The Free Press, Mankato, MN

March 6, 2013

Our View: Stadium finance needs a Plan B


The Free Press

— As many had predicted, the gambling revenue tied to paying off the state’s $348 million share of the new Minnesota Vikings stadium is not meeting its projections, which means the state needs to work on Plan B. But, instead, officials are taking a wait-and-see attitude.

Last week state budget officials revealed that of the 900 electronic pull-tab sites projected to be operating by now, only 130 were up, which means the forecast of $39 million in reserve by 2015 is actually going to be zilch by then.

Gov. Mark Dayton tried to put on the optimistic face, saying “It’s not an insurmountable problem … We’ll be working with legislative leaders to solve it.” But he stopped short of calling for reopening the $1 billion downtown Minneapolis stadium plan.

He is pegging his hope that streamlining the state regulatory process will make more games available. Some state lawmakers are getting a little jittery, as well they should. Rep. Joe Atkins, DFL-Inver Grove Heights, wants some options to be ready as soon as possible. Rep. Ryan Winkler, DFL-Golden Valley, said no one should be surprised by the shortfall and points to the backup revenue plan in the form of a sports-themed lottery and a stadium suite tax. And Sen. Julie Rosen, R-Fairmont, who was the chief Senate sponsor of the stadium bill, said all that’s needed is more and better marketing.

There are two reasons the revenue is not coming in as projected. First, pulltab gambling itself does not rise exponentially because there are more machines or opportunities to gamble, especially at the accelerated pace stadium proponents had hoped it would. You either are a pulltab gambler or you’re not. Even for the veterans, the electronic pulltab games are still pretty rare nationwide. No one really has a good feel for how such machines will do in Minnesota.

Secondly, disposable income has been hit hard with the recent federal tax increases and the loss of the payroll tax credit – not to mention more tax hikes being eyed by the governor.

There were earlier revenue projections tied to the backup plan, and these need to be reviewed in light of the poor estimations done by proponents for pull-tabs. And should these projections fall short of the needed amount, then the state has every obligation to reopen the stadium funding plan for debate and negotiation.

We have time now to work on alternatives and kick them into high gear. The longer we wait and if revenue projections continue to fade, the temptation will be to “meet our moral obligations” and dip into the general fund. That is not and should not be an option. Prudent planning now will prevent that.