The less said, the better. That’s a mantra that smart politicians live by. In every controversial proposal and program, after all, one or another of the gory details is bound to offend a fairly broad swath of constituents.
So it goes with the Vikings stadium.
While our leaders are not explicitly lying, they are — well — refraining from emphasizing certain points in the current plan in an effort to get the darned thing built. Among them:
1. Money would be coming from the state’s General Fund. In his press conference announcing the deal, Gov. Mark Dayton proudly declared that money for highway maintenance, schools, nursing homes and other state functions will not be touched; all funds to pay for the stadium are supposed to flow from taxes on charitable gambling, in particular electronic pull-tabs and bingo — though I could not find any specific provision for this in the proposed legislation. (Seventy pages of legalese is a lot to read; so maybe it’s in there somewhere.)
This notion, in any case, is sleight of hand, or rather, sleight of mouth, because charitable gambling revenues normally go directly into the state’s General Fund. Yes, charitable electronic gaming is new, so the revenues would be new, but if the stadium deal were not on the table, that dough would wind up you-know-where.
When Senate Majority Leader David Senjem, R-Rochester, one of the bill’s co-sponsors, was asked about the semantics, he suggested that maybe the money would be placed in a special account. Maybe, but the bill, as currently written, clearly states that payments for bonds floated to build the stadium will come from “money appropriated by law from the general fund.” I rest my case.
2. The stadium would cost a whole lot more than $975 million. OK, that’s the amount needed to build the thing, assuming no cost overruns. That total, however, does not include financing costs. If you’ve ever looked at what you will have paid for your house if you stay in it for 30 years, you know that interest alone could have bought you another, probably more expensive dwelling.
“Stating just the principal amount is a common and misleading device used to promote a project,” says Wilson White, a New York municipal bond expert. Generally, he adds, repayment plus interest for long-term bonds comes to about 10 percent of the “issue amount” — or face value. Ergo, annual debt service on just the state’s $398 million portion will equal about $39 million. Multiply that by 30 years, and the total cost jumps to $1.17 billion.
Minneapolis Mayor R.T. Rybak has pledged, pending City Council approval, another $150 million contribution, for which state bonds also have to be floated. That adds $450 million to the tab. Of course, the Vikings will also be borrowing and paying interest, no doubt at a higher rate than the state, but the total for the public share of the project comes to $1.62 billion.
That’s not accounting for operating expenses; the proposed legislation contemplates allocating $7.5 million a year for them. I would add it all up, but my calculator just broke. As they say: “Uff da.”
3. Appropriation bonds, which would be used to finance the stadium, carry a higher rate of interest. Ordinary general obligation bonds—those backed by the full faith and credit of the state, carry an unconditional guarantee that it will repay, come hell or high water. For that reason, they are much less risky than, say, corporate bonds and come with below-market interest rates.
Appropriation bonds are different: The Legislature must specifically allocate money each year to repay them. If revenues from those electronic gaming gizmos do not yield enough to foot the bill (or even if they do), Minnesota could conceiveably decide to stiff the bondholders. A default is unlikely because it could send the state’s credit rating right into a dumpster, and legislators would no doubt do whatever it took to stand by the state’s obligations.
For that extra danger, however, the state will have to pay a risk premium to investors, that is, a little more vigorish. Instead of 3.6 percent a year, what the state’s current credit rating merits, according to Wilson, it would probably have to pay 3.75 percent. (Add another $25 million or so.)
Wilson, however, is not even sure that investors these days would want to purchase appropriation bonds whose income comes only from charitable gambling. They prefer bonds that have the full backing of the state, he says.
4. It’s not really the People’s Stadium. Just because you say it is doesn’t make it so.
True, any taxpayer will be able to walk or drive by and enjoy a quickened heartbeat upon viewing the grand public work once construction is complete. Attending a Vikings game, however, still will require discretionary income. The average ticket, according to SeatGeek.com, runs about $57, and a fancy new stadium could further boost the price. All money from football ticket sales will go into the Vikings’ coffers, presumably to repay their loans and defray other expenses.
Taxes from charitable gambling that will pay the freight for the state’s share are among the most regressive, according to John Spry, associate professor of business at St. Thomas University. A regressive tax is one in which the effective tax rate (the tax as a percentage of income) falls as income rises.In other words, the rich pay less, and the poor more. A 2011 study of household tax burdens (PDF) by the Tax Research Division of the Minnesota Department of Revenue found that all state taxes had a “Suits Index” or burden measurement of -0.054, which means that they are mildly regressive. (A measure of zero means that they are perfectly proportional, +1 that the richest people pay all the taxes and -1 that the poorest pay all the taxes.) Taxes on gambling, however, had a Suits Index of -0.489. In other words, they were near halfway to being completely unfair.
5. The deal includes some extra giveaways and expenses. For starters, the state is waiving sales taxes on “materials and supplies used or consumed in and equipment incorporated into the construction or improvement of the football stadium and stadium infrastructure.” At the current rate of 6.875 percent, that’s a loss of $67 million to the state treasury.
What’s more, the stadium will be exempt from property taxes. Kiss more millions goodbye. Proposed legislation also authorizes the state to issue as much as $102 million more in bonds to pay deposits of reserve funds, pay for credit enhancement and other miscellania.
Finally, the bill leaves a crucial matter in the hands of the newly created Minnesota Stadium Authority: It, not legislators, will be responsible for making sure that the Vikings will be able to finance their portion of the facility, some $427 million.
This is not a suprise
Those of use following the new stadium proposal with a critical eye have noted all of these things. It is nice, though, to have someone actually begin to tally the hidden costs.
A quibble
Good piece, but one thing I would quibble about is the idea that financing terms over time should be included in a statement of the cost. It can be, of course, but this has to do with the way we are accustomed to looking at things. When you buy a house, do you look at the price you pay, or the cost over time? Either way is valid, but once you choose a way of looking at it, you have to look at everything else that way as well. For example, if you look at the cost of your house as the sum of all the payments on the mortgage you make on it, in planning and budget terms, you also have to match that cost against all the income you expect to make over the period of the mortgage.
The rub
Of course most people don’t look at the overall cost of the mortgage, but I would assert that that kind of thinking is exactly why our economy crashed. While we might not look at the overall cost, at the very least, we should be asking “can we afford the payments and all associated costs?” If you can only barely afford the mortgage payments, how are you going to afford the repairs and the maintenance of the house? Property taxes? Improvements? Over 30 years, the brand new stadium of tomorrow will be 30 years old. It will have needed repairs and improvements along the way, costs that aren’t included in the mortgage payments. And, in the end, the public will be demanded to cough up an even grander fortune for an even grander playground because we did it last time. In 30 years, will we have a facility that we can cash in for a new one? Absolutely not. Even when the economy was good, these kinds of investments never improved in value like a house did, presuming that it was properly maintained.
So, can we afford a new stadium mortgage? Not if we can’t even fully fund our schools, we can’t.
Price or cost over time?
If a person looking at buying a house looks only at the sticker price and not the cost of the mortgage, atxes, insurance and other mandatory expenses, then they are a fool. If you have a perfect crystal ball then you can equate the stream of payments to a net present value. With a less perfcet estiamte of interest and other rates over the life of a loan you can make an estimate, with considerable risk of variance. But to not consider the total cost of the stream of payments is like jumping off the bridge without considering whether the bungee cord is tied on.
The hidden cost in any project is the cost of relocating existing utilities and traffic changes.
Whatever happened to the issue of the major internet link building to the east? Where are its underground lines located? What about the Excel switch facility located across 11th? What about the suspicious overlap of the new facility over 11th street? Does the cost include the cost of obtaining the land for “mixed-use” and “gameday plaza” areas?
And, the big issue of logistics are not mentioned: retrofit of TCF stadium, the added cost of construction related to the preservation of the dome while the new facility is used, the loss of any other dome event due to limited access and event vehicle parking, offsite parking for some dome tenants, creating or maintaining proper exiting of the dome during construction.
Trying to build half of the new facility while using the old, and then trying to build the other half, footing to roof, in year or so, affects the overall budget enormously. The costs of this have not been considered.
No sales or property taxes???
I am speechless.
Financing costs are essential considerations
Stadiums are not private homes, and there are several important distinctions. For one thing, you can control your mortgage costs on home by taking out a 15 year mortgage instead of a 30 year mortgage, or you can simply pay off your mortgage early, not so with public bonds. Secondly, a house gains value over time, it will most likely be worth more than you bought it for by the time you pay off the mortgage ( notwithstanding a once every 200 year nation wide collapses in the housing market). No matter how much you spend on a stadium, it’s worth one dollar the day gates open. You can sell your home and move into a cheaper one, or refinance to a lower interest rate under the right circumstances… no such options with stadium. Anything you do to your home to increase it’s value, or any increase in value, goes to you. Any increase in a stadium value or revenue goes to the sports franchise, not the public.
Beyond all these differences one has to remember that we’re talking about allocating government revenue, not personal income. The financing costs are reflected by the annual payments, which cannot be captured or re-directed towards any other purpose, for any reason, period. Remember, the only program in Hennepin County that didn’t face budget of any kind was the welfare program for the Twins Stadium.
These stadiums are public liabilities, they are not infrastructure. The only way to evaluate that liability is to look at it’s total costs. Whatever public assets these franchises may represent, are not increased by new stadiums. New stadiums only increase the value for the franchise.
The public should have a share of increased franchise value
I’ve said it before in this space: Any deal should include a provision for the public to share in the increased value of the Vikings franchise if the Wilfs sell it.
If we build a new stadium, the Vikings will immediately increase in value — what ever the number will be, it will be big. For the sake of argument, let’s say the Vikings immediately are worth $500 million more when they move into their new stadium.
If the Wilfs turn around and sell the team, then the public should get a share of that increased value. You could make it a sliding scale, so that if they maintain ownership of the team for, say, 20 years, then they’re fully released from the obligation at that point.
But the state needs to use its bargaining power here. If they need state money to build that place, then the state should also share in the increased value of the franchise that its investment brought about.
Capturing the value of team if sold
There is a provision in the operating terms that would provide for a “clawback” of 18% of profit if team is sold, declining 1.2% per year. So, for example, 12% of profit after 5 years. There were exceptions that could probably be used to avoid this payment. Not sure if this made it to the final bill. And not proportional to public investment.
Business school
If you’ve got ten dollars in your right pants pocket, and ten dollars in your left pants pocket, does it really matter which pocket you take the money out of when you buy a hot dog? Especially if you need twenty dollars to buy a bus ticket to get home? I realize that rules are a bit different for government entities. Apparently quite a bit different.
I wrote a letter to the Star-Tribune, which they did not publish, noting that no private sector investor would invest in a business venture without expecting a share of the profits.
I’d grudgingly vote for a stadium if and only if the deal included the state and local governments receiving a share of the stadium profits, including gate receipts and special event rentals, proportionate to their investments. It would sweeten the deal if the owners promised to make a certain percentage of the seats available at movie theater prices on the day of the game.
Revenue side
In my opinion, the real issues are costs and revenues. On the cost side, we can be sure that current estimates will be far below the actual cost of the stadium. Nothing is more predictable in these kinds of things than cost overruns. But even more significantly are the estimates of revenues that are being used to persuade us that the stadium will be adequately financed. These estimates are simply fictions, designed to get us to a stadium decision from which we can’t turn back. Only at that point of no return, or at least at that perceived point of no return, will we actually address in realistic terms, how the stadium is to be paid for. Of course, everyone will be surprised when that happens. We will be told that the revenue plan on which the stadium was sold to us was sound, and that no one could have foreseen that it would. But collapse it will at some decent interval after the ground breaking, and only at that time will the real burden of building and maintaining an NFL style stadium be made clear to us.
I’ve said it before in this space: Any deal should include a provision for the public to share in the increased value of the Vikings franchise if the Wilfs sell it.
Essentially, you are asking for ownership participation. Like everything else having to do with stadium deals, this is negotiable. The question is, how much are you willing to pay for it? How much are you willing to add to the stadium deal in public financing in exchanges for a contingent ownership interest in the team?
Something to bear in mind. NFL franchises in terms of revenue stream have been as sure a bet as anything in the American economy. I, personally, don’t expect that to change. But it’s not as if the horizon is totally absent of clouds. We are just seeing the first glimmerings of the bounty scandal. What happens if that gets worse? If other teams become implicated? If some federal prosecutor starts looking at that in RICO terms? What does that do to the franchise value of NFL teams? Now don’t get me wrong, For a variety of reasons, that’s extremely unlikely. I fully expect the value of NFL teams to grow. But in recent decades, we have seen a lot of cash flow businesses, where nobody thought anything could go wrong, crash and burn. That can happen to even the mighty National Football League. And is that really a risk we want to buy into?
Incomplete ?
Marly’s article is one which deserves reading. However, her 5 points would have been more complete had she mentioned and equated her comments to other public buildings, private companies, ventures, etc., that this State and its taxpayers have ‘invested’ in with legislative blessings over the years…i.e. NW airlines to bring up an example that many might want to forget.
Incomplete
Hey Dennis,
It’s possible Marlys didn’t want to duplicate other articles. I wrote a piece here a couple weeks ago that does exactly what you suggest: http://www.minnpost.com/community-voices/2012/02/vikings-vs-nwa-does-nfl-really-deserve-largest-subsidy-minnesota-history
Not the Mark Dayton I know…
I continue to be astonished at Gov. Dayton’s unequivocal support of this thing. At first I thought he was just doing the required “governor-as-Minnesota-booster” thing, but this is ridiculous. It says a lot about how much money speaks in politics.
Ownership
The NFL isn’t going sell an ownership or share profits with the public. Their business model depends having a small number of owners. These guys are in this for the money, they’re not just building stadiums.
Add that to their tax-exempt status . . . . .
and it looks like they have a pretty sweet little deal going!
http://www.huffingtonpost.com/brian-frederick/nfl-tax-exempt_b_1321635.html
The unions
The governor is very wired into the unions, and this causes him to do things that to the rest of us seem downright weird. The unionization of child care workers is an example of that. I really don’t know why he expects the DFL party to carry water for him on that. But there is always a lot of money in stadiums, and a share of that money goes to politicians. Legislative support for the Vikings Stadium is like an iceberg, with only the top 10% or so actually showing. The vast majority of the legislators want a stadium, they just don’t want to be seen supporting it. So the legislative strategy revolves around crafting a path way for the stadium that doesn’t seem to rely on any vulnerable legislator actually supporting it. The bills themselves are carried by outstate legislators, in this case Lanning and Rosen, who are in the lucky position of pushing a bill that their constituents will benefit from but won’t have to pay for. Other complicated measures will have to be employed so that it will always be very hard to find a clear up and down vote on the stadium. But once they are found, once the deniablity strategies are in place, the stadium will be built.
What’s wrong with this picture?
Rachel Kahler and John Reinan get my support on this one. We owe our own public schools something over $2 billion, and this year’s “surplus” apparently disappears next year, with another $1 billion shortfall in the works. In other words, the state’s fiscal house is a shambles, and not likely to be repaired for many years to come yet government “leaders” are falling over themselves to find a way to subsidize a sports franchise to the tune of well over a billion dollars.
Whatever reputation Minnesota might have had in the past for “good government” should rightfully be in tatters at this point, especially as the stadium backers look for ways to ignore the Minneapolis City Charter, which requires a public referendum on any sports subsidy of more than $10 million. Public dollars used to build a facility for a private enterprise like the Vikings constitute – by any reasonable definition – a subsidy.
This is appalling public policy. I expected team ownership to be without scruples or conscience, but it’s more than a little depressing to see the same sort of values exhibited by politicians of both parties at municipal, county and state levels.
If Mr. Wilf really, really wants a new stadium, let him borrow the money to build one himself. Only then – ONLY then – will he be entitled to keep all the profits from ticket and concessions sales, television revenues, etc. Lacking that 100% private funding, the best-case scenario for a reluctant public would be that profits from the Vikings franchise be shared proportionately (presumably the funds would go to the state’s general fund – and the City of Minneapolis if Minneapolis taxpayers are paying extra for the privilege of having the stadium located in the City) until the stadium is paid for completely. Even the worst-case scenario should be along the lines that John Reinan suggested, which is that any increase in the team’s value if it’s sold to new or different ownership would have to be shared proportionately with the public that helped finance the stadium. I wouldn’t even grant the “sliding scale” that Reinan suggests.
So, we can’t afford to fully fund our public schools, but we can afford to borrow money, to be repaid with interest, in order to build a football stadium for a private owner who’s already a multimillionaire, and who will benefit enormously from the public’s contribution. Where’s that chorus of voices from the right wing yelling “Keep government out of this!” now that there’s an occasion that fits?
The public does get a share
The public collects income taxes on highly paid NFL personnel that they would not otherwise collect if there was no NFL football in Minnesota. NFL payrolls have increased substantially – up to $120M recently – and show no signs of slowing down. We’re essentially taking TV advertising dollars and monetizing them into MN tax revenue streams. Without a stadium we don’t get that money. Whether access to that revenue stream is worth the expense is another question.
I think we missed a few other unspoken assumptions that make most of these comments moot.
1. A stadium will be built with primarily public money and nothing will stand in the way. Laws for referendum will be ignored, cost is no object. Costs will be minimized and not discussed truthfully as needed.
2. At no time will the NFL or the Vikings reveal their financial contribution or gain from the stadium.
3. The Vikings will try to capture every revenue stream they can and their primary negotiating tactic will be “my way or the highway to LA”.
4. This stadium was a done deal the day Red McCombs first brought it up; it was inevitable no matter what the majority of the population wants.
5. The money will come from some other public need, schools or highways or healthcare for the poor or whatever, and politicians of both parties will create the smokescreens they need to hide their involvement in the transfer of funds from other public needs. If this new gambling stream was a good idea they would have created it to fund education last year during the shutdown when they “borrowed” from the schools.
Viking Stadium
“So, can we afford a new stadium mortgage? Not if we can’t even fully fund our schools, we can’t.”
‘Nuff said. Will the state ever clean this up and take the pressure off the counties and thus our property taxes?
Am I the first one to say
that it would seem incredibly, irresponsibly stupid of the state to go ahead with this deal, even if Mayor Rybak can get around the very clear ban by Minneapolis’ citizens on any such expenditure over $10,000 without a referendum?
We have real problem to address. A gift to Zygi Wilf that will deprive the state/county/city of property taxes and pretty much any other income from the stadium should not be allowed to distract us from being sure that:
-the “reform” crowd doesn’t destroy the public school system and harm teachers;
-that workers are not doomed to make less, potentially work in unsafe conditions and suffer firing without cause if the Right to Work amendment passes;
-tens of thousands of Minnesotans will be disenfranchised if the Voter ID amendment passes (5 million in the country per research by the Brennan Institute for Justice).
And more.
and secondly
Our so-called progressive governor doesn’t have time to fight the Republicans on all these amendments because he needs their help to transfer a billion dollars to the NFL and some of his rich friends. Of course it is only for our own good; we’re just too dumb and poor to know what’s good for us, hence no referendum. Day care workers can vote but the citizens of Minneapolis can’t. GO VIKES!
Indeed!
I, too, am surprised at how much the Governor is putting into this. Maybe after eight years of Pawlenty were just used to a governor who neither leads the fight for a new stadium nor says he’s opposed to one.
Call me naive, bit I think Dayton really thinks this is best for the state. He sure isn’t worried about campaign contributions.
This isn’t going to happen with GOP assistance.
This scam will be another rip-off brought to you by your friendly DFL legislator…just like the Twins stadium.
I’m ready to blame whoever supports this nonsense…
…and whoever they are, they should know there are many of us who will do what we can to remove them from public office so they can find work more suited to their skills, abilities, and values.
It doesn’t matter what flag they are waving in this case. You might see a few Republicans cross over on this one, too.
stadium
Wasn’t that a photograph of Julie Rosen, republican pusher of the stadium?
Pathetic
Either allow the Vikings to flee the tundra expeditiously or finagle a community-owned structure a la our dreaded cheesy neighbors. At least they put their money where their mouths are for the right reasons – wanton escapism, camaraderie, and shenanigans.
If we’re going to pay for it, we might as well own it – all of it. Easier said than done. Even though I’ve steadfastly suffered through nearly four decades of a purple-pride-visionquest, I couldn’t care less about the prospect of them leaving because we’re not willing to directly fund their private enterprise. You can draw parallels to other businesses such as NWA but those are not apples to apples comparisons.
This is simply the Vikings doing what vikings do – plunder, maraud, pillage – only they’re doing it to their own fans and revenue base. Symptomatic of yet another town succumbing to the pro sports equivalent of Stockholm Syndrome.
The public deserves upside to such a financial commitment – maybe similar to the preferred stock issued in the most recent bank bailouts. It is reckless to use the state’s credit to underwrite the unlimited (and unknown) profit of a private enterprise for a shabby, fixed rate of return (tax adjusted or not).
There should be some upside for the state directly linked to the team’s financial success – profit sharing, stock warrants, options, direct ownership, etc. It is simply insulting for anyone to suggest or infer that it is some sort of honor to fund this project in order to retain this franchise.
Wilf – you need to acknowledge you and your partners have made a crummy investment and either liquidate, relocate, or commit more of your company’s capital. Regardless of the outcome, I will still proudly don my #47 Joey Browner jersey every Sunday!
Mutual benefit
“If Mr. Wilf really, really wants a new stadium, let him borrow the money to build one himself.”
It’s the position of Mr. Wilf that a Vikings stadium benefits both him, and the community. It therefore makes sense that both he and the community should pay for it. This is a disputable point, in general, but not with respect to Mr. Wilf. If we as a community take the position that all of the benefit of the stadium goes to Wilf and the Viking, and that they should absorb the entire cost of the project, that is tantamount to a decision to let them leave, and borders on kicking them out the door.
Internal Vikings finances are irrelevant to this matter, and so is the manner in which the Wilfs put together the financing of their portion of any deal. It doesn’t matter to us, if the NFL foots a portion of the bill. As long as the way the Vikings don’t finance their contribution in a way that jeopardizes their financial stability which would impair the de facto partnership we would enter into with the team by building them a stadium, such financing is none of our business.
In response to the point raised here…
The bill does call for a level of profit sharing when the Wilfs sell the team. Sec. 16, subd 8 of the bill calls for the state to earn up to 18% of the profit, declining 1.2% a year over 15 years, after which the Wilfs would not be required to share profits from sale of the team with the state.
Wilf is no special case
I would point out to Mr. Wilf that every business benefits owner and the community, and most provide far more benefit than an NFL team. For instance, I known a husband and wife who have created around 600 year round full and part time jobs with their 12 McDonalds franchises. That’s almost 600 times the the handful of year round jobs the Vikings support. You’re average Costco or Target employs around 200 people, and they generate around $130 million worth of local sales every year compared with the Viking $50 million in ticket sales. I could go on but you get the point. One can make a pretty good argument that losing a single McDonalds and it’s 50 year round employees would have a greater impact on the community than losing 8 Vikings games a year. There’s no Target, Coscto, or McDonalds anywhere that’s gotten a billion dollar subsidy, nor have they asked for one.
This subsidy outrageously disproportionate in every respect. This would be the largest public subsidy of a private business in the history of MN, and it would be going to a franchise that employs a handful of people year round.
Please remind me again why public financing of this is a good idea and how will I benefit from it.
“I would point out to Mr. Wilf that every business benefits owner and the community, and most provide far more benefit than an NFL team.”
And Mr. Wilf would say, that’s fine and then move the team. This is simply an argument that the Vikings will not engage in. The questions can really be put quite plainly. Do we want NFL in Minnesota or not? And if we do, how much are we willing to pay for it? It’s amazing to me how much of what the politicians say, is intended to divert us from those two simple questions.
I would point out…
“Do we want NFL in Minnesota or not? And if we do, how much are we willing to pay for it? ”
Let’s stop pretending we don’t know the answer to that question, the answer just isn’t what Vikings fans want to hear. The truth is that these stadium deals prove that this question is actually irrelevant. These deals are the product of a hijacked and corrupted system that ignores the public answer to that question, that’s why no stadium deal putting more than $10 million will pass by referendum. The corrupt nature of these stadium deals has long since been recognized, that’s why the referendums exist, they’re a public reaction previously hijacked political processes. The constant drive to circumvent the referendums is explicit acknowledgement that any rational attempt to make public policy regarding sports franchises is to be avoided at all costs.
Sloppy math
I don’t really have a position for or against the stadium, but I do have a position about using factual arguments.
The writer’s assertion that the sales tax exemption (point #5) is a “$67 million loss to the state treasury” is absurd on its face. The exemption only applies to materials, not to labor. While the number varies from project to project, a general rule of thumb is that construction costs are 50% material, 50% labor. So, using the $975 million projected cost, the sales tax exemption is likely to “cost” the state only about $33 million.
At the same time, the nearly $500 million in wages paid to build the stadium will generate – using the middle 7.05% tax rate – about $35 million in taxes for the state treasury. So in fact, there is no real loss to the state from the sales tax exemption from the project.
Again, I’m pretty agnostic about the stadium, but I think we can all agree that we should at least use honest numbers in the discussion.
Slopppy logic
Tim,
The loss of $33 million in sales taxes is real, and not offset by the income taxes which would be collected in any event. Were it not for the exemption the state would be collecting $68 million instead of $35 million. And that assuming your calculations are more reliable than the author’s.
Income taxes
They won’t collect income taxes if the Vikings move. I don’t see that as a likely near-term scenario but they won’t stay in Metrodome forever.
Income taxes
It doesn’t make sense to spend $40 million a year in to collect $16 million a year. We’d be better off losing the Vikings at that rate.
Really?
You think that if we DON’T build the stadium, the income taxes “would be collected in any event”? How is the state going to collect income taxes on nearly $500 million of labor involved in the stadium project if there is no stadium project?
It’s very safe to assume that my calculations are more reliable than the author’s, since the author thought a $975 million project would generate nearly $68 billion in sales tax revenue, which is demonstrably false.
Yes Really
Tim,
We were talking about what happens if we build the stadium with tax exemptions, not what happens if we don’t build the stadium at all. No one said anything about $68 billion, the figure was $68 million. You can’t assume that all of the construction workers would be jobless for the next three years in the absence of a stadium project, they may well just end up building something else. In fact, if we were to devote that spending to infrastructure projects instead of a stadium we would create ten times the stimulus, and more jobs.
stadium
Read City Pages article on the stadium and this deal. It is enlightening.
Pay our debt to the schools, first!
much more than a stadium
The “new” stadium is going to be 70% bigger than the Dome. This includes a Viking Hall of Fame, Restaurants, and other venues for the public to take in. Trouble is the public is paying the cost of these business inside the “new” stadium. The NFL and Vikings stand the most to gain and should foot the bill. It’s pretty unheard of the taxpayer paying to open private restaurants and other venues, much like the ones that will be inside the Viking stadium.