Newspapers and magazines could be brought under the state sales tax as part of a package to fund a new Twins ballpark. On Tuesday, the House Taxes Committee cleared the proposal on a 13-11 vote and sent it to its next legislative stop. The periodicals tax would be paired with local taxes on bars, restaurants and hotels in the stadium's host city. The House plan is at odds with a plan expected from the Ventura administration later this week, and a Senate proposal that could be voted on Wednesday.
House Taxes Committee Chair Ron Abrams told committee members it's time to expose the misconception that a ballpark could be built exclusively with contributions from the team and surcharges on fans and stadium-goers. The Minnetonka Republican says the newspaper and magazine sales tax is frank acknowledgement that a stadium will require revenues from the general public.
"There has been an urban myth out there that you can somehow build a stadium through some sort of user fees and that you can go on from there. Can't be done. I think it is the obligation of this committee that if it does come forward with a stadium bill, that it works financially," Abrams said..
Legislative researchers estimate the periodicals tax could bring in $25 million annually. That, together with a local tax on food, beverages, and lodging, would produce roughly three times the amount needed to meet the debt service on stadium construction bonds.
But Abrams says some cushion is needed to make the bonds attractive to investors. And he says the remainder could be used to fund a new Vikings stadium.
The newspaper tax, however, drew criticism from some lawmakers. Rep. Ted Winter, DFL-Fulda, ultimately voted for the bill. But he says the periodicals tax strays too far from a stadium task force report that urged levying user fees to build a ballpark.
"I have real reservations on this tax and real reservations on this as a part of the way to build a stadium. And I think it's going to cause a lot of problems for us as people that have supported a revenue stream that comes from the team itself, the team playing in Minnesota," Winter said.
The periodicals tax would be subject to a non-binding referendum, and supporters say it would be difficult to ignore taxpayers' wishes if they vote the new tax down. The local sales tax hikes would also be subject to a referendum in the host city. That vote would be binding.
Still, the Twins say serious challenges remain. Under the plan, the team would have to fund half of the ballpark - estimated to cost $335 million. Twins President Jerry Bell says that could complicate plans to find new owners; owners who would face significant upfront costs.
"Purchasing the team, funding the losses, and even if it's $100 or a $125 million in cash up front, that's an awful lot to take on at one time," according to Bell.
Bell sent a letter to lawmakers last week asking that the state borrow for the team's share of the construction costs as well, with the understanding that those dollars would be repaid by the Twins.
The House plan does respond to another concern raised in Bell's letter; it directs revenues from stadium naming rights and the sale of personal seat licenses to the team.
The Senate proposal keeps those funds for construction costs. The Senate also uses a statewide tax on licensed sports memorabilia rather than a periodicals tax.
Gov. Ventura could present a serious stumbling block to both plans. While committee members were debating the House proposal, Ventura told the St. Paul Rotary Club that he continues to oppose using general tax dollars for stadium construction.
"I'm not about to use public tax dollars to build new stadiums. I'm not going to do it. If they can figure out a way to do it - there are some creative ways out there. We will be coming forward with a proposal from my office on how to do it," Ventura said.
Ventura spokesman John Wodele says the governor's plan could be unveiled by Friday, but didn't give any specifics. Wodele also called it "ironic" that lawmakers are now considering a newspaper and magazine tax to build a ballpark. Ventura proposed a similar plan to patch the state's projected deficit. But lawmakers rejected that idea early in budget discussions.More from MPR