Feeble electronic pull-tab revenues have legislators checking alternatives

by T.W. Budig

ECM Capitol reporter


House Tax Committee Chairwoman Ann Lenczewski, DFL-Bloomington, presented a bill this week that would impose a 10 percent sales tax on sports memorabilia such as clothing, trading cards, photos and souvenirs. It also would extend the state sales tax to suites, box seats and seat licenses in stadiums and arenas.

Lenczewski offered her bill as an alternative form of financing the Vikings stadium. Electronic-pull tab revenue estimates have proven to be overly optimistic so far.

“It isn’t my intention to reopen the whole Vikings (stadium) debate again,” Lenczewski said. “My intention is not to play any games with this.”

House Speaker Paul Thissen, DFL-Minneapolis, said on Friday, April 12, that the consensus seems it’s “prudent” to take action.

Sports Facilities Authority Michele Kelm-Helgen suggested in committee the proposed sports memorabilia sales tax was more in-line with the spirit of the stadium negotiations than the tax on suites, box seats and seat licenses. It’s too early, she argued, to judge the soundness of electronic pull-tabs.

Rep. Kurt Zellers, R-Maple Grove, portrayed a sports memorabilia tax as unfair.

“It’s not the fan who goes to the game (who’ll pay it),” he said, mentioning purchases made outside of sports venues.

Minnesota Twins, Minnesota Wild and Minnesota Timberwolves officials all spoke against the Lenczewski’s bill.

Viking stadium funding discussions spilled over into the Senate.

Senate Tax Reform Committee Chairwomen Ann Rest, DFL-New Hope, included sports memorabilia sales tax and suites, box seats, and seat licenses provisions in her committee omnibus bill.

“I’m certainly disappointed that the funding source isn’t proving adequate to fund the Vikings stadium,” Rest said.

Rest voted for the stadium bill only after getting over some reservations, she said.

“I didn’t care for the funding mechanism simply because it was gambling. But I decided, on balance, that I needed to overlook my distaste for gambling,” she said.

Sen. Branden Petersen, R-Andover, introduced a bill to reduce the state’s contribution towards the stadium by $200 million.

“Hardworking taxpayers should not be required to suffer financially for Governor Dayton’s fiscal gimmicks,” Sen. Petersen said in a statement. “This legislation will protect hardworking taxpayers from any future gimmicks that we know don’t work.”

Tax bill the only ride out of town, Senate tax chairman warns

If someone is thinking of pursuing Mayo medical destination center legislation as a stand alone bill, think again, Senate Tax Committee Chairman Rod Skoe, DFL-Clearbrook, advised.

“The bill is plum full of tax stuff,” Skoe said. “The train that’s leaving the station is the omnibus tax bill,” he said, speaking Friday, April 12.

Skoe expressed resolve at finding a solution beneficial for Rochester and the state, and one that would keep Mayo in Minnesota. He said the original medical destination center proposal failed to involve legislators.

Mayo medical destination legislation was before the House Tax Committee this week.

Rep. Ron Erhardt, DFL-Edina, asked Mayo officials if wouldn’t it be easier to build their destination medical center in the metro, where necessary infrastructure already exists.

“I actually was to offer up Edina,” Erhardt said, pointing out the city has several golf courses, one of which might work as a medical center site.

Sun may be setting on Sunset Commission

Sen. Bev Scalze, DFL-Little Canada, has come full circle on the Sunset Commission.

Currently, bills are before the Legislature to repeal the commission, ironically established recently to determine whether state agencies, boards, and department have outlived their usefulness.

Scalze said as a House member she voted for the commission.

“And they met a lot. They used a lot of staff time,” she said to a Senate committee. And all they came up with was one small group that wanted to be eliminated, she said.

Legislative Auditor Jim Nobles said his department was “indifferent” to whether the Sunset Commission existed or not. Nobles suggested larger state agencies are best examined on a program-by-program basis.

And you have to go beyond simply having people come in and testify. You have to dig in, Nobles said.

The commission’s biennial budget is $278,000.

Human Services Commissioner Lucinda Jesson, whose agency was scheduled to reviewed by the Sunset Commission, said she thought such a commission would work better with small government entities, but repeated Nobles’ argument that for larger agencies, it was best to approach them piece by piece.

The Sunset Commission theoretically can sunset state agencies and departments. Only legislative action could restore them.

It’s scheduled to resume work in the fall.

The legislative auditor, Nobles noted, will likely be soon auditing the so-called council of colors — Council on Black Minnesotans, Council of Affairs of Chicano/Latino People and Council on Asian-Pacific Minnesotans. These councils have been controversial, he noted.

Sales tax expansion debate rekindled

Senate Tax Reform Committee Chairwoman Ann Rest, DFL-New Hope, reopened the debate on sales tax expansion by bringing out a committee bill this week broadening the sales tax but also lowering it.

Democratic Gov. Mark Dayton proposed a sales tax expansion as part of his state budget, but after weeks of being pounded, walked away from it. But Rest said Senate Democrats remain very much interested in tax reform.

“On the tax committee, we’re very enthusiastic about following the governor’s lead in that regard. And we hope to bring him back, too,” Rest said late week. “We’ve had tax reform on the agenda and in bills for the last seven or eight years. I think the public is fully inform about tax reform.

“I think the public has been consulted over and over again,” Rest said.

House Speaker Paul Thissen, DFL-Minneapolis, said Friday it’s “unlikely” a sales tax expansion provision would be part of the House tax bill, expected to be released next week.

Thissen senses is the time isn’t right to pursue sales tax  legislation.

Legislative action begins to center on House, Senate floors

House and Senate legislators will begin bringing their respective budget bills to the floors.

On Monday, April 15, the House is expected to debate its economic development bill, with the Senate expected to debate its judiciary, state government and veterans budget legislation early week.

House and Senate will likely grind out budget bills all week, including Saturday.

In the meantime, House Democratic leaders plan to barnstorm the state this weekend, selling the bonding bill.

House Majority Leader Erin Murphy, DFL-St. Paul, said leaders will be visiting St. Peter, St. Cloud, Duluth, Brainerd, Rochester and Albert Lea.


Tim Budig can be reached at [email protected]

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