It's been widely reported that part of the funding mechanism for the state's portion of the $400 million plus bill for the new Vikings stadium is falling short of projected revenue forecasts.
Quick refresher: Of the $975 million cost of the new stadium, the state is paying $498 million, split between the city of Minneapolis and the state of Minnesota. Minneapolis is raising their share of the money ($150 extra large) by re-directing convention center taxes, and the state is funding their share ($348 extra large) by issuing appropriations bonds, to be paid back over 30 years.
The money to pay back those bonds is to be generated by electronic pulltab (e-pulltabs) games, placed in bars throughout the state, and those e-pulltab games would do three things:
1) Destroy an entire generation of Minnesotans and their families by getting parents addicted to gambling, which would lead to...
2) The wanton and abject neglect of the children, who no one seemingly thought of at all in this process, but it would...
3) Raise $35 million dollars a year for the state, which the state would in turn use to pay off the appropriation bonds with.
In year one, none of those things have come to pass. But the only one people seem to be reporting on is the last one, the state revenue projections. Because they seem to be a little off. And by 'little', I mean 'a metric assload'. As in, the state pulled in only $1.7 million of $35 million projected.
That's $33.3 million dollars off, if you're keeping score at home. Or $4 million more than what Yankees 3B Alex Rodriguez will make this year.
I've gotten a few emails over the last several days asking me what happens next. Some of you are even concerned that this could cause the Vikings or the state to pull out of the deal, and the Vikings could really move.
That isn't happening. Put your fears to rest.
"But Ted", you're asking yourself, "a revenue shortfall that large means the state will have to do something, right?"
Yes, astute and observant reader, it does. But the bill (which became law once it was signed by Governor Dayton), has a plan.
THAT'S WONDERFUL NEWS! WHAT IS THIS GRAND AND GLORIOUS BI-PARTISAN PLAN?
Well, let's go straight to the bill. Article 6 specifically discusses the backup funding mechanism in case revenue projections fall short. It says:
a) If the commissioner of management and budget determines that the amount of revenues under (blah blah blah--the sections that talk about the e-pulltab gaming...trust me, you don't want me to post all that legalese) for that fiscal year, the commissioner may implement the revenue options authorized in this article; provided that this section does not constitute a pledge of tax revenues as security for the payment of principal and interest on appropriation bonds issued under section 16A.695. If the commissioner determines to exercise the authority under this section for a fiscal year, the commissioner must implement the revenue options, as necessary, in the following order:
(1) a sports-themed lottery game under section 349A.20; and
(2) a tax on suites as provided under section 473J.14.
(b) Revenue raised under the authority granted by this section must be deposited in the general fund.
Well, what in Odin's name does that mean? That means that the commissioner of management and budget (currently one Mr. Jim Schowalter) feels that the e-pulltab revenues are way short they can institute a sports themed lottery game and a tax on suites, which I only assume are suites in the new stadium. And they can't use any kind of tax increase as possible collateral if the secondary revenue stream if it doesn't meet projections.
Now, I'm not sure what he has to do to invoke such power, because I can't discern anywhere in the bill where some revenue shortfall trigger automatically kicks in. So if I'm reading the bill correctly, he can just say 'Hey, do it' at his discretion.
Which so far, to my knowledge, he hasn't done.
So yes, the state's current revenue projections for funding their portion of the stadium bill is way off.
And no, it doesn't mean the stadium will not be built, nor does it mean the Vikings will move.
It just means that the state needs to put a lot more e-pulltabs in bars and start destroying families and children at a much faster rate than they currently are doing, or come up with a sports lottery and tax on the suites in the new stadium.