“[H]aving an NFL team in Minnesota requires a stadium solution. This solution must be finalized in the 2011 [legislative] Session.”
—From a statement Tuesday by the Minnesota Vikings
It was a dark and stormy morning at the state Capitol two Wednesdays ago when a deftly timed bombshell dropped: the Minnesota Supreme Court ruling on Gov. Tim Pawlenty’s unallotments was released just as a Minnesota Vikings’ stadium bill, already wobbling under the weight of widespread opposition and inadequate funding mechanisms, was being heard by a Senate committee.
If the Vikings effort wasn’t already low on the governor and Legislature’s list of end-of-session priorities, it plunked off the table like a squished purple grape and dribbled below the radar, never to be heard from again in the final days.
What now?
As the session’s dust settles — and even as the state budget deficit is presumed to reach $5 billion heading into 2011 — what now? Where does the $800 million-and-increasing Vikings stadium effort stand after this session? In their corporate statement Tuesday, the Vikings declared this a “watershed moment for the future of the franchise in Minnesota.”
But how, as the Vikings also declared, can a stadium deal be “finalized” in 2011?
Pawlenty, freed now from making a tough decision on the matter, told reporters on Monday, “We cannot and should not lose the Vikings … but the details of how you put that together are important.” He argued, as he long has, that any Vikings stadium deal needs “a local partner,” meaning a city or county to foot the bill. He declared the team is “not going to stay in the Metrodome.” And he said the Vikings’ matter would have to “wait until next year” because he wasn’t about to call a special session for a stadium bill.
In that one passage, the governor was half-right.
Losing the Vikings wouldn’t be a good thing for the culture of the state, and, depending on how you balance the taxes the team contributes and the subsidy that would be created, it probably would not be a good thing for state coffers, either.
As for a “local partner,” exactly which city or county can afford to finance a stadium without state funds remains a financial and political mystery, even though Minneapolis city officials are eager to keep the franchise downtown on the current Metrodome site.
Yes, long term, the team is not going to stay in the Dome, but just because its lease expires after the 2011 season doesn’t mean the team can’t play there beyond that; the Twins did so on a year-to-year basis for six years after their Dome lease officially expired. And there is some case law — born from the Twin ballpark debate — that could provide hurdles for any Vikings’ attempted exit after 2011.
Still, the leverage, it would seem, tips toward the team once the lease officially expires and the Vikings are relatively footloose.
Wait until next year? Yes, Senate Majority Leader Larry Pogemiller told MinnPost Tuesday. He’s figuring the matter could wind up as part of a larger infrastructure package in the Legislature. (Mayor R.T. Rybak thinks a Vikings plan must also be linked to other issues.) If it’s not addressed in the 2011 session, the “franchise could be at risk,” Pogemiller said.
Minneapolis City Council President Barbara Johnson and City Chief Finance Officer Patrick Born met last week with Vikings’ president Mark Wilf, brother to primary owner Zygi Wilf, and other team officials and laid out to them the real problems the city faces in funding any new sports facility by itself. Any existing citywide tax simply couldn’t fund the debt for such a large project, Johnson and Born told the team. Plus, there is debt on — and improvements needed at — city-owned Target Center and anticipated financial demands long term for the Minneapolis Convention Center.
“I think they were sobered by that,” Johnson said of Wilf and his aides.
Still, Johnson told MinnPost Tuesday that she is hoping that a “working group” of legislative and, perhaps, regional leaders will get together this summer to begin exploring ideas to resolve the Vikings stadium dilemma in time for the 2011 legislative session.
Any successful group will thoughtfully analyze the value in keeping the team, the cost of doing so and, on the other hand, the real risk of losing a franchise in the nation’s most popular professional sport.
The Los Angeles threat
Without making threats, the Vikings’ lobbyists — led by Lester Bagley — have done a nifty job in cementing a clear-cut message and perception: If a Vikings’ deal isn’t done in 2011, the team will play out the final year of its 30-year-lease and, presumably, pack up and move to, let’s say, Los Angeles for the 2012 NFL season, just as surely as a free agent player might select his favorite venue to bring his talents.
As Bagley has said many times — again, without any threats — “It’s now down to 20 games left at the Metrodome.”
That may not be necessarily so. As one sports economist told me last week, “If L.A. were simple to move to, it would have been done by now.”
No one doubts that the possibility is real that an NFL team could move to Los Angeles in, say, the next five years. After all, that glamorous market, with its vast TV territory and outrageous community of bling, has been without an NFL franchise since 1995. It’s the only existing rational open market for an NFL franchise.
But there are daunting economics there. First, as here in Minnesota, a stadium needs to be built. Various plans are being kicked around, but the cost is a factor when a new edifice is discussed in Los Angeles. (The new Dallas Cowboys stadium cost $1.3 billion and the new New York Giants/Jets stadium is tagged at $1.6 billion. So, L.A. would want to be in that realm.)
Because of the size of the market, and the amount of private money that could be raised there — from potential owners, corporate backers, private seat licenses and luxury suites — a $1 billion-plus stadium could, eventually, be built without public dollars in Los Angeles. Gov. Arnold Schwarzenegger has said, “In California, we don’t build stadiums with public money.”
But, whenever and wherever that stadium is built, it still needs a team, and the Vikings aren’t the only NFL franchise in play. Buffalo, Jacksonville and even the St. Louis Rams, which moved from L.A. 15 years ago, could be candidates. A more natural, potentially mobile franchise is the San Diego Chargers. The Charger ownership, too, has been in a lengthy battle for a new stadium. Wouldn’t it make sense to simply have a team that’s already geographically adjacent to the Los Angeles metro area slide into a new Los Angeles stadium?
Assuming any franchise will move to Los Angeles also assumes two whopping price tags in addition to the stadium costs. The private builders of the stadium will want to own the team or be partners in the team. Vikings lobbyists have said that the Wilf family would never move the team, but, more likely, sell the Vikings and that a new ownership group would move the team.
What would it cost to buy the Vikings to move them to Los Angeles? $800 million or $1 billion?
Beyond that, what will the NFL’s other owners charge Zygi Wilf or any new owner to move to and gain control of that Los Angeles market? The number for such a transfer fee is uncertain. Could it be $500 million? More? If you are the owner of the New Orleans Saints, wouldn’t you want to pocket as much dough as possible from the guy who will gain control of the L.A. franchise and all of its revenues?
So, $1 billion for the stadium, and, let’s say, $800 million for the franchise. Add on a substantial transfer fee, and this looks like a $2 billion deal to get an NFL franchise — to get the Vikings — to L.A.
Can it happen? Sure. Will it happen? Not this week. Not this month. Not this year. Why?
Labor unrest and other things
The collective bargaining agreement, or CBA, between the NFL Players Association and the league’s owners expires after this season. Already, the 2010 season is affected by the removal of the players’ salary cap. Whether revenue-sharing among owners will continue and just what the economics of the league will look like as the new union deal is struck remain murky.
No one is going to buy an NFL team while the CBA is open and the future financial structure of the very prosperous league is subject to tinkering. This gives Minnesota some time to ponder its stadium move. It also means that local officials need to closely monitor the labor talks; the terms of any new collective bargaining agreement could affect the economics of any stadium deal here.
There are also league rules about relocation that must be followed, six pages worth (PDF).
Among them: Any franchise relocation requires a three-fourths vote of approval from other owners, and NFL “traditions disfavor relocations if a club has been well-supported and financially successful and is expected to remain so.”
But a key threshold for a franchise to walk through in advance of relocation is the stepped-up involvement of the league itself in attempting to resolve any stadium stalemate. While the NFL has been closely monitoring the Vikings’ situation, the team has not yet declared that it “cannot obtain a satisfactory resolution of its stadium needs.” Tuesday’s statement crept into that zone, but the NFL has not arrived on the scene … yet.
Indeed, for now, no local political leader has developed a strong relationship with NFL Commissioner Roger Goodell. It may be time to begin developing one.
There is one other Machiavellian matter to consider. In sports league economics, there is an advantage to the NFL to keep the Los Angeles market open. Keeping L.A. available to move a team — but never used — allows owners in Minnesota or Buffalo or Jacksonville with a hammer to threaten their communities with a place to go.
On the other hand, moving San Diego to Los Angeles wouldn’t allow for the revival of an aggrieved market. That is, should the Vikings move one day, you could be certain that Minneapolis-St. Paul would be viewed as a perfect site for another NFL team to move, if and when it wanted to and if and when Minnesota built a new stadium. (This is how the NHL got St. Paul and the state to build a new arena after the North Stars left for Dallas.)
If San Diego’s team simply moved to L.A., that wouldn’t really “open up” another option market for NFL owners to point to. It would be relocating a team within that greater Southern California sprawl.
Another exercise for any “working group” to perform is to begin thinking like an NFL owner: What are the benefits and drawbacks to losing the Minnesota market?
Back to Minnesota
However many hoops there are to navigate, it is crunch time here for a Vikings stadium. With the march toward the Dome’s lease expiration and the noisemaking by the Wilfs intensifying, it’s clear that various political forces in Minnesota will try to develop a rational, understandable Vikings’ stadium plan. (Rational to some people, that is.)
The team itself needs to come to the table with some ideas, too, and, undoubtedly, more private money than the Wilfs have mentioned so far. In the halls of the Capitol, an owners’ contribution of $250 million isn’t nearly enough for an $800 million stadium that will increase the value of the franchise substantially.
The gubernatorial election will be extremely pivotal. As one DFL lawmaker told me last week, “Tom Emmer is the Vikings’ worst nightmare.”
If the Republican candidate for governor wins, his no-new-taxes, reduce-government penchant — like that of Gov. Pawlenty — could stall any effort to finance a stadium with any sort of public participation.
House Speaker Margaret Anderson Kelliher, the DFL-endorsed candidate, has been more open to a Vikings’ discussion. She is based in Minneapolis. She voted to approve the Twins ballpark and Gophers football stadium in 2006. And imagine the optics: the state’s first woman governor “saving” the football team for all those purple-and-gold face-painted yahoos. It would be Nixon-going-to-China, Minnesota style. (But then, if Mark Dayton were to beat Kelliher in the DFL primary, the Vikings could also be in a world of hurt.)
Meanwhile, Independence Party candidate Tom Horner has said he’s willing to use state funds to help build a Vikings stadium. (Horner’s public affairs firm, Himle Horner, is currently consulting on strategy with the Vikings.)
What could be in any governor’s tool box?
A collection of user fees, such as hotel taxes, rental car taxes and sports apparel taxes that were shot down by Pawlenty, but could be revived.
There’s always former Sen. Dick Day’s racino plan, which never gets any traction from the DFL or some anti-gambling foes but seems to have citizen support. Whether the NFL or bond counsel would rely on gambling money exclusively for stadium debt is worth exploring.
Talk of using a Minneapolis Convention Center tax seems, for now, to be dead; As city officials did at the Capitol earlier this month, Rybak, Pogemiller and Johnson all rejected it in interviews Tuesday.
There could be a regional approach with state involvement. Johnson hinted at that, with some idea to bring all of the public assembly facilities — such as Target Center, Xcel Energy Center and the St. Paul and Minneapolis convention centers — under one umbrella with a new Vikings stadium. How to fund that? Could there be an economy of scale in such a plan?
The sale of private seat licenses to Vikings fans and corporate sponsors was the core of the final bill passed by a committee this month. How much can the team and community raise privately to minimize any public subsidies?
Mayor Rybak has talked of the public capturing the increased value of real estate adjacent to any new stadium. How would that work?
And, then, of course, there is some sort of naked state funding for a statewide asset that pours about $20 million annually into the state treasury via income and sales taxes.
Other ideas will have to flow as the 2010 legislative session fades away, the 2011 session approaches and the Vikings are set to begin their 29th season of a 30-year-lease.
Jay Weiner has reported on Minnesota’s stadium debates since their earliest days.
Jay, is this a reporting piece or an editorial? When you make statements like “Losing the Vikings wouldn’t be a good thing for the culture of the state” and “a stadium needs to be built,” it leads me to believe this is an editorial rather than an “analysis.” Sports helps sell newspapers, so I would expect this kind of shill behavior from the StarTribune, but I expect better from a MinnPost writer.
Why not call this issue what it is — an emotional issue. Losing a hometown team has emotional consequences and fans will grab on to whatever life ring they can to keep from losing their team — economic, cultural, etc. The economic justifications for publicly financing a stadium are spurious at best. Money not spent on the Vikings will be spent at other entertainment venues and taxes will still be paid — who says the State of Minnesota should favor one for-profit entertainment venue over another with public subsidies?
There are many, many metropolitan areas in the US without professional sports teams that offer vibrant cultural opportunities, attract talent for a strong workforce and have strong economies with good tax revenue. To suggest that an NFL team is necessary for one or all of those things is ridiculous and plays to the base emotions of the fans and taxpayers.
Let’s not forget that football is a for-profit enterprise, run by millionaires and billionaires, that seeks to maximize profits on the backs of taxpayers and fans.
We’re exploited enough in this world. Why would we BEG to be exploited further?
I actually think losing the Vikings would be a good thing for the culture of the state. I think our culture’s obsession with sports has very nearly rendered us a monocultural wasteland.
As amenities stadiums are huge public burdens, we’ll end up with a $60 million dollar a year tax burden of some kind if the Vikings get a stadium. That completely dwarfs any other spending on all other public amenities combined. For instance, the annual budget for all of our state parks is $23 million a year. And the stadiums aren’t even really “public” amenities or infrastructure. Think about this, British Petroleum’s liability for the Gulf Oil spill is limited to $75 million dollars, that’s less than half Mauer’s salary for five years. It’s simply insane that we pay people millions, and hundreds of millions of dollars to play games. I’ve always thought just about anyone can get by on a couple million dollars a year.
Leaving the stadium debate itself aside, I really do think that this culture has an unhealthy and damaging obsession with sports. It distorts public policy, misdirects public resources, and promotes unhealthy consumerism, egotism, and perverse competitiveness. Entertainment is supposed to be distracting, but sports is distracting not just individuals seeking entertainment but also policy makers and elected officials.
Professional sports has also become a cultural drain because it distorts the economy. Pro sports siphons huge amounts of money and public resources into a disproportionately small number of bank accounts. This mean less money is available for other forms of entertainment and other cultural activities. I think we’re very nearly reaching the point where we’re devoting so many resources to sports that we’re creating a cultural dead zone rather than a rich cultural environment.
Let me clear, I’m not saying we should put $60 million a year into theaters, museums, or water fountains instead of stadiums. Frankly, it’s probably impossible to put $60 million a year into other amenities because nothing else even come close to the cost of stadiums and arenas. The point is we can have a very rich, I think richer cultural environment for a fraction of the pubic expense. We could free the remaining resources for actual public infrastructure which promotes far more economic activity, prosperity, and cultural diversity. For the cost of the Twins stadium we could have completed the 35W Crosstown interchange. For the proposed cost of the the Viking stadium we could build another light rail line. Again, I’m not just arguing about the stadium, believe it or not the ability to get around easily and cheaply has a lot to with a communities cultural vitality.
O.K. I know I’m in the minority. But someone has to say it. I know people love their sports. I’m just saying this out of control. You can have sports, but you can also have a lot of other things. We live in a beautiful state with a ton of things to see and do, trust me, there would be life after the Vikings, I think maybe a better life.
As for the stadium, as frustrating and maddening as it is, especially for people like me, who here really doesn’t know what’s going to happen? We have a corrupt political system where the legislators have to beg for a meeting with the governor to discuss budget deficits, but Ziggy Wolf can make a phone call and get meeting- with coffee. Don’t worry, Ziggy will get his welfare program one way or another. The only bipartisan activity your going to see in the next 4 years will be some kind of stadium deal. After all the Twin stadium is really the only major accomplishment of the Pawlenty era. But seriously, don’t ya think that’s kinda sad? And if by some miracle of public responsibility the nation finally pulls out of this sports hysteria and calls the bluff, and makes these billionaires build their own stadiums; well that will be a good thing, even if we lose a team in process.
“No one is going to buy an NFL team while the CBA is open and the future financial structure of the very prosperous league is subject to tinkering.”
I would avoid making such a categorical statement myself. While the fact that the CBA is being renegotiated adds uncertainty to the deal, there will always be things that are uncertain about buying an NFL franchise. For someone willing to assume the risk that the deal will be disadvantageous to the owners, this may be an opportunity to buy a team at a discount should one come on the market. Given the historic weakness of the players’ union, that may be a risk well worth assuming.
In any event, there will always be an important negotiation and the value of a franchise will always been in part a speculation on the outcome of such negotiations. If somehow, teams were only brought to market when no one was thinking of the next labor negotiation, or the next tv negotiation, or stadium deal renegotiation, they would never come to market at all.
“I actually think losing the Vikings would be a good thing for the culture of the state. I think our culture’s obsession with sports has very nearly rendered us a monocultural wasteland.”
I think this is objectively untrue. Culturally, if one wants to attribute such a thing as culture to a football team, as much as anything the Vikings unify us as a state. On Monday morning, does anyone you know, football fan or not, not know how the Vikings did on Sunday?
But it’s also true that Minnesota has an extraordinarily broad and varied culture. The Guthrie, two significant orchestras, leading regional art museums, a vibrant rock scene. Looking around the country, I don’t believe there is any urban area of the size of the Twin Cities that offers so much or is so diverse culturally.
The NFL is 7 billion dollar a year business and growing. That’s an average of $218,750,000 per team. I know this is just simple math but I would think that Wilf could find a way to finance a new Viking stadium. Maybe he’d be willing to open the books and show that he’s a hardship case and deserves public money but I doubt it.
My nine-year old son has a business renting time on his old Nintendo to younger neighborhood kids for 50 cents an hour. He has been demanding that I upgrade his system to an X Box because his profit margin is too low. He tells me that with summer coming it is harder to keep kids indoors in front of the tv so that now is a watershed moment and that funding must be finalized for the new gaming system. He has declared that I am his local partner and if I don’t cave in he will move to his grandmother’s house, a place where he is more likely to get his way. I tell him I can’t afford it and he says put it on my card. He will raise his fees to 1 dollar an hour because with the new system the kids will pay more to play the same game with better graphics. Of that one dollar an hour I will get a “tax” of 5 cents per hour. He expects to have my card paid off in about 8 years.
What should I do? My son is a valued member of the family. Who else will make his bed and clean up his room if he isn’t here to do it? He currently funds all his nonbirthday/Christmas toy purchases with the Nintendo. At this watershed moment he is about to lose all his customers to the nice weather unless we upgrade the gaming experience. If, before the 8 years is up and the card is repaid, he should decide to sell the X box, he wants it understood that the profits will go to him and none of that will be applied to the credit card.
I don’t want to lose my son. He says that sure he loves the family, but business is business. He knows of a high school kid that gets $1.25 an hour to rent out a new Play Station. He’s a community asset here in our house. He points out, rightly, that I did subsidize his sister’s kool aid stand by providing several packs of kool aid and some sugar. So fair is fair; his business just has a little more overhead, so pay up, Dad!
Bye, Son……
Let them eat cake. I’m so tired of the infants that run the Vikings through tantrums and cry. LA doesn’t want a team. Their governor says the public doesn’t pay for stadiums.
The Vikings had a deal with Anoka county and blew it.
I’m already paying for two stadiums now without much of a voice in it and we have much better places to put our money.
These sports teams and the players treat it like a business and expect the tax payers to think of it as an emotional treasure.
The Wilfs can sell their team to local owners and make money like Red Vikings Nation Guy.
//I think this is objectively untrue. Culturally, if one wants to attribute such a thing as culture to a football team, as much as anything the Vikings unify us as a state. On Monday morning, does anyone you know, football fan or not, not know how the Vikings did on Sunday?
Culture is not an objectively measured metric Hiram, you can’t argue taste. There’s no objective reason for liking country music instead of alt rock. Sports is entertainment, nothing else. I know you guys like to attribute all kinds of other qualities to sports but there’s nothing objective about those claims. Just because a focus group was steered into identifying the Vikings with being a Minnesotan doesn’t make it an objective fact.
One can imagine all kinds of other things that unite us, we are after all the land of 10,000 lakes, not the land of of Vikings fans. On any given weekend I think more people are fishing around the state as are going to Twins games. The idea that we will somehow lose our cultural identity become unhinged at a state if we lose the Vikings is very nearly an insane proposition.
By the way, to answer your question, half the people I know, including myself and my wife will have no idea who won a lost any given football game, on Monday or any other day. There is such a thing as life without sports Hiram. I can currently name only one athlete that plays for a MN team, Mauer- and I don’t know his first name. I have no idea whether the Twins, the Wild, or the Wolves even played a game last night let alone who won.
I’m not saying my interests are better than yours, but here’s the thing, I’m also not asking you to subsidize my interests to the tune of $60 million dollars a year.
I don’t want to take your professional football away, although I don’t think that would be a bad outcome. I just want to you sport guys to play by the same rules the rest of us do. You can get $20 million or less for projects in Henn Co. If that’s not enough, you can ask for more, you can have a referendum. This is why the public portion of the $130 million Guthrie was $19 million. This is why the old Shubert is stilling there like a giant paper weight. Sometimes the answer is no. But you guys won’t take “no” for an answer, you seem to think your entitled to make the rest of us pay, and pay a lot, for your sports. I think this distorts our culture, and our relationships to each other. Someone here described it as exploitation, well that’s exactly right. I’m saying this exploitation distorts and damages our culture, it doesn’t bind us together.
“an average of $218,750,000 per team. I know this is just simple math but I would think that Wilf could find a way to finance a new Viking stadium.””
Wilf is leveraged up to his eyeballs, which means his profits get eaten up by interest payments. Zygi bought an old stadium team for a new stadium price, and that did not create a status quo that can continue indefinitely.
Wilf has made his business decisions, he locked them in when he bought the team. There just is no point in trying to change his mind. The basic issue remains. Do we want what Zygi has to sell, the continued presence of the Vikings in Minnesota. And if so, at what price?
I would like one of the stadium lovers to do a survey of how much twins ticket price jumped in the move to the new stadium. I heard tickets behind home plate are a couple hundred dollars or something crazy like that and you can only get those if you buy the whole season. Vikings tickets were already way more expensive than twins tickets so what would happen to those prices in a billion dollar stadium? Most of the fans who advocate this new stadium will maybe go once every 10 years or so when someone they know gives them a pair of tickets. These “fan” want to buy a stadium so they can watch the team on tv and root for the “home” team. I’m willing to bet that the cheapest seat in a new Vikings stadium would be over 100 dollars.
Just like they cheated on the referendum for the Twins stadium, they’ll do the same here. There will never be a referendum because those politicians want good seats and Zigi will make sure they get them and the public demonstrated their short memories by reelecting all the Hennepin County commissioners who voted for the Twins stadium. Stadiums are a scam that even Ponzi couldn’t dream up.
//Do we want what Zygi has to sell, the continued presence of the Vikings in Minnesota. And if so, at what price?
What do you mean we? We know the answer is “no” if you’re talking to the suckers who actually live the state of Minnesota, Henn-Ramsey Co. etc., that’s why you can’t have a referendum. We all know right now that when/if you get your stadium it’s NOT going to be by popular demand. There’s no grass roots campaign for a stadium here, no demonstrations at the capital. The only reason we’re talking about this is because Ziggy called the Governor, and when Ziggy calls, Pawlenty answers.
On another note, I must say I feel kinda sorry for Poor Jay. I don’t these conversations ever go the way he would like them to.
Paul Udstrand says ” We could free the remaining resources for actual public infrastructure which promotes far more economic activity, prosperity, and cultural diversity.” That is the arguement….or in other words “what is the role of public money?” I agree Paul….this is not a proper role for public money. But this has been decided long ago and we can do nothing about it. I don’t care who becomes Guv….this will be built. Do you really think the MetroDome train station is going to go to waste? Look at how nicely the light rail came together at the Twins Stadium…and now it will extend to TCF stadium. THE DEBATE IS OVER AND HAS BEEN FOR SOME TIME!!!
I will have to argue your statement concerning the promotion of cultural diversity in sports. Sports does not care about cultural diversity….all sports-lovers are welcome. Sports creates very strange bedfellows……that is why we love to watch sports and play sports.
Ftritz,
I never said anything about cultural diversity in sports, and who you go bed with, strange or otherwise, is none of my business 😉
Fritz, watching sports and playing sports probably don’t belong together. If you eliminate bowling I doubt many serious watchers of TV sports participate in any way in sporting activities. You don’t see commercials for the Twin Cities Marathon during a Twins game but you do see lots of beer commercials. How many of those guys dressed up in vikings costumes and war paint do you think actually have played sports since they were in school. They are wrestling with their pillows, running their mouths and hitting the bars; those are the sports for couch potato sports fans.
“I would like one of the stadium lovers to do a survey of how much twins ticket price jumped in the move to the new stadium.”
Let’s keep in mind that most Vikings fans will never see a game at the new Vikings Stadium. I am a fair to middling fan, and I have never attended an NFL football game at the Metrodome, and that’s absolutely typical. I have had Gopher tickets thrust on me occasionally when I haven’t been careful. So quite frankly, I couldn’t care less what they charge for tickets, since I never by them their price is irrelevant.
As a long time Vikings fan, I think I have gotten a pretty good deal over the years. I get to watch the locals from an armchair which is far more comfortable than any seat in the stadium, and during the commercial breaks, I am not forced to watch a bunch of players standing around, I can channel surf to another game.
Given the fact that the vast majority of Vikings fans, in the 49 seasons the team has played here, have paid literally nothing to watch them, I would say on the whole we have gotten a pretty good deal. I for one, would be willing to chip in a few bucks to keep the team here.
“Culture is not an objectively measured metric Hiram, you can’t argue taste.”
I don’t know about taste, but I think there are lots of ways to measure culture. How many theater companies do we have in town? How many orchestras? How many concert series like the Schubert Club or the Chopin Society? Who is playing at First Avenue? Tastes differ, of course, but if you want you can count them, and in monocultural terms, I think the number you come up with will be more than one.
Personally, I don’t like the operas of Alban Berg, Wozzeck is not to my taste. But I have no problem at all in acknowledging that such a performance is a cultural event.
I’m not sure I see your point Hiram, but one doesn’t measure culture, one examines it. It’s a qualitative not a quantitative phenomena. Yes, you can always count stuff, but that doesn’t tell you how much culture you have. A culture dominated by sports doesn’t have more or less culture, it has a less diverse culture. I’m not pretending to make an objective claim when I say I think a culture that has more diverse entertainment options is better than one with restricted and narrowly focused entertainment options.
What I am very concerned about is the rampant spendthrift attitude on the part of some legislators. Looking at some facts;
This is a sports franchise. It is a private entity. It is a private business.
I don’t care that it generates a lot of ancillary dollars and all, the fact remains that it still is a private business.
So why are the taxpayers being saddled with this??? They want to put a tax on something that I’ll purchase or use to pay for this… and all the while, I would not patronize the games because the ticket prices are so out of line that it just isn’t funny anymore.
I suppose if your a solidly minded sports Dad taking your kids to this; and you *live* for football, then you won’t mind paying the tax along with the inflated ticket prices.
I like football but the economy is crunching folks… but liberals don’t see it that way. So someone needs to explain it. How does this tie in to supporting a tax for something I won’t use???
Just to reiterate, something like one million (would I lie?) economic analysis have repeatedly demonstrated that the ancillary economics of stadiums are a wash. They’re entertainment dollars that would get spent anyways. It’s hard to imagine public spending that gets less bang for the buck than stadiums. 98% of all the economic benefit goes to the teams not the public who puts pays 30%-50% of the bill.
And there are economic fairness issues, you picking winners in a huge way. Instead of spending hundreds of millions on general infrastructure or more basic amenities that benefit a large segment of the community and enhance the business environment in general, you’re concentrating huge public sums in a small number of pockets. And because it’s tax revenue of some kind you basically making other entertainment venues finance their competition. All the restaurants on the wrong side of town for instance are collecting and paying the taxes to send people somewhere else. This is why these claims that those who benefit the most pay the most are so bogus.
“Just to reiterate, something like one million (would I lie?) economic analysis have repeatedly demonstrated that the ancillary economics of stadiums are a wash.”
Sure, no one advocating stadiums on economic grounds has ever won the debate. But then the economics of buying a television set aren’t even a wash, yet there one sits in my living room.
As for fairness, I have watched Vikings football for 49 seasons, some of them quite enjoyable. I have never bought a ticket, the succession of Vikings owners who have given me hours of pleasure, have not received dime one for me. I don’t even watch the commercials.
Where is the fairness in that?
“you [are] basically making other entertainment venues finance their competition.”
Cultural mecca though Minnesota may be, there isn’t a lot of competition for the entertainment dollar on Sunday afternoons.
Pro football is a scare commodity. They only play 8 games a year. I don’t count exhibition games because exhibition games don’t count. The Guthrie does 7 shows a week throughout the year. I think they can stand the competition.
Jay, when you wrote that book on stadium games you seemed to have the logic of public stadium subsidies well in hand. What happened? Nothing has changed. The same arguments you made then apply now. The biggest reason the Vikings won’t move to LA is that they can make more money in the dome than paying the price of playing in a private stadium owned by somebody else. There is also a growing awareness that public subsidy of sports franchises has been the driving force behind obscene and escalating player salaries. None of this makes sense for the public to get into this game. It costs too much, the players and owners make way too much money to justify public investment. Nothing has changed. Bad public investment then and and even badder public investment now.
Hiram,
You’re funny. When you put it that way, football’s kinda like gold, so rare it’s worth a billion dollars more than all other forms of entertainment! $40 million a year for 8 games, is a bargain! I’m sure the Guthrie wouldn’t mind paying extra for that kind of competition! Of course the irony of a the NFL, which limits it’s franchises in order to control competition, getting it’s competition to build it’s stadiums may not be lost on everyone.
By the way, it makes me very very sad to know that you have absolutely nothing to do on 44 of your 52 Sundays during the year.
First to Hiram: You don’t need a local team or a public stadium to sit in front of your tv and watch football. You will get at least 2 pro games every Sunday even if you living in North Dakota. Why build a billion dollar stadium so that you can have the knowledge that 8 times a year the game is happening in the same state you live in? I think we could find a higher priority for tax dollars than that.
And to Jay: There is a puzzle here only to people like you who puzzle over how to ram this boondoggle past the generally-opposed public who will have to pay for it. For most of us the puzzle is how to prevent people like you and Hiram from stealing a billion dollars from our taxes at a time when better programs are being gutted and cancelled.
“When you put it that way, football’s kinda like gold, so rare it’s worth a billion dollars more than all other forms of entertainment! $40 million a year for 8 games, is a bargain!”
In financial terms, things are worth what the market says they are worth. As it happens, I am pretty sure we can get the Vikings to stay here for less than someone else is willing to pay, and for a lot less than it would take to replace them.
“Of course the irony of a the NFL, which limits it’s franchises in order to control competition, getting it’s competition to build it’s stadiums may not be lost on everyone.”
The NFL is a very well run business, and that’s a good argument for going into partnership with them. I always thought a strong argument against building the Twins Stadium is the Major League Baseball, is a very badly run business, and not a reliable partner.
“By the way, it makes me very very sad to know that you have absolutely nothing to do on 44 of your 52 Sundays during the year.”
Well, they do have reruns of games on the NFL Network. But it’s true, mostly on Sunday on Sunday afternoons, I sit in front of the blank TV screen, suck my thumb, and long pathetically for fall.
“Why build a billion dollar stadium so that you can have the knowledge that 8 times a year the game is happening in the same state you live in?”
Because the Vikings are my team.
“I think we could find a higher priority for tax dollars than that.”
Sure, if you want to put it that way. There are more important things than football, and in fact I will readily concede that in the grand scheme of things, football isn’t very important. But the fact is, we have made the decision not to spend money on more important things, like hospitals and schools. I refer you to the article on the front page of the Wall Street Journal this morning on cutbacks in Medicaid. So now the question is do we want a football stadium, do we want the Vikings to stay here. And if so, how much are we willing to pay?
//Sure, no one advocating stadiums on economic grounds has ever won the debate. But then the economics of buying a television set aren’t even a wash, yet there one sits in my living room.
Yes Hiram but the Best Buy you bought your TV at wasn’t built with public money, you see the difference right? Sure, we toss in some infrastructure once and while, and do some TIFF deals for other private businesses but there’s no comparison to these stadium deals.
These teams are franchises, that’s the business model. Imagine a guy showing up and demanding public money to build two thirds his new Wendy’s building- in addition to some road improvement and signage. And then imagine the owner of the White Castle across the street saying- as you have- “Sure, I’ll pay for my competition, I can afford it, just like the Guthrie pays for the Twins stadium”.
I get it, you guys like your professional football. But why do you think the government and the taxpayers have an obligation to provide it?
I see no practical reason why the public should be asked to pledge its diminishing treasure to fund ANY commercial enterprise that does not directly service its entire population.
If those who enjoy the entertainment are not willing to pay the price needed to keep the teams at their local locations, along with the other commercial business’ who directly benefit from the activity offered, the teams should find a new home for their enterprise.
In this day of electronic sports entertainment of every kind available via satellite or cable, the need for in-your-face sports convenience is still available. If not in the dedicated fan’s homes, the cheering crowd atmosphere is eagerly waiting at their neighborhood adult refreshment location.
Even continuing the discussion is a clear insult to those of us living on fixed incomes who simply can’t afford to be made to support the cost of providing any new play lots for commercial enterprise that wish to enjoy a fatter bottom line.
Those who want to attract our vote during the next election to every public office that will decide this issue had best expect an increased negative reaction to those candidates who even promise a strong look at considering such a public expenditure.
This issue demands that we take a fresh look at the adage, “Fool me once, shame on you, but fool me twice, then double shame on me.”
Its time for this rape of commonsense to end here and now!
“I see no practical reason why the public should be asked to pledge its diminishing treasure to fund ANY commercial enterprise that does not directly service its entire population.”
The reason is that we will lose the Vikings. The Vikings are as widely followed by the entire population as any entity I can think of. As I said earlier, everyone in the state knows how the Vikings did by Monday morning.
“If those who enjoy the entertainment are not willing to pay the price needed to keep the teams at their local locations, along with the other commercial business’ who directly benefit from the activity offered, the teams should find a new home for their enterprise.”
They aren’t able to pay for it, because the Vikings give away their product for free.
“This issue demands that we take a fresh look at the adage, “Fool me once, shame on you, but fool me twice, then double shame on me.”
Over the years, the Vikings have been good corporate citizens. They have delivered value and pleasure to millions of Minnesotans who have never paid a dime to see them. If you asked me to pay ten bucks a year, to keep the Vikings here, I would say yes. If you asked me to pay a thousand, I would probably say no. I think an offer should be made between those two numbers and that Minnesotans should be given a chance to decide.
One other thing. Demagoguing this issue hurts a lot more than it helps. We did that year after year with the Twins Stadium, and the result was a backroom deal that could hardly have been worse for Hennepin County taxpayers. If we are more upfront about the real costs of a Vikings Stadium and it’s nature as a state asset, I think we can reach a deal that doesn’t hurt a local economy, and will at the end of the day, people will be pleased with.
“Yes Hiram but the Best Buy you bought your TV at wasn’t built with public money, you see the difference right?”
Public money is my money. I don’t see the difference.
The Wendy’s argument is actually much stronger when you are talking about extending tax breaks to the Mall of America, that sort of thing.
The Vikings are one of a kind. It’s one of the many strengths of their business model. I just don’t think that a dollar not spent on the Vikings because they moved to LA would get spent at the Guthrie. NFL football just doesn’t compete with anyone else.
//I just don’t think that a dollar not spent on the Vikings because they moved to LA would get spent at the Guthrie. NFL football just doesn’t compete with anyone else.
Hiram, what are you saying? Are saying that without the Vikings people will just sit home and do nothing? Is that what they do on the other 44 Sundays of the year? They can’t spend it in the Guthrie, for one thing the Guthrie not as big a stadium, that’s not the point. The point is people seek entertainment one way or another, whether it’s bowling, skiing, kite flying, movies, bike riding, whatever. I mean god forbid anyone actually go out and play football instead of just watching it on a Sunday afternoon. These are entertainment dollars, they don’t evaporate without the Vikings they just go elsewhere. Dude you got like a 150 channels on your tv, if there’s no football on you can find something else to watch.
Again, fairness becomes an issue when you publicly subsidize one entertainment venue over another with such huge sums of money. These are taxes, their not voluntary, you’re making bike shop owners, restaurant owners, bowling alleys, movie theaters etc. subsidize someone else’s business, and send potential customers somewhere else, to the tune of $20-$40 million dollars a year. There’s no reciprocity whatsoever. And we’re not talking about tax breaks, we’re talking about hundred of millions of free public dollars.
The fact that the Vikings are the only pro football team in town doesn’t make them invaluable, or priceless. It doesn’t we ought to do whatever it takes or spend whatever they want to keep them here.
Kudos to Jay Wiener for his analysis and to Bill Schletzer for putting this mess in perspective.
Even I, as asportual as a human being could possibly be, acknowledge that the Vikings are a cultural benefit, albeit one which I am essentially incapable of appreciating. The question is and will always be whether “spare” tax capacity (in whatever form) should be used to subsidize their operations.
If it can be demonstrated that an approach is an economic wash, fine. Advance the funds. But if the mechanism that will used to recapture those funds will simply divert existing tax revenues, then we will have to either make up those revenues or reduce our expenditures elsewhere. If that mechanism will simply diverty non-tax expenditures (e.g. the use of discretionary spending) from one venue to another (e.g., from existing casinos to state-operated gambling) then what’s the point?
“I just don’t think that a dollar not spent on the Vikings because they moved to LA would get spent at the Guthrie. NFL football just doesn’t compete with anyone else.”
A dollar not spent on the Vikings also does not require a dollar needed for increased taxes.
NFL football does compete with a lot of other things, some of which offer far more value than the box score, which will still be available for those who can’t live without knowing what yesterday’s effort provided.
That is about the poorest excuse for raising taxes I have ever heard of.
Do something positive about keeping the team here if you like. Start a private fund to collect enough to build them a stadium that will satisfy the NFL owners.
The citizens of Minnesota who are not in love with the need to fund more than one team of football players. Probably then to better appreciate and follow the Gophers do their thing and perhaps with some encouragement, help them perform well enough to emulate the popularity of the Nebraska Corn Huskers.
We have already made an investment for a new stadium, which might also be rented to the Vikings, if that would satisfy their hunger for greater profit.
Sorry about the jumbled wording of that last comment.
That should read:
The citizens of Minnesota who are not in love with the need to fund more than one team of football players would probably better appreciate and follow the Gophers …
Hiram says: “Because the Vikings are my team.”
I think technically they are Zygi’s team, poor leveraged Zygi.
My work place here in Plymouth is full of people who would say that the Packers are their team. They don’t have to live in the same state or buy them a stadium, they just simply embrace them. You, Hiram, can always love the Vikings even when they are in LA. They haven’t been owned by people from Minnesota for a long time. Zygi and his team will go where the money is, always. Your loyalty is a one way street and I don’t think the rest of us should support the delusion that “the Vikings are my team.”
“Are saying that without the Vikings people will just sit home and do nothing?”
They might mow the lawn, or watch the Green Bay, but yes, apart from Vikings games, early Sunday afternoons are not one of the busy times of the week. That’s another advantage of NFL football, by the way. It doesn’t have much competition on Sunday afternoons.
“fairness becomes an issue when you publicly subsidize one entertainment venue over another with such huge sums of money.”
Fairness is both arbitrary and overrated. As a Vikings fan, who has never paid to see a game, I have been leeching off those who pay to see the team, for years. There isn’t anything particularly fair about that.
“The fact that the Vikings are the only pro football team in town doesn’t make them invaluable, or priceless.”
I am not saying they are either invaluable or priceless. I am saying they have a value that can be priced. If the price is too high, let them go, I say. But if the price isn’t too high, I think we should pay it, and keep the team here.
Bill Schetzler is handling this far more eloquently than I hope to but I wanted to chime in.
Whether the Vikings play 8 games a year in LA or San Antonio or Paducah KY doesn’t preclude anyone from adopting them as “your team”. I grew up in Western Wisconsin and was a Milwaukee Braves fan (Aaron, Matthews, Spahn) and I still consider myself a Braves fan despite the fact they are now in Atlanta and I am in Minnesota. Feel free to send the Wilfs money to help them buy a new stadium. I don’t want to spend one dime to do so. It is not a public good.
Just because someone mows the lawn instead of going to a Vikings game does not mean those dollars never get spent. They may get spent Tuesday night at a movie theatre or at Home Depot for a new lawn mower. If I buy tickets for a Vikings game that means I have less money to do other things. So the Vikings compete in the marketplace like everybody else. To say they don’t compete with anything else exposes one’s biases more than reality. The Guthrie is one of a kind. The Twins are one of a kind, the Gophers’ football team is one of a kind (the only D1 football program in the state), etc.
Demagoguing the issue by imputing value to the Vikings where none exists only further clouds the issue. There is no puzzle here, there is no problem here. Simply no money for the Wilfs. Let the Wilfs do what they want to do. If they move I don’t view this as any loss whatsoever.
I guess I run in strange circles because few people I know have any idea what the Vikings did the day before or even care. Those that do know only do so because the media crams it down our throats (15 minutes of the “news” devoted to the Vikings.
Let them go.
Why have the taxpayers pay for a stadium for a billionaire, so that millionaires can play a game. Makes no sense at all.
Update on my son:
Dan talked to his Grandma about moving in and setting up his video game business. She said she would welcome him there if he and I aren’t getting along and I’m really being as unreasonable as he asserts. She did however tell him he would have to earn the money for the new X Box and pay for it himself. That didn’t sit too well. He decided against moving to Grandma’s.
He is currently grounded for being mean to his sister and he’s threatening to boycott 4th grade if we don’t vacation in the Dells this year. I confiscated the Nintendo for the duration of the grounding.
Well Hiram,
As far as Sunday afternoon are concerned I suspect your preoccupation with the Vikings may be a tad on the extreme side. But take heart, if I had my way our public dollars would be going towards health care instead of billionaire welfare programs. If by some miracle my side happens to prevail, and we lose the Vikings, rest assured that folks like myself will fight passionately to make sure free counseling services are available for people like yourself trying cope with the loss of the Vikings. 😉
//They aren’t able to pay for it, because the Vikings give away their product for free.
The Vikings aren’t doing anything for free, they’re making money off those broadcasts, it’s part of the revenue sharing deal.
//Demagoguing this issue hurts a lot more than it helps. We did that year after year with the Twins Stadium, and the result was a backroom deal that could hardly have been worse for Hennepin County taxpayers.
The only demagoguery taking place here is on behalf of the stadiums. We didn’t end up with a bad result in Hennepin County because we argued about building the stadium, we ended up a bad deal because we built the stadium. We didn’t have to build the stadium. The Pohlad’s could have built the stadium. Losing the Twins is an option, one that most people were actually willing to live with rather than being taxed. The demagoguery is that the stadium had to built.
//Fairness is both arbitrary and overrated.
Interesting moral imperative. Well at least your admitting that pro sports subsidies are unfair. I doubt however that one can turn unfairness into an affirmative argument. I also doubt that your notion that fairness is arbitrary or irrelevant is universally held. But hey, good luck with that.
//I am not saying they are either invaluable or priceless…
Actually you are. You keep saying that we can determine the price and decide whether or not to pay, but you well know we’ve already done that. This why we have the referendum law. Any price above $10-$20 million dollars is too high. Any price that requires additional taxes or diversion of existing tax revenue is too high, we know this. This is why you have to do end runs around referendums in order to get stadiums built. I know you want to pretend we don’t know this, but the reason the Twins stadium in MPLS instead of St. Paul is the St. Paul referendum failed, and the Henn. Co. referendum was bypassed. Meanwhile you clearly think that $40 million a year for 6-8 football games would be a good deal. I think when your talking about plopping over a billion dollars into pro-sports you in the realm of “priceless”.
At the end of the day the thing about these fans that want a stadium is that they just “want” it, and short of actually hurting anyone they really care how they get it.
This brings me back to my original comment about the negative cultural impact of the Vikings. This is a sports mentality, winning is all that matters. No matter how unfair, inappropriate, costly, or irresponsible this public subsidy is, they want it. It’s a distortion of our priorities, a distraction of our policy attention, and drain of our public resources. It promotes selfishness, exploitation, cynicism, and apathy. It degrades integrity, maturity, rationality, and public responsibility. We’d be better off without it.
Something that hasn’t really been talked about is the fact that for 95-98% of Vikings fans, where the game is physically played is a moot point. Whether they’re on the road or at ‘home’, for the vast majority of us, it’s the perfect TV sport. Having to go somewhere to watch the game live is expensive, a hassle, and time consuming. Not to mention that if you’re at the stadium and want to see what actually happened on any given play, you end up watching it on the big screen anyway. That versus the NFL package on an HD TV, food, refreshments, and friends, in the compfort of yours or someones home. And, say what, the new stadium won’t have a dome and will be for only 10 events a year? See yah!
To answer Jays question, and echo the thoughts of others here, there are only Three publicly responsible solutions to this puzzle (to the extent there is actually a puzzle). 1) The Vikings don’t get a stadium here and they leave. 2) The Viking build their own stadium, with modest public support i.e. roads, parking facilities, infrastructure, all told probably less $40 million worth of public support. These owners can afford to build these stadiums. The Pohlads could be making their own stadium payments of $20 million a year if they paid just one player (Mauer) $10 instead of $30 million a year. Every other industry in the world has to adjust labor costs in order to manage costs and revenue, why should pro sports be exempt from these basic economic principles? 3) The Vikings and their supporters take their case to the public, make their argument, and either succeed or fail to get the money they want in a properly worded and correctly designed referendum. We have a mechanism in place for this.
The thing is, we have to acknowledge that losing the Vikings, or any other pro sport, forever, is an acceptable outcome. In fact, I would argue that until the pro-sports economy becomes self sustaining, something they could easily do if they restructured their labor expenses, losing teams is actually a good thing for the culture and the community. Like Mr. Schletzer has already pointed out his son, there are times when we really should act like adults, and that’s not a bad thing.
“The thing is, we have to acknowledge that losing the Vikings, or any other pro sport, forever, is an acceptable outcome.”
There it is in a nutshell.
And let’s pause for a minute, and reflect on the huge concession already implicit in a reference to $40 million in city infrastructure expenditures as “modest publc support”.
One last thing about this stadium deal.
I don’t know much about any particular stadiums around the country but I have noticed a couple things about the economy. People seem to be referring to some privately financed stadium in LA that Wilf may move to. You’ll notice no one is building that stadium yet. We’re in a very severe recession here, there are a lot of structural problems with the economy, credit is still tight, the financial sector isn’t paying off like it used. Frankly I find it very hard to believe that someone’s going to come with a billion dollars to build a stadium for someone else.
You have to remember, the whole point of these stadiums is to grow the value of the team and create better revenue streams. One thing it is for an owner to invest in his own stadium, but if he rents a stadium that someone else builds or owns the profit margin disappears, what’s the point? And if the team isn’t gonna pay rent, or share revenue, how are the investors gonna get their money back with interest?
Now I know there are some privately funded stadiums going up here and there, but the economics are questionable. The t-wolves arena may be a template. You’ll recall that was originally built with private money, but after a year or two the owners started whining about revenue and costs and blah blah blah. MLPS ended up buying the stadium and has been stuck with it ever since. I think that’s most likely the plan with these other privately built stadiums. They cobble together the money to build them and then try to dump them off on the public after a few years.
Thing is, as time goes by one way or another public funding for stadiums is getting hard to come by, and the strategies for squeezing the public are diminishing. At first no one paid attention, then they were forced to have referendums. When they lost control of the wording on the referendums they tried the economic arguments, which worked for while, but is now a tough sell. I think this latest strategy, I’ll call it the private finance bait and switch may be the end of the road. These bailouts can’t go on forever, eventually the sports economy bubble has to burst. Every time the public catches on to the strategy they come with something new, but there’s a limit. The reason it took long to get the Twin stadium built was they ran out of winning strategies. I don’t think they’ll be able to pull of that last Henn. Co. board plan off again.
What I’m saying is that I think it may actually be possible that the time is now. If no one can get a stadium built, Ziggy simply has no where to go. There isn’t a lot of time left, it takes a couple years to build a stadium, and they haven’t broken ground yet. Meanwhile the other privately financed stadiums will come online and we’ll find out how that really works. I don’t know what a collapsing sports economy bubble looks like, but it maybe it starts with an owner who’s stuck in a city with a crappy stadium. What does he do? Live with it? Shut it down? Sell it at a loss? Stay tuned. It’s kind of interesting to imagine a situation where the lease runs out and Ziggy’s got nowhere to go, and no prospects. He may be left with no choice but to build his own stadium or shut down the team.
Sorry, in #41 I meant to say fans really don’t care how they get the stadium.
Racino should not be ignored as a means to get a stadium for the Vikings. Polls show that at least 68% of the people in Minnesota are in favor of the proposal ( the number is really closer to 80%) and yet it is totally ignored by the press and the DFL. A racino would be a no tax solution and if you don’t want to go there to gamble, don’t. Presently, the Indian gaming in Minnesota is a $2 billion industry that pays no taxes. Last week, Randy Sampson. of Canterbury Park, offered to pay the state $100,000,000 towards, a one time up front, licensing fee for a license this year. The legislature turned the payment down, with Margaret Kelliher saying on channel 5 news that they didn’t need the money. Meanwhile, education funds repayment was delayed and health care is a mess. The Racino bill would put money- 40% towards a sports facility in the state ( not necessarily the Vikings) 20% towards education, 20% towards biosciences, and 20% agriculture research ( I think that’s what it’s called) The amount guaranteed to the state every tax cycle would be $200,000,000. There would be 2500 slot machines at Canterbury Park. Presently, Mystic Lake has more slot machines than any other casino in the United States! And this would not be an expansion because we already have a card room and parimutuel wagering. It is tied to horseracing so you won’t see many gas stations, bars, restaurants willing to hold a live race meet.
I would also like to point out that the Indian Gaming Council has upwards of 50 lobbyists at our capitol and gives the DFL party over $2,000,000 towards their election campaigns. Why us it that the DFL works so hard to keep Racinos from happening in Minnesota ( the only state in the union with casinos that gets no indian gambling tax dollars) while accepting large amounts of money to keep them in office? Hmmmmm. And ironically, Emmer chose Annette Meeks as his running mate. Ms. Meeks testified for the Indians at the senate committee hearing that tabled Racino.
I think it’s time for the legislature to vote in favor of the 80% that want that racino income to fund some issues for the state. As I recall, the state is not in the business of protecting any industry to the detriment of another. The horseracing industry ( also a $2 billion industry in the state) is in trouble because of lack of parity with other state’s tracks that have casinos. We should look at Churchill Downs that can not compete with Indiana tracks and has shortened the meet and cut purses. Also Pimlico, and Balmoral! Horse racing can be killed and it is growing only in the 11 states that have casinos and racinos. The Dakotas have closed their tracks. While one track in Oklahome just wrote a quarterly check to Oklahoma for education funding in the amount of $40,000,000!
A racino at Canterbury can save the racing industry in Minnesota and keep the Vikings here while still providing much needed creative funding for the state. What’s not to like?
If Ziggy wants to build a casino/racino somewhere to generate the money to build a stadium he’s free to do so. If a casino or racino is such easy money why do you think no one is doing this? Look at the economies of Vegas and Reno, and Atlantic City, they’ve crashed because nation wide gambling revenue is down. The problem with the racino is that the state would be on the hook if it failed to generate the $40 million a year required to pay off the bonds.
Consider this: 18 casinos state wide generate $2 billion in revenue, and spend $1.4 billion on expenses. That leaves about $500 million for tribal disbursements. Now how do they generate that much revenue? They attract 25 million visitors a year. Casino revenue isn’t uniform, some casinos are bigger than others and make more money. For the sake of argument lets calculate an average- it comes to about $28 million per casino. If we assume that racino would make as much, that would be $28 million a year- Ziggy needs $40 million. It looks like the racino would have to outperform the other casinos in the state, why would it do that?
Furthermore, the offer on the table isn’t clear. I’m looking at Dick Day’s (one of those lobbyists Claire complains about) Racino Now! website and it’s not clear. I can’t tell if the offer is $40 million of a projected $100 million in revenue, forever, or up to $100 million. At any rate how is this revenue projected? Is that gross revenue or net revenue? $100 million doesn’t build the stadium, Ziggy’s asking for what $700 million and change. Unless that $40 million is guaranteed regardless of revenue, and unless it’s in perpetuity, it’s no way to build a stadium, or generate a steady revenue stream for the state. Guess what, you’re gambling on a racino. Remember, we’d need that $40 million for the next thirty years, what if the race track fails? We could end up bailing the racino with public money.
I know republicans like the idea of funding government with ponzi schemes instead of taxes, but a few thousand years of human experience have left us with taxes for a reason.
At any rate, don’t count your money before it’s in the bank, and read the fine print, especially when dealing with casinos. My guess is that the offer is for a total of $100 million, and here’s the catch, they’re calling that a licensing fee, and they’re making it a specific amount. Looks to me like they want to pay that, and then never pay another dime, ever. So basically after three or four years of payments, the payments end, forever. This is not how you generate a steady revenue stream for the state. And it won’t pay for the stadium, we’d still have to come up the $600 million.
First off, I need to point out that the State of Minnesota has NEVER received any state money or subsidies. It is a publicly held corporation. It is only asking for a license to have slots along with their card club and parimutuel wagering so as to be on equal footing with other racetracks that are successful. WIthout parity, purses at Canterbury and race dates will decline to the point that the facility will be forced to close. A $2 billion Minnesota industry will fail and the thousands of jobs statewide will go with it along with that tax base.
Mystic Lake Casino is paying each of its members $60,000 per month tax free so I’m assuming that is out of net profits. The only market that would be affected by a Racino at Canterbury would be Mystic Lake. The northern tribes do not make anywhere near that kind of money and averaging their income with Mystic is misleading. Running Aces was taken out of the equation with Canterbury because of its proximity to the highway leading to the northern markets. The $100,000,000 offered by Canterbury for a license fee was a one time offer. The annual license would be set by the state and paid every year, as is the racing license. Life has no guarantees but the $200,000,000 number was projected by the Minnesota State Lottery based on their most conservative estimates. If the state can’t work with numbers that they produce themselves, then what numbers can be trusted? The $40,000,000 annually to the Vikes would cover the cost of financing until the amount spent is repaid. The money spent would come from profits made by the stadium itself and that facility would not belong to the Vikings but to the state to use as it sees fit. A proper indoor stadium is valuable all year and can be home to conventions, trade shows, special sports events, concerts,etc. It would be a valuable asset to the state. Judging by the performance of Racinos in the 11 states that have them, large amounts of money go to those states and their equine industry has been saved as well. Las Vegas is not connected to the racing industry and draws a different type of fan. Racino is not going to be a destination business needing to support hotels, restaurants, other types of entertainment etc. Racinos attract gamblers ( and there are plenty locally that currently drop their money in a venue that does nothing for the state) but also horsemen and that is the attraction. They come to play the horses with a 10% chance of winning. They would also play the slots because gambling is gambling. Its a game of chance. A state regulated casino at Canterbury would actually give the players a better chance of winning because payouts could be regulated.
Any measure used to build a stadium or anything else is a gamble. Judging by the Viking fan base and the fact that the games sell out and attract a lot of people ( becoming a destination and thereby supporting restaurants, hotels and other forms of entertainment) I would say it is likely that they will not default on the loan. It might be a good gamble!
I need to correct myself on #47 I meant to say that Canterbury Park has never received any money from the state. And Canterbury pays taxes.
Another thought that bears mentioning. Zygy has committed to over $200,000,000 to the project and he will only use the facility 8-10 times a year.
“I know republicans like the idea of funding government with ponzi schemes instead of taxes…”
LOL
I’m confused – is gambling now a “family value”?
Claire,
You clearly have some kind of stadium plan in mind beyond a racino. You seem to be talking about some kind of publicly owned stadium. You also seem to be talking about a domed stadium or a retractable roof, which pushes the cost well over a billion.
The fact that Canterbury has never gotten state money is relevant how?
The numbers racino proponents are using appear to be pulled out of thin air. On the Racino Now! website: http://racinonow.com/index.php It’s impossible to figure out where these numbers are coming from. They talk about 18 other racinos in the country but the link that’s supposed show us some numbers just leads back to another page devoid of any data. In some places it looks like the state is supposed to collect 42% of revenues after operating expenses, but they claim they’ll make a billion dollars a year. There’s no breakdown of estimated expenses so I don’t know how they end up with $100 million. In some places they estimate $125 million instead of $100 million.
Several things raise flags for me here. One, if these racinos have been such great deals in 18 other states, why don’t they show us the data on these other racinos? Two, how are these slot machines are one location going to generate almost half the revenue that all the other slot in the state generate? Why will they outperform the other casinos? four, any comparison of this racino to any other racino requires a thorough analysis of the other states, gambling competition, i.e. how many casinos does a given racino compete with etc. I see no evidence of any such analysis, just claims that may well be made up.
Here’s the real problem though with the idea that your going to pay for a stadium with this racino- according to the legislation, here’s how the states racino money gets spend:
1.17(1) Twenty percent of the fund is dedicated and may be appropriated for agricultural…(snip)
1.20(2) Twenty percent of the fund is dedicated and may be appropriated for early
1.21childhood development and family education.
1.22(3) Twenty percent of the fund is dedicated and may be appropriated for research
1.23and development of bioscience and medical technology businesses and employment
… (snip)
2.1(4) Twenty percent of the fund is dedicated and may be appropriated for athletic,
2.2recreational, and extracurricular facilities and programs and to stimulate capital
2.3improvements and employment.
2.4(5) Twenty percent of the fund is dedicated and may be appropriated for general
2.5fund expenditures.
Now, 2.1 (4) is the clause that applies to stadiums. That means 20% of the revenue can go to the stadium. Well, assuming the $100 million a year is accurate, that means you get $20 million for the stadium- and that’s not enough.
In some places on the website they claim or refer to press reports that the racino will raise $40 million a year, but that’s contrary to the numbers they provide elsewhere.
The other funny thing about all this is Dick Day’s participation. He claims that this racino revenue will create thousands of jobs due the state spending it will enable. Well, why is state revenue such a great thing for the economy when it comes from a racino but an downright assault on our basic way of life when it comes from taxes? This would be after all, essentially a tax on the racino.
You’re right! The information on the Racino website is confusing. The reason is since those numbers allocating the money from Racino were published a second bill was presented that changed the percentages to allocate 40% to the Vikings Stadium. Unfortunately, the keeper of the Racino website failed in his job to update and clarify the changes.
The new bill would add another 1000 slots to the already requested 1500 and eliminate Running Aces from the bill. The split would go 4 ways with the stadium getting 40% or $40,000,000. The $100,000,000 is the conservative guess made by the Minnesota Lottery as to how much money would be available as the state’s percentage of the takeout. It is not a number pulled out of the air.
If a casino was not lucrative, the indians would not be fighting so hard to keep their monopoly. And that location is prime in Shakopee because of its proximity to the cities and the airport and all those nice roads built by the state to carry people to the area. The reason there aren’t any more casinos is because the state has not granted any licenses. If they had, I can assure you that Zygy would be the first in line for a license to finance his business.
Parimutuel betting came to Minnesota before Mystic Lake and when the tribes opened their casinos it was very hard on horseracing. No protections were written into the compacts to protect the businesses from what was then a Bingo Parlor just down the road. That was very shortsighted of the legislature. But the compact does not grant the indians exclusive rights. The legislature is free at any time to grant slots to Canterbury. The reason it makes sense to stay with Canterbury is because adding slots would not be a wholesale expansion of gambling. Canterbury already has Parimutuel and a card club. The location stays the same. And the gambling is state regulated, unlike tribal casinos.
There is really no need to compare casinos state by state. They are not in competition state by state. The states that have casinos make money and those that don’t have them don’t make that money. Minnesota is the only state with casinos that does not get a part of the profits. In fact, the state required that the indian smoke shops charge a sales tax on their cigarettes and gasoline so that they wouldn’t wipe out the local private businesses with unfair competition. They collected $19,000,000 and the state then returned $17,000,000 to them.
I brought up the fact that Canterbury has never received public money or special aid because it is important to note that they have only contributed to the state’s economy and that should it fail, the state would not have to bail them out. Canterbury is not asking for a handout. It is asking for the right to conduct business on a level playing field with the other racing states. A racino would enable the track to raise its purses to the same level as neighboring states. For example, we ran a horse in a maiden race last night in Oklahoma for a purse of over $20,000. At Canterbury that same race will only be run for about $7,000. IF the horse wins, the winner gets %60 of the purse, 20% to second, and so forth. Take 10% of first place for the trainer and 10% for the jockey, etc. and it is nibbled away pretty quickly. To support the horse he has to win pretty often to pay upkeep. If the purses in another state are higher, it only makes sense to run your horses in that other state. The best horses are going to go down the road to follow the bigger purses. And the economy will be adversely affected by the loss of literally thousands of jobs when the industry fails.
What does all this have to do with a stadium? Well the beauty of the projected money to the state is that it is (again you are right)a tax but really it is a voluntary tax because if you don’t play you don’t pay. It is not imposed on anyone that isn’t willing to participate. The state can use the money as they see fit. But it becomes a way to build the stadium without imposing a lot of fees, taxes, and charges on the people who don’t want to pay. If the VIking fans want to support the stadium they can gamble all they want and have fun doing it. It’s sure more fun than buying a license plate. And if you play the horses you have a real chance to win at 10 to 1. It’s already set up and the MRC is an actual commission. There will be no additionl cost to the state.
There is no mystery to Racino. It’s a win win for everyone and 80% of the prople want it.
Clair,
Obviously casinos are lucrative, the question is lucrative for whom? It’s not clear that this is a lucrative for the state revenue stream as it would be for the racino owners, or the racers like yourself.
You do need to do detailed financial analysis. And you do need to compare states. A single racino in a state competing against three casino will look very different than a racino competing against 18 casinos, depending on the population, geography, so on. I’m sorry but I’m not going take your word for it, you’re going to have to give me some data. The fact that your not offering me any data, makes me suspicious.
The diversion of 40% instead of 20% towards a stadium actually detracts from the deal in mind. Why divert more money from education and health care? We’re looking at a $5-$10 billion dollar deficit, why put any of this money into a stadium? Giving more money to the stadium actually hurts your case in my mind.
About the casinos and the compacts by the way. You have to remember that whole context of the compacts is about treaty rights and sovereignty. The reason the states have entered into these compacts is because the tribes are sovereign nations. This isn’t about giving Indians special rights, it’s about recognizing sovereignty. This is the legacy your government created when it colonized the land and wiped out the people that were already living there.
This is history. I know you white people like to ignore treaties when they’re inconvenient but them injuns got lawyers now and it’s not as easy as it used to be. The existence of casinos on reservations is the product of negotiation. States like MN that outlawed the form of gambling the tribes wanted to offer had to make a deal. Neither the states nor the federal government could prohibit gambling within the sovereign nations, as a matter of law. You problem here isn’t that the indians have casinos, you’re problem is that you outlawed them in the first place. The whole point of the compacts was to allow gambling on the reservations, and keep it illegal elsewhere. That was your idea, not the Indian’s. Those are your vice laws, not theirs.
Now we have a contract, and yes, like anyone the tribes will enforce the contract, that’s the whole point of having a contract. And I’ll say this as well, there are some very significant differences between the tribal casinos and the ones Donald trump owns or the one at Canturbarry. While the tribes aren’t perfectly transparent, or free of corruption, the tribal casinos are nevertheless a community asset. The proceeds are distributed throughout the Indian community regardless of participation in the casino.
When the tribes fight to protect their monopoly, their fighting to protect their community revenue, not just the “owners”. The tribes use that money for infrastructure, schools, tuition, housing, health care, etc. That money also goes out to surrounding communities and the state as a whole: http://www.mnindiangamingassoc.com/jobs_and_impact.htm It’s not just a business.
At the end of the day Claire, you really want a racino so you can make more money racing your horses. That’s fine, this is America and I wish you well. But you have your infrastructure, and schools, etc. and a tax base to support them. A small number of tribes have managed to reverse over a century of crushing poverty with casinos, and their still not out of the woods. So yeah, they’re gonna fight to enforce the compacts. When you describe this as a “win-win” for everyone, I’m sure you realize the tribes are not being considered part of “everyone”. And by the way, the only reason their lobbying against your racino, is because your proposing it. If you weren’t that money would be going elsewhere.
Paul,
I’m not sure what point you’re trying to make other than to defend the current casino cartel that we have in Minnesota.
Here’s a few facts about gaming in Minnesota:
(1) The tribes do not have a monopoly guaranteed in the compacts. The compacts merely grant the tribes the right to have gaming on their reservations and prescribe the kinds of gaming the tribes can operate. The compact also says that the tribes get to keep the gaming profits tax free. It does not state there will be no competition with tribal gaming.
(2) Minnesota is the only state that does not receive tax revenue from the gaming profits at the tribal casinos in our state. All of the other states that have tribal gaming collect taxes from gaming profits. Moreover, in 2008 the tribes collected over $19 million in sales, gasoline, liquor and excise taxes and the State of Minnesota refunded some $17.5 million back to the tribes. If you think Minnesota benefits from your purchases at tribal casinos, think again.
(3) The tribes have 42 lobbyists at the Capitol and have spent some $16 million in lobbying and campaign contributions (most of which have gone to DFLers). You mentioned sovereign nations and you’re right — the tribes don’t even have to disclose where the money comes from when they bundle it together for the contributions.
(4) Study after study, including one done last year by the Minnesota Lottery, has shown Racinos would generate over $100 million in gaming taxes for Minnesota under the tax rates found in the past racino bills. You can try to diminish the numbers, but everyone knows casino gaming is extremely lucrative. Recent news articles have disclosed that members of the Shakopee Mdewaknaton Sioux Community receive $38,000 every two weeks from Mystic Lake profits.
(5) Racinos in the U.S. generated over $2.5 billion for the 12 states with racino gaming in 2008. They also employed over 29,000 people.
(6) Last, let me mention that nobody is proposing to re-negotiate the compacts or take anything away from the tribes. The tribes negotiated the best compacts in the nation fair and square. All racino supporters are saying is let’s compete. Mystic Lake would have no trouble competing with Canterbury Park when you consider they start off without paying any taxes. The money could benefit all Minnesotans instead of only a few. In a state with some 60,000 Native Americans less than 10% actually receive money from casino profits. And, yes, the money could build a stadium for the Minnesota Vikings as discussed in this article.
Paul,
I remain dedicated to saving the horse racing industry in Minnesota. Without slots at Canterbury the industry is going to fail. When it fails( as when it shut down in 1993) thousands of jobs will be lost. I am more concerned about that part of the business. I have been working with legislation concerning racing since 1983. I was there when it all shut down and when the horsemen resurrected it. And it was by horsemen and for horsemen. We are not looking for a handout, we are looking for a way to stay in the black in an industry that is driven by purses. We already have gambling at that site so this is not an expansion as such. An expansion, which no one really wants, would be slots run amuck all over the place in bars, gas stations, restaurants, etc. that won’t happen because our deal is that to gamble we are tied to racing. The track has to run a certain number of days of live racing to operate the card room. I doubt very much if anyone else is going to put in a track in order to gamble. Running Aces is not owned by horsemen and is not part of our push. IT also does not have the equine industry behind it.
The type of gambler that would be at a track would be someone who likes to use some intelligence handicapping. You’re not going to find big shows and a golf course, tennis courts and what have you. And the track is family oriented on the weekends where families can not take their kids to a casino. If you look at Prairie Meadows, it has not developed like a Vegas Style destination. The same goes for Remington Park. It’s a different style that I believe can co-exist with Mystic Lake and I think would enhance both places.
The Oklahoma Racino designates its money as going to education. There is an indian casino at nearly every exit along the freeways and they all seem to do quite well. Remington Park alone just gave $40,000,000 to the state for education and raised its purses so they are very attractive. The racing industry there was in trouble before they got slots and now it thrives so well that it is difficult to even draw into a race. It does a lot of good and the best horses run there.
The Sovereign nations around here definitely benefit from the infrastructure of the State of Minnesota. And if they weren’t near the metro area with all its drawing power, I doubt the success would be so resounding. Yet all these benefits are enjoyed without paying the price. It’s a pretty choice situation. And don’t give me any of that argument about the early tribes being taken advantage of. Your people are not prohibited from moving into society and being educated and productive. They enjoy the same rights that the average Americans enjoy plus they have a few more thrown into the pot. The northern tribes are impoverished but so are the other residents of the north. Indians don’t have a monopoly on poverty. And the inner city has its poor also. That’s life.
I sympathize with the indians who do not live on the reservations and, with my tax dollars, help to support those that are on welfare and not supported by their indian nations. I also recall when we wanted to have a Racino and send a share of the money to the northern tribes who are not as successful as the metro area tribes. The idea was rejected then also. I don’t think anyone with Racino wants to put Mystic Lake out of business and I don’t think we ever could. We want to create a little competition which might benefit both casinos by creating a “destination”.
The Vikings Stadium was listed as a recipient because it was a way to take care of keeping the Vikings without Taxing the general population. Simple as that. The rest of the money could be put anywhere the state needed it- which just happens to make health care and education, plus much needed research come to mind. When that financing is paid off, the 40% would be directed elsewhere. I could care less how it would be used but the point is that there would be some money going to the state without additional imposed taxes. And with this economy, we need it.
//Yet all these benefits are enjoyed without paying the price.
I’m sorry but 500 years of genocide is a considerable price to pay for some success with casinos in the last quarter of the 20th century.
//It’s a pretty choice situation. And don’t give me any of that argument about the early tribes being taken advantage of.
It’s got nothing to do with “early” tribes, the exploitation and oppression continues to this day.
//Your people are not prohibited from moving into society and being educated and productive.
First of all, I’m not an Indian. Second, native rights are about sovereignty, not participation. Yes, they’re are free to abandon their culture and traditions- they choose not to. clearly they have a different economic model and priorities. Your economic model concentrates wealth in the hands of the owners and winners. Theirs distributes it throughout the tribe.
//They enjoy the same rights that the average Americans enjoy plus they have a few more thrown into the pot.
I know it’s hard to be member of an oppressed majority, but hey, sometimes that’s “life” eh. Of course one of those rights is the right to hire lobbyists.
Again, the Indian casinos generate something like 2.5 billion dollars of statewide economic activity every year. So while Minnesotan’s may not all get bi-weekly checks, you can’t say casino spending doesn’t help Minnesota.
We’re way off topic here but I think the main point that has arisen is that you’re trying to save your industry. That’s fine. But don’t tell me that somehow your doing all a favor. You’re economics remain sketchy. One would think that with all these lengthy posts of yours, and since you’ve been doing this since 1983, you’d be able to point to one study, one link, one set of data somewhere to support your argument that a racino would be a reliable boon to our government revenue stream. You keep talking about studies, but then you got no damn studies.
Instead you’re telling me that as recently as 1993 they actually had to shut down. You might want to consider the possibility that the reason the casino lobbyists are so effective, is that maybe they actually show up with verifiable information of some kind. All you’ve really got here is borderline racists resentment about some small pockets of Indian prosperity and you’re inability to tap into it.
Consider this, seriously- your argument might actually much stronger if you left the anti tribal stuff out. Why are you complaining about casinos and Indian lobbyists? Don’t flirt with racism. Just tell us what you want and why you want it. Be direct and conduct yourself with integrity. You want to save horse racing fine, make your case for horse racing.
Paul,
I believe Mr. Johnson gave you the information you requested. If you can’t believe the truth than I apologise for not being trustworthy and being a realist. I’m sure you’ll argue that. I am not anti Indian Casino and I am not racist by any stretch. I am upset by your averaging all casinos together when it works for you. The indians are not fair to their own people. If they were then the income from the metro area casinos would be averaged out and spread equally among all the gaming tribes. There is a gross imbalance among the tribes and I am tired of the argument that a Racino at Canterbury will hurt the tribes. It will only affect one tribe if we are honest. And the added income to the state would provide health and education to those indians that are not part of the Shakopee tribe. I can hardly be sympathetic to them as they have closed their ranks to their former members who are now on welfare in south Minneapolis. I am tired of Minnesota footing the bill for the infrastructure that leads to Mystic Lake. When they choose to expand, the roads must be upgraded and the cost of law enforcement goes up. What they have given to the community has been a fraction of the actual costs. Let them have their casinos but I don’t understand why the state taxpayers must underwrite them.
It is hard to leave Mystic Lake out of the argument that we need parity with the other racino driven racing states in order to survive. Mystic Lake, and their casino income, are the only real obstacle to the state granting a Racino at Canterbury.
I have no problem with them having what they negotiated. That was a fortunate deal for them and it shouldn’t be taken away. I do have a problem with the money they spend on trying to prevent the taxpayers from creating a level playing field. It amounts to bribery and I don’t think that can be argued. The voters are 80% in favor ( I and all my cohorts just grabbed that number out of the air) but they are denied the vote because our elected officials accept the indian money for their campaigns. After November I believe the story will be a little changed. The people are ready for a change from a legislature that has accomplished nothing and points their fingers at each other saying not me, it wasn’t me. You just can’t fool all of the people all of the time.
Clair,
Please forgive me, I mixed you and Fran Johnson up, I failed to notice that they were separate comments, I thought you had posted twice. Some of my comments consequently are misdirected at you.
However, neither you or Fran have provided the information I’ve asked for. Fran simply refers to “studies” but doesn’t point to any.
I can understand your frustration with lobbyists but your own argument leaves a lot to be desired. You don’t even have an up to date website. You can’t just pull numbers out the air and make claims about studies. Nor does complaining about the way the tribes distribute their winnings or spend their money help your case.
Paul,
Once again, you are correct that the Racino website is hopeless. But it is not my website.
Mr Johnson refers to “study after study” and refers to one of the most recent which was done by the Minnesota Lottery before the Racino bills were written. Their estimate of the amount of money that wuld be available is conservative by their own admission so as not to be overly optimistic. Those are the figures the Racino bill uses. One of the earliest studies was done by the University of Minnesota in 1992 or 93. That was a study on the economic impact of the racing industry in Minnesota. At that time it stated that the industry had contributed over $235,000,000 in fees to the state annually and the closing of the track eliminated over 7000 jobs. I’m sorry I’m not computer research savvy so I can’t tell you where to look. I’m an old designer and not very technically inclined. My grandchildren might be able to locate these studies. I’ve just been around the place long enough to be familiar with the results.
I’ve paid enough taxes to know that the current system is not working. The state HAS TO come up with a creative way to gain income that does not involve taxes. We are already overtaxed and there aren’t enough “rich ” people to try to stick it to. I know that a lot of people don’t pay any taxes and recieve an awful lot of benefits. And I’m not referring to the indians. If we could eliminate the professional welfare people we would probably have a lot more money in the budget. If we could eliminate fraud in the healthcare system we would have more money. And if we could regulate attorneys we would eliminate a lot of waste in the judicial system. Being a really radical person, I have always thought that people that don’t pay taxes should not be able to vote. Sort of like not biting the hand that feeds you. I am also in favor of sterilizing people that have more than 3 children and collect child support. I could never afford more than two and so that is all I have. I think if you can’t afford kids you shouldn’t have more and make someone else support them. I know that circumstances make it difficult for some but if you go on welfare with 3 kids then you already have enough.
Now you think I am an extremist prone to tirades. Maybe that’s true and I’m sorry for whining about my frustrations.
I will continue to work to save the industry because I believe it is good for the state. And I will continue to believe that a Racino would be good for the state and the people. I know that you believe that the Racino is mostly to benefit a few owners and race people. The fact is, the industry has to make improvements and put money back into the business. It wouldn’t be much of a business if it didn’t keep trying to improve itself. It is a public corporation on the stock exchange. There is no one waiting to grab the money. There just isn’t enough to grab.
Paul,
I’m not against tribal gaming and my comments are not anti-tribal. All I’m asking for is the chance to compete.
You say that tribal gaming shares the wealth among tribal members and that may be true. A few tribes have some much wealth from their casinos that they share the wealth among their tribes. But as I pointed out, in a state with some 60,000 Native Americans, less than 10 percent of them actually receive money from casinos. Many of the rest, like those who live on the Red Lake and White Earth reservations are in poverty like they were 50 years ago. If sharing the wealth is so culturally ingrained, why aren’t the other tribes sharing the wealth?
You say that gaming is an unreliable income stream for the state. Yet you point out that tribal gaming generates over $2.5 billion in economic activity about half of which is profit. Which is it? A cash cow or unreliable? I think you’re smart enough to know that gaming in Minnesota generates a ton of money.
//I’ve paid enough taxes to know that the current system is not working. The state HAS TO come up with a creative way to gain income that does not involve taxes.
OK, my last response. Clair, thousands of years of human experience led to the discovery of taxes as the most reliable and stable means of paying for government. This is why the founding fathers gave the government the right to levy taxes instead of opening casinos. This experiment with ponzi scheme funding of government has gone far enough. Over the last 40 years we’ve cut our effective tax rates in half, that’s why we’re running deficits. We’re not going to make up the difference with racinos. by the way, everyone pays taxes in one way or another, and the biggest welfare recipient I can think of is the Pohlad family who are getting $20 million a year free money from the people of Henn. Co.
Fran, I know white folks like to cram Indians into one common stereo type that looks kinda like a sports mascot of some kind, but the reality is that there are several different tribes. Tribes have their own languages, traditions, creation stories, and geographical roots. This is why casino money isn’t distributed evenly amongst all “Indians”. You know, it’s kinda like MN not sharing it’s income tax revenue with North Dakota. The existence of revenue doesn’t make it stable. It’s simply a statical fact casinos bring in $2.5 billion. That’s not a guarantee they always will. Nationwide gambling revenues are down. Again, Nevada is really hurting right now because their whole revenue stream is dependent on gambling revenue which is way down. I’m simply not willing to gamble for government revenue.
One last comment about the data thing. You can whine about Indian lobbyists if want, but you hired Dick Day. What are you getting for money? The Indian’s have a website, I’ve provided the link to that. On that website you’ll find a economic study conducted by an independent professional accounting firm with all the data. Look at your website? I hear there’s a study out there somewhere done by the U of M and the lottery board but apparently I’m supposed to go find them for myself. I’m just saying, quit complaining about the Indians and get your own act together. Make Day earn his money for a change. And I’m sorry but I have a hard time believing that the race track employs more people than the Ford Plant in St. Paul. 7,000 jobs? I’m gonna have to see that data for myself.
Paul,
I did not say that 7000 jobs were lost at the track. I said 7000 jobs were lost when the industry shut down. The beauty of the equine industry is that the jobs are located statewide and not concentrated at the track. It is an agricultural industry so many of the jobs are scattered on farms all over the state. When the industry fails all those farms fail and all those jobs disappear. That number comes from the U’s study (sorry there’s that word again) done when the track closed in 1993. If I knew how to look up the studies I would but I don’t know how. The jobs include ferriers, vet clinics, feed sales, manure concessions, hay haulers and producers, etc. AT the track there are probably only about 1,500 or so. The racing industry affects a lot more people in a broader base than the casinos on a long term basis.
As for you having to gamble for government revenue, the money going to the goverment would not be a gamble. It would be a no risk increase in revenue to the state and no individual tax would be involved. I would call it a voluntary tax. The state would not have to invest anything as the facility is there, the participants would be there of their own free will, the regulatory commission is already in place, and gambling is already happening at the site. All the state has to do is issue the license for slots, collect the fees associated with the license, and sit back and wait for the revenue. The gamble would be taken by Canterbury in building a bigger business and doing what they need to do to stay in business. That is a gamble that is taken by all businesses and the government would lose only their share of the additional revenue if the business fails. The state is not going to be taking a gamble.
You are the one who chose to lump all the indian casinos in the state together and average their income. We have said all along that we only need to compete with one that is lucrative and can stand the competition. Make up your mind what you want to say. Do yopu want to discuss businesses or cultures? I also stated that a Racino can not be compared to Las Vegas style casinos. It is a different clientelle. Racinos are not entertainment vacation destinations, unless it is someone who likes to play the horses. Las Vegas and all the vacation destinations are in trouble because the economy has affected the travel industry. Your comparison is weak.
Also, the Indian society you describe seems to also be one way and then another depending on your argument at the time. If you cannot lump all the tribes together then neither can you lump casino businesses because they all have different circumstances.
I have already acknowledged the weaknesses of the Racino Now website. Dick Day is a face that has brought recognition to our cause. But the Racino struggle has been going on for several years, before Dick Day signed on. It is entirely funded by the horsemen so most of the work done is on a volunteer basis. This is really a grass roots effort on the part of people who are struggling for a way to survive on an imbalanced and hostile playing field.
Paul,
You say that gambling revenue isn’t stable. Well our current deficit shows that income tax revenue isn’t stable either. I’m tired of hearing that we shouldn’t have tax revenue coming off of gambling because it’s not stable. All of our tax revenues are down: corporate income taxes, individual income taxes, sales taxes, property taxes, etc. When the economy goes south, it hits across the board.
My comment about the tribes not sharing the money with poorer Native Americans was a response to your comment that at least the money goes to all tribal members and not just the owners of the casino. That’s bunk. The tribal members are the owners of the casinos, just as shareholders are owners of stock at corporations like Canterbury Park. The difference is that you have to be a tribal member to have ownership in Mystic Lake where anyone can buy stock in Canterbury Park which is traded on the Nasdaq.
As for the data, you’re right that casino gaming is a $2.5 billion tax-free industry in Minnesota. I don’t know how anyone can say that adding a venue won’t amount to a ton of new revenue for Minnesota. It will. It’s just that the current legislative leadership receives the lion’s share of their campaign contributions from the casino cartel. They’re not going to upset the apple cart. You have the right to your opinion, but 80% of Minnesotans don’t agree with you. They want a racino and they want it now.
//The difference is that you have to be a tribal member to have ownership in Mystic Lake where anyone can buy stock in Canterbury Park which is traded on the Nasdaq.
Tribal members do not own stock in the casinos, they simply belong to the tribe. Imagine the Pohlads sending a check out to everyone in in Henn. Co. every two weeks. Again, it’s obviously an economic model you don’t understand or can’t relate to.
The problem isn’t that taxes don’t work. Thousands of years of taxes prove that they do. The problem is we’re not using tax revenue. Yes tax revenue is down- BECAUSE WE CUT TAXES and tried to make up the difference with ponzi schemes. The recession only made it worse. Now you want to expand gambling and tax the track in order to raise additional tax revenue. It’s a convoluted plan. Why not just raise taxes?
Ya know I was trying find Claire’s U of M study and I came across CP’s financial statement for 2009:
http://finance.yahoo.com/news/Canterbury-Park-Holding-bw-1487785416.html?x=0&.v=1
They had really bad year last year and expect the same this year. You want to gamble that slots would save the race track. If they don’t, we out that revenue.
OK you want save the racing industry, fine. But if you want us to change the laws you need to explain why we should care. You’re strongest argument is that we might get some tax revenue out of the deal and the Tribes have casino? I’m sorry but it’s just lame. You’re problem is your own argument.
OK, this really is my last comment about gambling.
Claire,
There is no single Indian culture. There are many tribes, they don’t all have casinos. I’m sorry but don’t know how to explain it any more clearly than that.
That was a comment about Indians, not gambling:) I was my last comment about either really. No really. I mean it this time.
Paul,
It’s been stimulating to say the least. Two different points of view. Your idealistic views on society and my pragmatic views of business.
You do understand that the citizens and visitors of Hennipen county are not members by birth nor are they shareholders, don’t you? They can not be compared to the shareholders of a publicly held corporation. This a business venture that is entered into by choice on the part of an individual. Tribal members are born into their status. All do business but there is no comparison between the two sets of benificiaries. One side is capitalist and the other is socialist. This country is based on capitalism and the sovereign nations are socialists. The problem is when the socialists want it both ways and try to take over the capitalists by using their monetary advantages if they have them and political advantages if they can buy them. Sort of like the next big threat to the US- China!
Paul,
No you don’t understand it. There is no difference between Mystic Lake, which is owned and operated by the Shakopee Mdewakanton Sioux Community and a corporation like Canterbury Park which is owned and operated by its shareholders. Your example of the Pohlads sending money to everyone in Hennepin County is frankly absurd. Let’s stick to the reality here: the tribal casinos have made a few folks very very rich while the vast majority of Native Americans are in the same poverty they’ve experienced for decades.
As for taxes, I’d like to know which taxes were cut. Jesse Ventura cut the license tabs and rebated some money back to Minnesotans. I don’t recall massive tax cuts during the Pawlenty years. What I do know, however, is that tax revenues are down across the board. As I said, the sales taxes, corporate taxes, individual taxes, and property taxes — meaning revenues not rates — are down. If you want to say that we shouldn’t have a racino because the revenues are unstable then we shouldn’t have sales, individual income and corporate income taxes either because those revenues sure aren’t stable either. You mentioned Las Vegas and you’re right that Las Vegas is down. Of course it doesn’t help matters that the President of the United States is telling people not to go to Las Vegas. But what’s also happening is that people are staying home to gamble and they’re going to local casinos instead of Vegas.
You say that people should be given a reason to care about Canterbury Park and horse racing. If you don’t care about Canterbury Park and horse racing, then fine. But I can tell you that 80% of Minnesotans support Racino according to the March 1-2 Survey USA/KSTP poll. I don’t know whether they care about horse racing as well, but I do know that Minnesotans are sick and tired of the status quo. The reason we don’t have a Racino now is because the tribes have 42 lobbyists and spend millions at the Capitol greasing the wheel to prevent a Racino from happening. And unlike Canterbury Park or any other corporation they can take money from the till and put it into the campaigns.
//Tribal members are born into their status. All do business but there is no comparison between the two sets of benificiaries.
Claire,you must direct your comments to Fran, he’s the one saying tribal members and shareholders are the same thing. I’m sorry but both of you seem to be getting more and more confused. I don’t know how make this any clearer.
Fran, I’ve posted a pdf chart of tax cuts here:
http://pudstrand.fatcow.com/Documents/HistoryofIncomeTaxes.pdf
This data is from the MN Dept. of Revenue. As you can see, we have been cutting taxes for decades, most recently in 2000. On top of that, despite the obvious and legal need to raise tax revenue we have refused to do so. Yes, you may now be paying more in property taxes than you used to in income taxes, but you have no one but yourself to blame for that. These tax cuts were your idea and you didn’t bother to do the math before hand. Now you’re asking to take your fiscal advice and use racinos to balance the state budget. I remain skeptical.
Let me clarify, depending on where you are your property tax increases may now have erased or reversed you income tax cuts. Again, this was a simple matter of arithmetic, and perfectly predictable. If you live in a city of 50,000 people that is getting a million dollars a year in state aid, in a state with 4 million people that million dollars is costing you twenty five cents. If you cut that aid in order to accommodate state wide tax cuts, you’re going to have raise a million dollars locally. Now your million dollars is costing you twenty dollars instead of twenty five cents. This is how your $600 tax cut ended up costing you a couple thousands bucks. And since no one bothered to ask what services exactly we were going to cut, or how inefficient the government really is, it turned out that those million dollar state aid checks were actually necessary. I call it the “magic plagn”, cut taxes and wait for the magic to happen.. or the right ponzi scheme. If only magic were a real thing.
Paul,
I’m not sure where to begin. You failed to address any of the substantive arguments I made. Based on your own chart, I am correct when I said that there have been no tax cuts during the last eight years. The last time taxes in Minnesota were cut was in 2000 — a decade ago. The budget situation we’re in have nothing to do with the tax cuts from ten years ago and everything to do with the bad economy. We could help the budget situation in Minnesota by passing Racino, which would generate hundreds of millions in new revenue for the state every budget cycle.
I’m not sure what LGA has to do with Racinos or the Vikings, but I know it doesn’t have anything to do with tax cuts from a decade ago. If you don’t like how much your county and city are charging you for property taxes, you should elect different local leaders. And your math sucks, because the largest beneficiaries of LGA are Minneapolis, St. Paul and Duluth. Most outer ring suburbs don’t receive LGA, but their residents are paying income taxes which are transferred to other cities. The legislature could put the new Racino dollars into LGA if you’d like.
Finally, tribal members are the shareholders of the casinos they own and operate. Mystic Lake Casino is owned and operated by the Shakopee Mdewakanton Sioux Community. Its members receive $38,000 every two weeks from casino profits.
Fran,
We’ve been running deficits for 8 years. The deficits predate the recession. We’ve also been trying to cope with the deficit without raising additional revenue, an unprecedented and obviously failed experiment. The effects of tax cuts are not limited to 8 or 10 years. Decades of revenue cuts are cumulative. The economy doesn’t conform to election dates much to the dismay of politicians. Pawlenty’s mistake isn’t that he’s cut taxes as governor, it’s that he failed to restore the tax revenue he cut before he became governor.
I don’t know if your being obtuse or if I’ve just failed to explain things properly. One last time; tribal members do not own stock in the casinos, they are NOT shareholders. Tribal members to not have to buy stock in order to receive their proceeds, instead they have to demonstrate that they belong to the tribe. Once they’re enrolled in the tribe, they are eligible for gaming disbursements, THEY ARE NOT SHAREHOLDERS. This is a very different model than any privately owned publicly traded corporation. One reason the tribal casinos are organized this way is it was intended to limit or eliminate the involvement of organized crime in the casinos. By guaranteeing that the proceeds go to tribal members, in theory, it limits any reserve organized crime may want to capture.
Paul,
It seems as though you’re the one being obtuse. You want more revenue for Minnesota and Racinos are offering hundreds of millions of dollars every budget cycle only to have people like you turn the money down. If you want more taxes, you should be pumped up for Racino. As for the budget, you’re wrong when you say that we’ve ran deficits for the last eight years. We have a balanced budget requirement. You act as though spending hasn’t gone up — it has.
http://www.mmb.state.mn.us/doc/budget/report-spend/nov08.pdf
I’m not sure what your point is about the tribes. The Shakopee Mdewakanton Sioux Community owns and operates Mystic Lake. If that’s not like being a shareholder in a corporation, I don’t know what is. Although you’re right if you’re saying that nobody else can be shareholders in the case of Mystic Lake where anyone can buy stock in Canterbury Park. The SMSC has had a history of keeping out new members of the tribe even when those people have more tribal heritage than some of the current members.
Yes Fran, when spending goes up and revenue goes down you get deficits. Who’da thunk? Pawlenty’s never acutally balanced the budget in terms of revenue and spending. He’s used accounting tricks to delay payments and move expenses, he’s stolen money from education and other pots. He’s depleted our reserves. This is why our deficit is now so huge, the largest in MN history in fact. There aren’t any tricks left. All the temporary accounting tricks just kicked the can down the road under the assumption that some day the magic would happen. Ooops, no such thing as magic. Who knew?
Paul,
You rail against Pawlenty as if there wasn’t a legislature. The DFL has a firm lock on both the House and the Senate and you know what, they cut programs and borrowed from education too. And, more importantly, they turned down a $100 million upfront licensing fee for a Racino at Canterbury Park. And by the way, as you can see from the chart I provided, spending increased during the Pawlenty years it did not go down. The spending didn’t increase as much as the DFL wanted to spend, however.
So which is it, Paul, do you want more revenue or don’t you? A Racino would provide the state’s coffers hundreds of millions every budget cycle. You can’t be for more spending and against Racino. You can’t have it both ways.
I repeat: The government needs a reliable and relatively stable source of revenue. CD is currently losing money according to it’s own financial statements, and Claire says horse racing in MN is currently a failing industry in danger of collapsing. CD has already shut down once. You want to gamble that adding slots will save the race track. This is a gamble, with Mystic lake only a few miles away there’s no guarantee that the slots will save the race track. You want to tie state revenue to a race track that may go out of business anyways, it’s that simple. Whether you get your slots or not, the state can not count on this revenue. You say you have revenue estimates, but predicting revenue under these circumstances is a very dicey proposition, gambling revenue is down nation wide. You say gambling revenue nation wide is irrelevant because horse racing is a different clientele, yeah, a smaller clientele apparently with less money since the track losing money and has shut down once already. Enough with the gambling and the ponzi schemes, our deficits belie that as a failed economic policy. I understand you want to save the race track, but your argument that you’ll also save the state budget is weak. My advice, you need to be selling horse racing, not budget schemes and animosity towards Indians. You act like saving the race track is incidental to fixing the budget and breaking the tribal monopoly on gambling. Tell me why I should care about the race track? And if we use slots to save the race track, why not put them in gas stations to raise highway revenue? Why not put them in bus stations to lower fairs? Why not put them in bars to offset the effect of no smoking laws? And guess what, if you do put slots at the race track, and then someone else wants slots to save THEIR industry- you’ll be standing right next to the Indians lobbying against it.
The brunt of the responsibility for these deficits rests on Pawlenty’s shoulders because he’s vetoed all but one attempt to raise revenue. I know republicans like to rewrite history but I was there. What was that one tax increase? The welfare program the Pohlads that built the Twins stadium- which brings us back to stadiums!
Paul, I was at the track Sunday and it was packed with fans and families. It’s great entertainment and Canterbury has done a great job attracting new fans. The reason the track is in trouble is because the racino states are able to offer larger purses and attract better horses. Without the parity I have discussed many times, the track will not be able to get enough horses to fill the races. There needs to be something like 1800 horses on the grounds to have a successful meet. When there is a racino added to Canterbury the purses will be on a par with the other 12 states and racing will be a guaranteed success. Canterbury is one of the nicest and best tracks in the country at which to stable horses and race them. Minnesota has an ideal climate in the summer compared to the more southern tracks, and we have a large number of horse fanciers in the state. There is absolutely no reason the track would fail with a Racino. The sport’s popularity is growing, it’s the lack of a level playing ground that is hurting it.
With a Racino, the state would be guaranteed a large influx of cash without imposing higher taxes on anyone. I guess you are stuck in the welfare mode that thinks the only way to make money is to raise taxes on the rich. The lower income people don’t pay as much and in some cases get refunds without paying anything in. If taxes keep going up on the businesses and the wealthier taxpayers, those people will just leave and then there won’t be anyone to support the rest. A creative new way to raise money does not mean to raise taxes. What’s creative about that?
//With a Racino, the state would be guaranteed a large influx of cash…
Again with the guarantees.
Lets see you come up with something better that will give the state hundreds of millions in new income that doesn’t involve taxing something! As for guarantees, nothing in life is guaranteed except death and taxes. We already have enough taxes. Think of something else. And it can’t cost the state anythjing either!
While the Racino will cost nothing to the state and the state won’t have to guarantee it, it’s about the best bet we can make- a safe gamble, if there ever was one. Why turn down all those jobs and income when the state is in so much trouble?