‘No!’ is current Capitol answer to a public subsidy for Vikings stadium

“Just say ‘No’ ” seems to be the operative phrase at the state Capitol these days regarding any form of public subsidy for a Vikings stadium.

This morning, a coalition of Republican and DFL legislators held a news conference to announce their opposition to more state-sanctioned gambling as a way to create a pot of money for a stadium, or for any other purpose.

The philosophical range of the group was breathtaking: Sen. Dave Thompson, from the libertarian right, to Rep. Frank Hornstein, from the progressive left — and a lot of political shades in between.

All were of one voice on increased gambling: “No.”

Group opposing all public stadium subsidies
When pressed further, those at the news conference — DFL Reps. Hornstein, Ann Lenczewski, Jim Davnie, Diane Loeffler, DFL Sens. Scott Dibble and Tony Lourey and GOP Sens. Thompson, Warren Limmer and David Hann — said they would oppose all forms of public subsidy for a Vikings’ stadium.

Sen. Scott Dibble
Sen. Scott Dibble

“None of us wants to see the Vikings leave,” said Hann, which is a ritualistic thing for legislators to say.

But then he went on to say that pro sports teams should not be allowed “to blackmail the public. … This [huge subsidy] is not done for other businesses. Why should it be done for the Vikings?”

This group of legislators said they wanted to focus on their opposition to gambling as a revenue source for any public project, not talk about the Vikings. But, of course, at this moment the two are entirely linked.

Given the anti-tax sentiment of the Republican majorities in the House and Senate, those seeking a way to get funds for a stadium project are looking for some other source for a state contribution.

At this point, finding a majority of legislators who can agree on a way to get the state involved in the Vikings project seems nearly impossible.

One possible way would seem to be racinos. Over the years, proposals for expanding gambling at the state’s two racetracks have drawn overwhelming public support in polls. That plan, though, has significant opposition from Indians tribes that operate casinos and from spiritual leaders.

If racinos — or a Block E casino — can’t get support, what can?

There has, of course, been some talk of directing Legacy Fund money to the project.

A headline in the Star Tribune this morning read: “Dayton eyes Legacy funds for stadium.”

But even the mention of somehow linking the Vikings to money that is, under the amendment, to be directed to arts and culture has drawn quick, vociferous opposition from legislators.

When the subject of legacy money was brought up to Dayton at a news conference on Wednesday, his response was positive in only one regard. The governor said he’s interested in looking at any proposal that shows a can-do spirit.

“I appreciate the spirit [of the legacy suggestion],” Dayton said. That wasn’t exactly an endorsement.

Frustrated governor finding few allies
The governor’s great frustration is that there are very few people coming forward with ideas that might work. He’s surrounded, however, by legislators willing to shoot down all ideas.

“If this is driven by those who oppose something or everything,” the outcome could be that the region will lose the Vikings, Dayton said.

Minneapolis Mayor R.T. Rybak was to present ideas at a news conference this afternoon for putting Minneapolis into the stadium game. But Rybak is expected mostly to refine a proposal that involve a sales tax in Minneapolis.

He not only seems to have little support for that on his own City Council but also seems to have little support — if any — from the Minneapolis legislative delegation.

That, of course, is what makes the stadium debate so interesting. At the moment, it’s so easy to say “no.” There will be a lot of ducking for cover if the Vikings actually move the franchise.

All of this makes it clear why Dayton is pushing for the special session. He’s demanding that legislators show their hands.  Up or down on the Vikings. Up means a solution. Down means possibly losing an immensely popular amenity.

Republicans clearly see they’ve been put on a spot by the governor, and they’re trying to counter.

Hann, for example, seems to believe the governor is “rushing” to hold a special session in advance of the next state economic forecast. Most believe that forecast will not be positive, meaning the state’s duct-taped budget will be back in red ink.

Sen. David Hann
Sen. David Hann

If the budget forecast does show a deficit, Hann believes, there would be absolutely no appetite for spending money on a stadium.

Special session speculation
Best bet on a special session?

Dayton will call it. There will be a piece of legislation — calling for a myriad of user taxes to be applied to the stadium — and it will be voted down. There will be a series of amendments, proposing such things as gaming to fund the project.

A source for charitable gaming said today that he thinks that one form of gambling — pull tabs in bars and bar bingo — could slide through. The charitable gambling crowd believes it could substantially improve its business and therefore its contribution to the state if a bill allowing electronic pull tabs and bingo was passed.

Currently, charitable gaming puts about $40 million annually into the state general fund. Supporters of electronic forms of the old games believe that amount could double.

Even though this measure has support from a handful of powerful legislators, it seems unlikely it could wiggle through a special session.

So, if everything remains “no,” what happens?  

If the Twins stadium fight is the model the Vikings stadium debate will follow, the debate will go on for at least a couple of more years. If the North Stars or the Lakers are the model, the team will leave.   

Oh, how pols hate having to decide between two unpopular things.

Which again made this morning’s anti-gaming news conference — and the cross section of pols who attended — so interesting.

Start with the libertarian/Republican Thompson.

Libertarians generally believe that people should have a right to choose how they live their lives and spend their money.

Much of the public support for expanded gambling seems to be based on the notion that nobody is forced to walk into a casino and lose money.

“I have no problem with people having a poker game in their garage,” said Thompson. “But to me, that’s different than having the state put its seal of approval on gambling.”

If that garage poker game grows to include slot machines and a craps table, would Thompson have a problem? Would he want taxes collected?

“At some point, I suppose it does become a business,” Thompson said.

Wherever that point, the state does have the right to create regulations that guide the business.

Hann also seemed to want to hold two different positions at the same time.

At one point, he talked about how the “majority of Minnesotans” are so frustrated about the idea of having to spend scarce resources for professional football.

Still, he rejects racinos, which the majority of Minnesotans seems to believe are reasonable.

Gambling expansion  ‘negatives’ listed
Hann and others seem to believe that supporters of racinos don’t realize how costly gaming is — costly and regressive.
Hann said that studies he’s read show that 48 percent of casino profits come from problem gamblers.

“Look, if a casino is such a good idea, why not encourage more than one?” he said.

Lenczewski was every bit as adamant in her opposition.

“It will create more problems than it solves,” she said of gaming, adding that it’s essentially a “super tax on a subset.”

Additionally, she said there would be a substantial “displacement cost” that comes with gaming. Every time gamblers lose at the casino, it’s less money being used elsewhere, meaning a drop in sales taxes.

Davnie, too, was adamant in his opposition, predicting that a casino in downtown Minneapolis would create “a hole in the city.”

At first, a Block E casino would attract a “suit-and-tie” clientele. But in time, that would diminish and the clientele would “go down a notch” and then “go down another notch.” And the social problems would grow.

The legislators were receiving the support of the Joint Religious Coalition and the Minnesota Family Council, again two groups that seldom agree on anything.

Dayton is to meet with legislative leaders Friday. At this point, it appears that none of the leaders has any plan with any real support.

“We should treat the Vikings like any other business,” said Hann.

That means they should get sales tax breaks on construction materials, public support for infrastructure, perhaps some form tax relief in other areas.

“That’s what we do,” he said.

The big gamble: Is that enough?

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.

Comments (14)

  1. Submitted by bernie hesse on 10/27/2011 - 04:09 pm.

    What a quandary to be in and the votes to pass a stadium bill aren’t there. The best proposal so far has been the Marty-Rumbeck stadium for a buck deal along with the parking deck. I think the legislators who vote for a stadium handout (either party) could face losing their seat in 2012. With a number of constitutional amendments on the ballot- I wonder if the ruling party at the capitol will put it on with their other buffet of misguided iniitatives. This is fun to watch.

  2. Submitted by Paul Udstrand on 10/27/2011 - 07:39 pm.

    I really don’t understand why Dayton is sticking his neck so far out on behalf of the Wilf’s. For a guy who one an election by less than 1% you’d think he’d be little more reluctant to alienate the majority of Minnesotan’s who don’t want tax money going to the Vikings. This is also a huge distraction at a time when Democrats are trying to drum up attention for their jobs agenda. Instead of talking about education and innovation, etc. the big story is all the Vikings stadium plans. And it all seem dishonest on Dayton’s part. He started by saying that he’d only support a deal that was good for taxpayers, but clearly he’s supporting the deal that the Wilf’s want, despite the fact that it’s a bad deal for taxpayers. I really don’t get it.

  3. Submitted by Bruce Pomerantz on 10/27/2011 - 10:05 pm.

    Let’s assume that the revenue needed from government for the Vikings stadium comes into existence. That means government pays for 2/3 the cost of the stadium and Wilf-the-Developer-Who-Owns-an-NFL-Team-for-Development-Purposes pays 1/3 AND gets to say where the stadium is built, according to Dayton.

    The minority party in a business transaction gets to decide where the stadium is built. Only in America–uh, make that “Only in plutocratic America.”

  4. Submitted by Steve Titterud on 10/28/2011 - 09:12 am.

    The idea of a handout to a professional sports team is REVOLTING to the majority of Minnesotans.

    But the Vikings organization has made it a lot worse on themselves.

    The Vikings of the past had some character. It came out in a lot of little ways.

    The Vikings of today are a pack of money-grubbing fools who figure we must be fools, too.

  5. Submitted by Paul Udstrand on 10/28/2011 - 09:39 am.

    The Vikings currently play at the dome. The dome employs 19 people full time- that’s right 19. And the dome is open year round, if the new stadium doesn’t have a roof it won’t be, so like the Twins stadium it will sit there empty for months out of the year- we’d actually lose jobs for a billion dollars.

    I’m pretty sure this would be the largest public subsidy in MN history for any private company. It’s important to remember how small the franchise really is. Usually when we talk about big subsidies for private companies, those companies deliver a big economic impact. NWA for instance employed thousands of people when they got their $300 million for a new maintenance base, and they promised to create 300 more jobs. NWA also had a certain number of MN investors holding NWA stock, the Vikngs are privately owned, we can’t even claim to be protecting any investors with a Vikings subsidy. The MOA added millions of square feet to the Twins cities and employs hundreds of retail workers. Even the benefits of the NWA and MOA subsidies are questionable, but the the Vikings? In addition to the 19 jobs at the dome, (which aren’t even Vikings dependent jobs, remember, they only play 8 games a year) they have what 120 or so employees including the 56 athletes. And by the way, the payroll for 56 athletes is $140 million a year.

    These stadiums deliver zero economic expansion, we just move 19 jobs (or less) from MPLS to Arden hills, or from one side MPLS to the other. These are really small companies to be receiving such huge and disproportionate subsidies. Typically a payroll of $140 million dollars will employ several hundred people, in a football franchise it’s 56. And sports franchises are unique business entities in that they are actually prohibited from expanding in any meaningful way. They can’t hire on more athletes, and they don’t need more coaches, executives, or even equipment, it’s not like they’re gonna buy more footballs with the extra money. These are particularly bad private entities to dump public dollars into.

  6. Submitted by Arito Moerair on 10/28/2011 - 12:25 pm.

    Great post by Paul. Good economic points.

    Now, I don’t believe for one second that Dave Thompson is against gambling on moral grounds. I think his problem with gambling is the same as all the other Republicans’ problem with gambling — it’s a revenue source. They see it as more money coming into the government that the spend-happy liberals will just funnel into communist ideals like education and roads.

  7. Submitted by RB Holbrook on 10/28/2011 - 12:25 pm.

    Casino gaming is not an infinite source of revenue. The industry is being spread too widely to sustain itself at anything like the current levels. Relying on that as a source of revenue is bound to be a disappointment.

    Time for some new thinking. Here’s a Modest Proposal: legalize prostitution for a chain of state-run brothels. All of the revenue from that activity could go entirely for pro sports subsidies (apt, don’t you think?). There would be no problem with needing to renegotiate compacts with Native tribes, and we would not run afoul of federal laws (as we might by legalizing recreational drugs). It’s time for Minnesota to step to the forefront, and be an innovator in corporate welfare and boosting the egos of the very wealthy.

  8. Submitted by Matt Brillhart on 10/28/2011 - 12:33 pm.

    Paul- you bring up a lot of great points. You should write a letter to the editors of the Strib/PP/MNDaily. I think your arguments deserve a wider audience (no offense MinnPost).

    It is really refreshing to hear an elected official (Sen. Hann) use the word “blackmail” to describe this situation. Because that is exactly what it feels like: “Pay us now or we’re leaving”. Unfortunately, Governor Dayton is 100% convinced that they will leave. From his mouth and from our major media outlets, we rarely hear about the likelihood that another team (Chargers, Bills, Jaguars, etc) would relocate to LA. Or how far the LA plan is from actually happening. I’m starting to wonder if the Wilfs donated to Dayton’s campaign. Dayton fought hard for the people during the shutdown, but he’s not doing it here.

  9. Submitted by Tim Brausen on 10/28/2011 - 02:00 pm.

    Governor Dayton has consistently supported a funding source for the new Vikings stadium, from his campaign days until now. He views it as a cultural asset of the community, like the Guthrie Theater, and other such assets. I don’t hold it against him that he adopts this viewpoint, as he’s been consistent and up front about his support of this idea for years.

    However, I agree with the vast majority that we should not be subsidizing this billion dollar enterprise, beyond what we historically do for new business developments (sales tax relief for construction materials, infrastructure improvements, tax increment financing, financial guarantees possibly.) The press of other more important public needs are too demanding. Let’s spend money on infrastructure and schools, things that will bring a long term benefit to the community.

    I agree that the Marty-Rumbeck stadium proposal has merit, giving the Vikings the stadium for a dollar, in addition to the other standard support mechanisms. The Dome has already repaid our public investment, and reinvesting it by giving the land to the Wilfs is another worthy cause. I know there would be plenty of other businesses willing to take free downtown land and develop it for their business needs. I think the Vikings ownership will be too, if that is the best deal they can get.

  10. Submitted by Richard O on 10/28/2011 - 02:07 pm.

    “I think the legislators who vote for a stadium handout (either party) could face losing their seat in 2012.”

    I will be tracking my district representatives in the legislature and I will vote against those of any party who oppose a referendum on the Viking stadium.

  11. Submitted by Bernice Vetsch on 10/28/2011 - 04:28 pm.

    It’s not just the stadium Mr. Wilf is concerned about. When he develops the new suburban-sprawl “village” with shopping and entertainment in addition to the stadium, he will surely need public infrastructure — including but not limited to water/sewage, electricity, roads and streets and public schools, bus service and, no doubt, light rail.

    The stadium looks like just the beginning of an expensive several decades unless the state says NO right now.

  12. Submitted by Paul Udstrand on 10/29/2011 - 09:48 am.

    For those who are interested I’ve written a more complete analysis of stadium spending on my blog:

    http://pudstrand.fatcow.com/blog/?p=108

    Not surprisingly, it turns out that once put more than $30-$40 million or even less into public sports subsidies you turn these marginal assets into economic liabilities.

    The only thing the Vikings really contribute to the local economy is around $12 million a year worth of income taxes. Everything else is fluid entertainment spending that happens with or without the Vikings. In fact, you can even mount a decent argument that it’s better for our economy if the $40 million a year people spent on Vikings tickets were distributed more evenly in the local economy rather than dumped into 56 millionaire player pockets. We’ve reached a point where one can actually argue we’d be better off without some of these sports franchises, and we’re certainly better off without the public debt tied to their stadiums.

  13. Submitted by Jim Halonen on 11/01/2011 - 03:48 pm.

    I’m trying to reconcile how a couple of different issues are battling for face time these days: Scads of public school districts across the state have levy referendums this fall – because of alleged budget woes…. and there is consternation of if/how to publicly fund a sports stadium. If there is not enough money to fund something that is constitutionally required, it’s astounding that a private business/entertainment stadium is even on the table for discussion.

  14. Submitted by greg copeland on 11/01/2011 - 08:20 pm.

    Good People of Minnesota:

    I am claiming VICTORY on behalf of all those 500 citizens who attended the Ramsey County Charter Commission Public Hearings to oppose the Ramsey County Commissioners efforts to ram a $675 million, 30 year half percent sales tax increase down our throats. The Ramsey County Commissioners who contracted in May 2011 with the Vikings to take away our Ramsey County Charter rights to a People’s referendum vote on the $675 Million Sales Tax will pay the price for their disgusting unethical acts of public duplicity to viloate our Ramsey County Charter.

    I want to give credit to the Leadership of the Minnesota House and Senate and their membership for standing up to Governor Dayton who has completely embraced the Ramsey County Board’s $675 Million NO REFERENDUM Sales Tax Increase for nine months!

    The reality is folks, had Governor Dayton embraced the People of Minnesota,instead of Zygi Wilf and the so called “People’s Stadium”, as the Governor Dayton coined it; NOBODY WOULD BE TALKING ABOUT A $1 BILLION PUBLIC SUBSIDY FOR A NEW JERSEY BILLIONAIRE IN THE MIDST OF A MINNESOTA HOUSING AND JOBS DEPRESSION…when the State of Minnesota is out of cash!!!

    Wake up Governor 218,000+/- People in Minnesota are ‘officialy’ JOBLESS!!!!!!

    Governor Dayton, rails against a tax system he says is benefiting the rich, and then he spends nine months being the deal broker for a New Jersey Billionaire, to hand him no less then a Billion Dollars of our public money, principle and interest, for a new Viking’s stadium.

    Perhaps the Viking’s owner should spend more time with his coach to figure out how to win more than two games this season with his team of millionaire players at the HHH Dome…oh no, now it is the “Mall of America Dome”…Ted Mondale should be embarrassed at selling out the HHH Dome moniker to subsidize the Viking’s rent, so much for cultural heritage.

    The People of Ramsey County won this VICTORY under a new GOP Legislature, something Hennepin County voters were denied under a DFL controlled Legislature, when the opportunity to have a People’s Referendum on a Stadium Sales Tax was “exempted” in 2006 with then- Gov.Pawlenty’s complicity.

    Thanks to the new GOP Majority Leader Amy Koch and Republican House Speaker Kurt Zellers and all the members of the Legislature, of both parties, who stood with the People in opposition to our Millionaire Trust Fund Governor; and the Dayton-Ramsey County Board Plan to take our money,$675 Million, in sales taxes for 30 years without our permission, and hand it to an out-of-state Billionaire to enhance his private fortune.

    MINNESOTA POPULISM IS MAKING A COME BACK! Governor Dayton would serve the People best by letting his buddy Zygi build his stadium on his own dime.

    Of course Governor Dayton could endorse the Runbeck/Marty Plan and bring back the HHH Dome for a buck and join the growing ranks of Minnesota Populists! Being an optomist is important in politics…reform is just around the corner, or the next Viking’s winning season!

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