Mr. Wilf paying for more of the stadium costs. It should also serve as a warning for much-needed third-party e-valuation when legislation involves taxpayer money funding private business. Just because legislators dreamed that e-pull tabs would fund the project, doesn’t make it a reality. Before lawmakers spend billions more this legislative session, they should first determine how they will fund their past obligations.

 

Phil Krinkie, a former eight-term Republican state rep from Lino Lakes who chaired the House Tax Committee for a while, is president of the Taxpayers League of Minnesota. You can contact him at: philk@taxpayersleague.org.