Submitted to the Star Tribune.

The Problem with Vikings Stadium Funding

In a letter to the Vikings earlier this week concerning terms in the stadium agreement he negotiated, signed and touted, Governor Dayton took exception to Personal Seat License revenue (PSL’s) the Vikings are counting on to help fund their portion of the stadium costs.   

As a sitting lawmaker, I worry that this bit of political theatre, may now be water under the bridge and, either intentionally or not, takes us farther away from recognizing a increasingly significant problem concerning stadium funding -- how the taxpayer's portion of the stadium will be paid for.

The taxpayer portion of stadium financing relies on taxes generated from charitable gaming revenue, specifically new “electronic pull-tabs.”. This revenue has to exceed $1.8 billion per year so that the resulting taxes can pay for the public's share of the costs.  Simple math tells us that monthly sales of electronic pull tabs need to reach $150 million.  If the first month of operation is any indication, this may be a losing bet for taxpayers. Electronic pull tab revenue reached just slightly more than $1 million in its first month of operation.  While there is no question this revenue will increase, the public needs to understand the increase has to be substantial to reach $150 million in sales each and every month.

If this doesn’t happen, then backup funding sources, like Viking scratch off lottery games and additional suite revenue taxes, kick in.  These back-up funding sources, however, were never substantial in amount so when they don’t fill the hole, the state’s general fund will inevitably be tapped.  Therein lies the problem. The Vikings stadium will then compete with schools, roads, bridges and health care for the poor/disabled for funds, or will result in tax increases to make up for the deficit.

So while the Governor professes concern about how the Vikings will be paying for their portion of the stadium using a clause in the contract that was specifically given to them by Governor Dayton, many lawmakers, including myself, will be getting headaches over how the State of Minnesota will find the money to pay for the taxpayer portion when taxes from gambling revenue don't come in as projected.

State Representative Bob Barrett