Monday, May 03, 2010

The (Proposed) House That Adrian Peterson, Tourists and The Working Poor Would Build

We are getting our first look at the proposed new Vikings stadium funding plan today, and it is sure to generate some heat from all sides, and probably fail.

The revenue being generated by the state, which under this proposal is paying for two-thirds of the stadium costs (I know that is getting to be very typical, but it still rankles, for reasons that are obvious, but that I'll still hammer on a little later) is a collection of taxes meant to target those most likely to want a new stadium, but misses the mark by a good deal.

Here's Brian Bakst of the Associated Press (dear old media--how do we know you are dying?  The Stadium story on the Minneapolis Star Tribune's website is an AP article.  Ridiculous):  "The biggest part of the public money would come from a nearly 7 percent tax on jerseys, which would bring in an estimated $17 million a year. The 1.5 percent hotel surtax in the seven-county metro area would bring an estimated $8 million, and the sports-themed scratch-off game and rental car tax would each bring in an estimated $5.5 million."  So that's an estimated $36 million a year--which means it would take the state roughly 15 years or so to pay for their 2/3rd's of the stadium.

I think the jersey plan is the most intriguing idea in the mix.  Why not make some more money on the back of the players who already labor so hard for you?  I'm sure that will be a fun point in the already contentious Collective Bargaining Agreement negotiating sessions that are happening now.  I'm sure the NFLPA would argue, quite rightly, that this is an end-run around the rights of the players to collect something on the use of their image/likeness/etc.  

The state, by taxing those jerseys, is also kind of in a position to hope that the big time free agents are continued to be lured to Minnesota.  Just think how much money could have been generated for the state last year when Favremania was at its peak?  But how much money will Sage Rosenfels generate next year, after Favre announces his retirement?  It makes one shudder to think.

Hotel surtaxes will be popular with everyone except hotel owners and tourists (who probably won't be aware of it anyway)--same thing goes with the car rentals.  Of course, it is a little disingenuous to suggest that those taxes target stadium-goers.  It seems to be that it targets oblivious out-of-towners.  Why not be honest about it?  "Let's make some scratch off of these rubes over here, see?"  You could even say it in an old-timey grifter voice for full effect.

The scratch-off game idea, though?  That stinks to the most.  Generally, I don't like the idea of government being involved in fundraising through gambling, but at least most of those tickets raise money for things like environmental management and the like.  The idea of funding what should be at heart a private endeavor with a game that is disproportionately played by lower-income folks smells like a really, really retrograde tax.  And has absolutely nothing to do with their suggestion that all of these taxes are paid by the people most likely to benefit from a new stadium.  Horsepuckey, sirs.

As the day moves along, and we start seeing reaction to this plan it seems unlikely to get far anyway.  Governor Pawlenty is sticking to his "no new taxes to pay for anything, including stadiums" mantra.  It also got a pretty lukewarm reaction from the Vikings, who essentially called it a conversation starter.  Why wouldn't they be happy with a plan that pays for roughly $525 million dollars of a new stadium?  I can think of a few reasons right off the bat--fore example, they may not be thrilled with the fixed closed roof, when all the other kids are getting super-cool sliding roof stadiums.  

But I'll bet they really don't like the idea of signing a 40-year lease.  What if they get a new stadium, but still want to move after 10 years or so?  Tough luck, and being an owner means always getting your way, and probably signals the Viking leadership isn't looking for that kind of commitment. "We like you Minnesota, but 40 years?  Ennhh." 

And who knows, maybe the Vikings won't like the idea of having to spend $264 million of their own money.  Annual revenues for the Vikes are estimated (low end) at a paltry $200 million/year.  Even though the Vikings are considered the 31st most valuable franchise out of 32, it should be noted that Zygi Wilf purchased the Vikings for $600 million way, way back in 2005.  In 2007, the value was $782 million.  In 2009, prior to the playoff run, the Vikings were valued at $835 million.  That's a pretty good investment, right?  At that rate, the Wilfs will have easily doubled their money in under 10 years.  And yet, they absolutely need over $500 million in public money to build this stadium?  Horsepuckey.  

Bakst quotes the sponsor of the bill, Tom Bakk, a state senate DFL-er as saying, "There are a lot of things to like in this bill and there are things that are going to give people heartburn."  I'm guessing right now that the heartburn is far outweighing the liking.  Don't expect this to get too far, but do expect the model to continue in this way for the next year or so, as panicky folks get more panicked about the Vikings leaving after their lease runs out on the Metrodome.  Quick, everyone!  Give them everything they want so we can hurry up and make plans to cave in again in 20 years.  Exciting fun times ahead for the fans of the Minnesota Vikings--that's about the only certain thing in this whole mess.


Andrew Wice said...

Using public money to build a stadium is a popular snow job. If taxpayers build the stadium, shouldn't they share in the revenue? They don't.

This is the sort of wealth redistribution that the right wing craves.

Billions in tax dollars, but it will still cost fans $200 each to see a game.

Muumuuman said...

There's always the $1000 leaving town tax, that could really bring in money.