St. Cloud legislator/economist finds flaws in Vikes’ stadium finance plan

The Vikings’ latest bid for state financing doesn’t fly with state Rep. King Banaian, a Republican from St. Cloud who’s also an economics professor at St. Cloud State University.

A blog post by St. Cloud Times reporter Mark Sommerhauser looks at Banaian’s objection to the plan, which the Vikings say would use taxes raised by the team — including state income taxes paid by players and employees, and sales tax from items sold in a new stadium — to pay the state’s share of the $1.1 billion stadium.

The new proposal, floated in the Twin Cities newspaper ads last weekend, is called the “but-for” plan, because it would target tax revenues that allegedly wouldn’t exist, but for the Vikings existence in the state.

Banaian says there’s “a gaping hole in the Vikings’ logic,” according to Sommerhauser’s piece:

The sales and income tax revenues the Vikings generate wouldn’t necessarily disappear if the team left the state, Banaian says. He says at least some of what fans now spend at Vikings games likely would be spent elsewhere in the state — and thus, also generate sales-tax revenue — even if the Vikings left.

 The claim that the tax revenues would be lost without the Vikings “is pretty clearly an overstatement,” Banaian said. “It assumes that the fan who doesn’t have the Vikings to go see, sits in their home and does nothing.”

So the proposal just doesn’t work for the economist: “That, to me, is an incomplete plan,” Banaian said, “and I wouldn’t vote for it.”

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Comments (4)

  1. Submitted by Ross Williams on 11/30/2011 - 01:58 pm.

    ” “It assumes that the fan who doesn’t have the Vikings to go see, sits in their home and does nothing.”

    Worse, it ignores all the money people who are sitting on their couches at home watching the Vikings would spend if they didn’t have a hometown football team to watch. That is a lot more people than the 50,000 who will go to the stadium and provide a home audience for the Vikings 8 times a year.

  2. Submitted by James Hamilton on 11/30/2011 - 02:31 pm.

    I find it fascinating that so many tacitly accept the proposition that there is a “state’s share” to be paid for a new stadium. There is no such thing unless and until we agree to spend public funds for a new facility for the Vikings.

    The sins of the past (Met Stadium, Excel Energy Center, the Dome, Target Center, Target Field) do not require continued compliance with the demands of major league sports. Under the Vikings latest approach, the State owes me about $10K for my contributions in 2010. (I’ve omitted the property taxes I pay in fairness to the Vikings, who avoid paying them through public ownership of the facilities.)

    What colossal hubris on the part of the Wilfs and their spokesman, Mr. Bagley, to dictate to the people of Minnesota that they pay anything, much less that they pay 60% or more of the cost.

  3. Submitted by Flash (KR) Schiebel on 11/30/2011 - 06:25 pm.

    “”The claim that the tax revenues would be lost without the Vikings “is pretty clearly an overstatement,” Banaian said. “It assumes that the fan who doesn’t have the Vikings to go see, sits in their home and does nothing.”””

    This is not acknowledging that less than 1 million of the 20 million is Sales Tax generation. 90% of the ‘but for’ dollars is literally what leaves the general fund if the Vikings leave. Over half of that, almost 12 million is state withholding on player’s salaries.

  4. Submitted by Tony Wagner on 12/07/2011 - 06:29 pm.

    “This is not acknowledging that less than 1 million of the 20 million is Sales Tax generation. 90% of the ‘but for’ dollars is literally what leaves the general fund if the Vikings leave. Over half of that, almost 12 million is state withholding on player’s salaries.”

    And this is not acknowledging who ultimately pays those player salaries: the customers, the fans, the people of Minnesota. It’s not as if season ticket holders will start sticking that money in a mattress if the team leaves — they will probably spend/invest it elsewhere in the state, quite possibly on one of the other sports teams.

    What money won’t come back to Minnesota? Basically, the tax on the portion of Vikings salaries that can be attributed to NFL sources, primarily TV/satellite deals. This is much harder to calculate, given we have no access to the Vikings’ or NFL’s financial records, but I think it’s safe to say the real amount is nowhere near this back-of-the-envelope calculation by the Vikings.

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