Vikings stadium concept from HKS
ST. PAUL, Minn. -- A sale of bonds to finance the Vikings football stadium will most likely still take place on schedule in August. Those bonds will finance the state's $348 million share of the project.
A move by two Republican lawmakers to delay that sale, due to concerns about stadium revenue, hasn't gotten much traction yet at the State Capitol.
Sen. Sean Nienow of Cambridge and Rep. Mary Franson of Alexandria introduced bills this week that would put the bond sale on hold until legislators find a way to guarantee enough gambling revenue to repay those bonds.
Electronic pull-tab machines, the new form of gaming designed to pay for the state's portion of stadium, haven't lived up to initial expectations of the manufacturers and the Minnesota Dept. of Revenue.
"I didn't believe it at the time. I called it 'foo-foo dust' and all of that, but now it's proven to be the case," Sen. Nienow told KARE.
"Now we see 95 percent of the revenue is not showing up."
At the time the stadium bill passed, during the 2012 session, the electronic pull-tabs were expected to generate $34 million dollars during the 2013 fiscal year for the stadium fund.
So far the games have delivered only $2 million in revenue for the stadium, and the Dayton administration has downsized its e-tab expectations for the remainder for fiscal year's 2013, 2014 and 2015.
Once the bonds are issued the state will obligated make $30 million annual payments to retire that debt, beginning in 2014. If gambling revenues don't cover the entire bond payment, the balance would have to be taken from general fund tax receipts.
That would create political problems for those who promoted the stadium as a project that would not cost state taxpayers, or divert money needed for state government's core functions.
"We're either going to take money away from education and health care, or we're going to figure out a new, legitimate, viable funding source," Nienow said.
But legislative leaders from both parties, when questioned about it Friday at their weekly press briefing, said they expected the stadium bond sale to take place on schedule.
"I think we're still in a place where they can start to let those bonds," House Speaker Paul Thissen, a Minneapolis Democrat said, using contract terminology that means offering something for sale.
"But we clearly need to learn more and figure out what the lay of the land is."
House Minority Leader Kurt Daudt, a Republican from Isanti County, also said he didn't expect to see the bond sale delayed. He did say, however, he'd like to see the legislature take a closer look at the pull-tab issue before the end of the 2013 session.
Governor Dayton earlier in the week said policy makers will have a much clearer idea of the electronic pull-tab issue by 2014, when the first payment is due.
"I think this rush-to-judgment on it is very premature, and a lot of it's politically motivated," Dayton told reporters on Tuesday.
The electronic games are operated by charities across the state, and are taking longer to catch on than originally projected by the E-Tab manufacturers.
Traditional paper pull-tabs are available at 2,800 locations across Minnesota, but the e-Tabs machines are in place at only 200 locations at this point.
At first many of the game distributors in the state weren't able to get games to offer the bars and restaurants that currently offer charitable gaming. Those obstacles are being removed now.
"We believe by this time next year we will have a very firm grasp on what kind of revenue the charities are going to be able to deliver," Allen Lund, the executive director of Allied Charities of Minnesota, told KARE.
"At that point, if there is a gap, that's when we will need to talk about filling that gap."
He said the charities expect to send between $8 million and $10 million to the stadium fund in both 2013 and 2014, which adds up to $16-$20 million to go to the first bond payment of $30 million.
"A $10 million gap shouldn't be taken lightly, but it's much easier to deal with than the '$32 million' gap people describe."
Lund said that electronic linked bingo, approved by the state gambling board in March, will also make a major impact on the stadium revenue.
"When we have all the bars in Minnesota that want to participate linked up, playing for very large pots daily, we believe that's going to be real revenue generator."
The charities with gaming operations pay 22 percent of their receipts to the State in the form of taxes. The first $37 million generated each year goes to the state's General Fund to pay for other state functions.
Anything above $37 million can go into the stadium fund, according to Lund, regardless of what game raised the money.
"Paper pull-tabs, paper bingo, all of our current products are helping that stadium fund once we reach the $37 million General Fund commitment," Lund explained.
(Copyright 2013 by KARE. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)