Vikings earn first win at the Capitol
Committee inches stadium proposal forward
House Commerce and Regulatory Reform Committee Vice Chairman Tim Sanders, R-Blaine, records events in the committee room prior to start of the hearing. Photo by T.W. Budig
A Vikings’ stadium bill and means for the state to fund its share of the proposed $1 billion, so-called “People’s Stadium” in downtown Minneapolis was approved by a House committee April 2.
Rep. Morrie Lanning, R-Moorhead, saw his stadium legislation pass the House Commerce and Regulatory Reform Committee on a voice vote and referred to the House Rules Committee.
It was the first time this session that a Vikings’ stadium bill advanced in the Legislature.
Stadium legislation in the Senate is still hung up in Republican Sen. Ray Vandeveer’s Senate Local Government and Elections Committee.
A bill by Rep. John Kriesel, R-Cottage Grove, also was approved by the House committee on voice vote.
It reflects a recent agreement worked out between Allied Charities of Minnesota and lawmakers relating to charitable gaming — the mechanism by which stadium backers look to fund the state’s $398 million share of the stadium proposal.
It’s estimated the proposed use of electronic pull-tabs and electronic bingo in bars and clubs across the state would garner the state an additional $72 million a year in charitable gaming revenue.
Under the agreement, the first $36 million would be slated to the charitable gaming industry in the form of tax breaks.
Kriesel’s bill also incorporates the use of tip boards — a board, placard, or other device containing a seal that conceals a winning number or symbol — that’s estimated to garner the state an additional $16 million a year.
But not everyone is comfortable with tip boards.
Democratic Gov. Mark Dayton suggested on April 2 they could run afoul of federal law.
“It doesn’t strike me at first glance as a viable option,” Dayton said, questioning whether bond houses would accept tip boards as a legitimate funding mechanism for payment of debt service on bonds.
Administration officials further cited a 2002 Minnesota Attorney General’s Office opinion concerning sports wagering or betting that concluded the state would likely lose a lawsuit challenging the constitutionality of the federal Sports Protection Act.
Executive Director King Wilson of Allied Charities of Minnesota indicated the charities believe tip boards are legal.
“We believe it’s OK,” he said.
Everything included, less the $36 million in tax breaks for charitable gaming, Kriesel’s proposal is estimated to leave $52 million for the state to direct toward stadium payments.
Lanning put the state’s estimated debt service payment at $42 million a year.
A number of testifiers spoke in favor of Kriesel’s proposal including former Pawlenty chief of staff and state commission and Hospitality Minnesota President Dan McElroy representing the Minnesota Restaurant, Lodging and Resort, and Campground Associations.
All three associations support the opportunity for “more people to have more fun,” McElroy said.
Wilson, too, spoke in support of the proposal.
Lanning during the committee hearing successfully amended his bill to include a number of changes.
In addressing one of the worries often heard from lawmakers — that the state will have to dip into its general fund to make stadium payments because charitable gaming revenue estimates will prove wrong — Lanning amended a series of “blink on,” “blink off” revenue-making provisions.
These are a 10 percent tax on stadium luxury boxes, a sports-themed lottery game, tapping into Hennepin County tax revenue, and a stadium admissions tax.
These alternative funding sources, which would be approached in the order listed by state officials in the event of a shortfall, are estimated to garner an additional $7 million to $10 million a year.
Lanning also spoke of any excess charitable gaming revenue left over after payment of the state’s stadium debt as being placed into reserves as backup debt funding.
Lester Bagley, Vikings’ vice president of public affairs and stadium development, indicated Vikings’ officials are concerned about having the team “being the backstop” for state revenue shortfalls.
Rep. Joe Atkins, R-Inver Grove Heights, also expressed concern about the state being able to make its stadium payments.
“That’s what makes me a little skittish of what you have in the bill,” Atkins said after Lanning confirmed the first $36 million of additional charitable gaming revenue would be slated for tax breaks for the charities.
Atkins’ proposed, and Lanning took as a friendly amendment, the addition of tip boards along with electronic pull-tabs and bingo as a charitable gaming revenue raiser.
Although committee members generally did not ask many questions, Rep. Sheldon Johnson, DFL-St. Paul, asked Minneapolis Mayor R.T. Rybak and City Attorney Susan Segal if city officials weren’t doing an “end around” in terms of the Minneapolis city charter.
Johnson asked if the spirit and intentions of Minneapolis voters who approved a provision directing a referendum if the city spends more than $10 million on a stadium was being honored.
Rybak argued that the state, not the city, controlled the city tax streams.
If that wasn’t the case, he said, he would have redirected the streams long ago to other priorities.
The city was “absolutely” in keeping with the spirit and intentions of the law, Rybak argued.
A majority of Minneapolis City Council members recently indicated support for the current Vikings stadium proposal.
That was one hang-up that remained reaching an agreement with Allied Charities concerning the charitable gaming revenue.
It’s likely Lanning’s stadium bill could be directed to other House committees.
T.W. Budig can be reached at tim.budig@ecm-inc.com.
