Tag Archives: 34B

House passes final Vikings stadium bill; Leidiger votes no, Hoppe votes yes

The Minnesota House approved the conference committee version of the bill to build a new Minnesota Vikings stadium on a 71-60 vote last night.  Carver County’s House delegation split on the vote, with Rep. Joe Hoppe voting yes and Rep. Ernie Ledigier voting no, just as they did on the original version of the bill Monday night.

Here are the key provisions of the final bill:

  • Here is the final breakdown of the financing:  the team’s contribution will be $477 million ($50 million higher than what they originally committed to), the state’s contribution will be $348 million, and the City of Minneapolis will contribute $150 million.
  • The state’s portion of the financing will be handled by allowing electronic pulltabs and bingo.  If those sources do not produce adequate revenue to cover the state’s portion of the expense, the following provisions will “blink on” (in order) to cover the funding gap:  a sports-themed lottery game, and a 10% tax on suites in the new stadium.
  • The length of the team’s lease will be 30 years.
  • Cost overruns on construction of the stadium will be the responsibility of the builder.  (That should make for some interesting negotiations upfront with the company selected as the general contractor for the facility!)
  • Naming rights revenue will count towards the team’s contribution
  • The team receives a five-year exclusive arrangement to bring a Major League Soccer franchise into the facility
  • Provisions instituting an internet sales tax and financing for the Mall of America expansion were removed from the bill

The Minnesota Senate will take up the bill later today.  You can watch the action here.  State Senator Julianne Ortman has indicated she will vote no on the current proposal because she does not favor using gambling as the means to fund the facility.  If the Senate passes the bill, it will go to Governor Mark Dayton for his signature.

[UPDATE]:  Correction made to the MLS provision.  The bill does contain a provision that would charge rent to the prospective MLS team.

Advertisements

Senate passes stadium bill; Ortman votes no

The Minnesota Senate approved a proposal to build a new stadium for the Minnesota Vikings last night by a vote of 38-28.  Carver County’s State Senator, Julianne Ortman, voted no on the proposal.  22 of the 38 yes votes came from the DFL minority, while only 16 of the 37 GOP Senators voted in favor of the bill.

As with the House bill, dozens of amendments were debated.  Key differences between the House bill and Senate bill include:

  • The team contribution:  the House bill calls for a team contribution of $532 million, the Senate bill calls for a $452 million contribution.  Both of these amounts are higher than the $427 million the team has pledged, and the team has not indicated publicly a willingness to go beyond that amount.
  • Financing the state contribution:  The Senate bill includes some user fees in addition to electronic pulltabs used in the House bill.  These user fees are a 10% fee on sale or rental of suites in the new stadium, a 10% fee on parking within one-half mile of the stadium, and a 6.875% fee on the sale of officially licensed merchandise at the stadium.
  • Other provisions include a tax break for expansion of the Mall of America and $2.7 million in annual payments to the City of St. Paul to utilize on sports facilities (either retiring of debt on the Xcel Energy Center or construction of a new St. Paul Saints stadium are the most likely uses)

The bill now moves to a conference committee to hash out the difference between the two bills.  Chaska State Rep. Joe Hoppe is one of the members of the conference committee.  Once a final bill is agreed to by the conference committee, it goes back to the floor of each body, where they will take an up-or-down vote with no amendments allowed.

House approves Vikings stadium bill; Hoppe votes yes, Leidiger votes no

The Minnesota House approved a proposal to build a new Minnesota Vikings stadium on a 73-58 vote last night.  Carver County’s House delgation split on the vote, with Rep. Joe Hoppe voting yes and Rep. Ernie Ledigier voting no.

40 of the 73 yes votes came from the DFL minority, while only 33 of the 72 Republicans in the House voted yes.

Dozens of amendments to the bill were debated yesterday, most of which were defeated, but there were some substantial changes to the bill that did get through.  These include:

  • Reducing the state contribution by $105 million and adding that to the team’s contribution, including a provision that would share naming rights proceeds.  This is a potential sticking point in the bill, as the Vikings have not agree to pay more (at this point) than the $427 million contribution agreed to in the original bill
  • Putting the Vikings on the hook for cost overruns during construction of the stadium; this is similar language to the Target Field bill, but it does imply giving the Vikings control over the construction process
  • Increasing the lease from 30 years to 40 years
  • Increasing the amount of revenue that has to be shared if the Wilfs sell the Vikings after the stadium is built

The bill moves to the State Senate today, which is in session beginning at 9 a.m.  State Senator Julianne Ortman of Chanhassen has indicated she will be voting no on the current proposal.

Hoppe, Leidiger, Ortman vote against bonding bill [UPDATED]

The Minnesota House has passed a $496 million bonding bill by a 99-32 vote this afternoon.  The bill will fund a number of key infrastructure projects and will create a number of jobs.  You can see the details of the bill here.

The fact of the matter is that this an excellent time to aggressively use our bonding capacity to upgrade our infrastructure.  Why?  Let’s quickly summarize the reasons:

  • Interest rates remain at or near historic lows.  In fact, even with Governor Dayton’s proposed $775 bonding package, our average interest expense over the life of the bonds would actually decline over the current payments.
  • Minnesota’s construction industry still has lots of excess capacity, despite the economic recovery finally just starting to take hold.  State and local governments have been consistently receiving bids lower than estimated for what projects have been completed in recent years.  We can get good bang for the buck in the current environment.
  • While  bonding is additional debt, it’s the very best kind of debt.  Bonding goes to projects, like new buildings and renovations at our colleges and universities, flood prevention and mitigation, roads and bridges, pollution control, and public safety.  These projects are the foundation for future prosperity, and will give benefits to the state for years and decades to come.

Carver County’s House delegation of Rep. Joe Hoppe and Ernie Leidiger voted no on the proposal.

The Minnesota House’s voting tracker for the bonding bill. (Screen capture via The Uptake)

This is a disappointing vote.  The bonding bill is shaping up to be one of the few highlights of this year’s session, and our representatives are on the wrong side of the issue.  Hoppe and Leidiger are going to have very little to show for themselves when voters ask about what they have accomplished since the 2010 election.

[UPDATE]:  The State Senate took up the bill this afternoon, passing it on a 45-22 vote.  State Senator Julianne Ortman of Chanhassen also voted against the bill.

[UPDATE #2]:  Reps. Hoppe and Leidiger voted against the final conference committee version of the bonding bill on Tuesday afternoon.  The bill passed 97-33.

Hoppe, Leidiger vote against Sunday liquor sales

Once again, the common-sense quest to allow liquor sales on Sunday in the state of Minnesota has fallen prey to legislative indifference and the power of special interest lobbies.

On a 97-25 vote, an amendment to the omnibus liquor bill allowing such sales was defeated this afternoon.  Carver County Representatives Joe Hoppe and Ernie Leidiger voted against the amendment, as shown in this picture of the voting record provided by Rep. John Kriesel.

Liquor is a legal product.  You can go to a bar and order your favorite beverage on a Sunday.  It makes no sense at all not to allow people to be able to go to a liquor store and buy it for their personal consumption.

Maybe someday, Minnesota will catch up to its neighbors and allow Sunday liquor sales.  And — dare to dream — maybe someday we will allow liquor sales in grocery stores and other retail establishments as well!

[DISCLOSURE:  I work for a company that owns and operates grocery stores, and advocates for such a change in the law.]

Opponents of liquor sales on Sundays argue that allowing sales on Sundays would add little new revenue — it would just re-arrange existing sales across seven days instead of six — and add expenses of being open on that seventh day.

That may very well be true.  But you could say that of every kind of business.  (Except for auto dealerships, that is, who also have the same protection in the law that liquor stores have.)  Consumers should have the ability to buy the products on the day they like, and businesses can make the decision on when they want to be open to respond to that business.    Liquor stores could choose not to be open on Sunday.  It has been done in other industries that operate (sometimes) on a 24/7 schedule.

Shaky foundation for new Vikings stadium?

Friday afternoon, the text of the bill detailing the proposal for the new Minnesota Vikings stadium was released.  The bill fits the outlines of the deal announced by Governor Mark Dayton, Minneapolis Mayor R.T. Rybak and Vikings owner Zygi Wilf on March 1.

Construction costs of the new facility, which would be built just to the east of the Metrodome, total $975 million dollars.  The Vikings and other private sources would put up $427 million, the state would contribute $398 million, and the city of Minneapolis would chip in the remaining $150 million.

Minneapolis’s contribution would be paid for by redirecting the revenue from existing taxes in place to support the Minneapolis Convention Center (a 0.5% sales tax, downtown restaurant and liquor taxes, and a lodging tax).  The Vikings share would include stadium naming rights as well as expected assistance from the National Football League.

The state’s portion is where things get tricky.  Gov. Dayton has promised “no general fund dollars” will go to the stadium (more on this below).  The entire $398 million is projected to be paid for by appropriation bonds backed by revenues from electronic charitable gaming, primarily electronic pulltabs and bingo.  In order to support the $398 million principle and interest over the next 30 years, the state would need to make annual payments of about $40 million.

Last year, charitable gaming (which is 90% paper pulltabs, with the rest split among bingo, paddlewheels, tipboards and raffles) generated about $38 million in revenue for the state.  The state Revenue Department projects that the electronic gaming will generate about $62 million per year, leaving a $22 million cushion.  No problems, right?

Maybe not.  Critics have pointed out several potential problems that may need to be addressed.

Problem #1:  No state currently uses electronic pulltabs to the extent being proposed here in Minnesota, so there’s no history anywhere to pull from.  Idaho and Florida have limited use of such games, which limits the ability to extrapolate from their results.  Virginia is planning to rollout electronic pulltabs and bingo later this year, but that too will be on a more limited basis than what is proposed here.

Problem #2:  Existing forms of charitable gambling are in the midst of a serious decade-long drop in revenues.  In fact, gross revenues have dropped 31% over that time and tax revenue to the state has dropped 34%.

Source: Minnesota Gaming Control Board

Problem #3:  charitable gaming advocates say Revenue Department projections are widely out of line.  Because of the issue in Problem #1, some feel that the assumptions used by the Revenue Department are not accurate.  For instance, here’s an example cited by King Wilson, Executive Director of Allied Charities of Minnesota, in MinnPost:

Take Apple Valley American Legion Post 1776. It has only one site, its clubhouse, and previous legislative proposals have limited each site to a maximum of 12 pull-tab and bingo machines.  Revenue from pull-tabs has been estimated to produce $225 a day, bingo $90.

“If you multiply each of those by 12 machines and 365 days a year, you get $1.4 million,” says Wilson. The Department of Revenue, however, says that Apple Valley’s revenues will rise by nearly $6 million.

Not to mention that the estimates rely on increased availability of the electronic games.  Currently available in about 2,700 locations across the state, revenue estimates indicate that the electronic games may be available in up to 4,000 locations.  But some say that may not be the case because of the increased up-front cost of the machines.

Charities currently pay about 1.2 cents per paper pulltab in expenses, but they would be on the hook for leasing costs of $100-125 per month per machine with the electronic systems (the equivalent of about 10,000 paper pulltabs).  Increased costs for charities may translate into lower payouts for gamblers.  Lower payouts for gamblers translates into fewer gamblers, which lowers revenues — starting a vicious cycle that makes gaming unprofitable for the charity and reduces tax revenues available to the state to pay for the new stadium.

So where does all of this leave us?

The whole process has been distasteful, to say the least.  And, owners of professional sports franchises are not the most sympathetic group of characters in the world.  Certainly, one can fairly argue that as a state, we shouldn’t even be in the business of building stadiums and we should thank the Vikings for the memories and let them move along to their next destination.

Personally, I don’t fall into that camp.  I believe that professional sports are part of the fabric of life in a metropolitan area like the Twin Cities and that these facilities are part of the infrastructure of an area with over 3 million people.  It’s important to structure the deal in a way that protects the public investment and doesn’t unduly subsidize wealthy team owners.  We’ve done this before with Xcel Energy Center and Target Field.  We can do it again here.

Let’s take a step back for a moment to Gov. Dayton’s claim that the stadium isn’t paid for by general fund dollars.  Well, that’s just not true.  Today, all charitable gaming revenue flows into the state’s general fund, and nothing changes under this bill.  The appropriation bonds issued by the state are different than general obligation bonds, in that appropriation bonds are not mandated to be paid out of the general fund should gaming revenue not be sufficient.  The state can elect whether or not to appropriate money to pay the bondholders every year.  However, the consequences of default for the state (even on an appropriation bond) are so severe that it effectively means that the state’s portion of the stadium is being backed by general fund dollars.

Well, if that’s the case then I think the Legislature has some work to do here to firm up the revenue source that backs the state’s investment in such a facility.  At the very least, the bill should contain a fallback measure that is triggered if gaming revenue falls short of the level required to cover the state’s contribution — my thought would be a ticket tax levied on events in the new stadium until the shortfall is recovered.  Perhaps even better would be a broader expansion of gambling to racinos at Canterbury Park and Running Aces or a Block E casino.

This state can’t afford to have critical investments in education, health care, public safety and transportation jeopardized by uncertainty about electronic pulltab revenues.  The Legislature needs to provide additional certainty around how the state portion of the stadium’s construction tab will be paid before voting to approve it.

Let’s hope that our legislative delegation steps up to the plate and makes constructive changes to the bill.  Rep. Joe Hoppe is the chair of the Commerce Committee in the House, which will almost certainly hold hearings on the bill.  Hoppe has also spent time as part of the legislative working group on this issue, so he should be well-positioned to steer this bill in the right direction.

GOP Legislature is not popular; Dayton at 50% approval

KSTP-TV and SurveyUSA released results of their latest survey tracking approval of Governor Mark Dayton and the GOP-controlled State Legislature last night.

Dayton fares significantly better than his legislative counterparts.  Dayton’s overall approval rating is at 50% (73% among DFLers, 42% among Independents, and 26% from Republicans).

The GOP-controlled State Legislature is at 17% for an overall approval rating (30% from Republicans, 16% from Democrats, and 11% from Independents).   Of particular concern to Republicans should be that last number — the legislature is faring worse among Independents than Democrats, which may mean that Republicans are in for a tough fight to retain their legislative majorities.

SD 34 Legislators to hold town halls this Saturday

This Saturday, the Carver County state legislative delegation (Sen. Julianne Ortman, Rep. Joe Hoppe, and Rep. Ernie Leidiger) will be holding town hall meetings across the district.  This is a rare open-to-the-public chance to meet, greet, and question your state legislator.  Here are the times and locations, courtesy of the Carver County Republicans website.

CHANHASSEN – 9:00AM-9:45AM

Chanhassen Rec Center
Room 2
2310 Coulter Boulevard
Chanhassen, MN 55317

CHASKA – 10:15AM-11:00AM

Chaska Community Center
Dry Craft Room
1661 Park Ridge Dr
Chaska, MN 55318

NORWOOD YOUNG AMERICA – 12:15PM-1:00PM

Pizza Ranch
Back Room (Party Room)
425 Merger St
Norwood Young America, MN 55368

WACONIA – 1:30PM-2:15:PM

American Legion Waconia Post 150
Upstairs Room
233 S Olive St
Waconia, MN 55387

MNGOP rolls out Reform 2.0 agenda with some good ideas

Today, Minnesota Republican legislative leaders rolled out their “Reform 2.0” agenda.  While I wouldn’t go as far as House Majority Leader Matt Dean who claims “These are noncontroversial, common sense reforms that will move Minnesota in the right direction for a growing economy supported by an efficient and effective government,” there are some good things in this agenda.

Here’s the entire document:

Some of the good ideas include:

  • Enhance Angel Investment Tax Credit
  • Create an ombudsman as a primary contact in state government for new and expanding businesses
  • Combine health care purchasing under single agency to reduce duplication and costs by increasing efficiency and buying power
  • Allow elderly Minnesotans to convert life insurance death benefit into long-term care insurance benefit
  • Require city and county governments to present budget and spending information in any easy-to-understand format designed to educate taxpayers and engage citizens in local government spending decisions
  • Consolidate back office functions; streamline and reduce fleet management and evaluate real estate leases
  • Work with local governments to provide requested mandate relief by ending prescriptive, redundant and outdated mandates
  • Fix problems encountered during the government shutdown:
    • Grant licensing and inspection authority to independent contractors or local governments
    • Allowing Canterbury Park, Minnesota Racing Commission, Minnesota State Lottery, and Minnesota Zoo and others to operate during a government shutdown
    • Let people buy beer

There are also some bad ideas in the package, and many proposals where the devil will be in the details.  We’ll focus on those at a later date.

(Reform 2.0 logo via MN House Republican Caucus)

Joe Hoppe on the Vikings Stadium

Rep. Joe Hoppe appeared on KFAN Friday afternoon to discuss the Vikings stadium.  Hoppe expressed willingness to support a racino or electronic pulltabs as a funding mechanism for the stadium.  He also expresses a preference for the Arden Hills location versus a Minneapolis location.  You can hear more at the link below.

KFAN — Joe Hoppe (interview starts at 22 minute mark)

%d bloggers like this: