The Star Tribune reported on Friday that Minnesota governor Mark Dayton introduced a new revenue proposal that would more than double the tax on cigarettes from $1.23 per pack to $2.83 per pack by July 1. The state is currently on the hook for $348 million of stadium costs and revenue from electronic gambling games, the original source intended to cover that tab, has come in far short of original projections.
Revenue Commissioner Myron Frans noted that raising the tax on cigarettes would bring in an added $24.5 million in the first year and would replenish the stadium’s reserve fund and cover any current shortfalls.
The plan, which would also close a corporate ‘tax avoidance loophole,’ was accepted in principle by legislative leaders in charge of drafting the tax bill by Monday at midnight. However, it does have its detractors with Republican legislators attacking it as a funnel from schools, nursing homes and health and human services, which normally receive those funds, leaving taxpayers on the hook.
Vikings Vice President Lester Bagley was encouraged that the state would be honoring its commitment, calling the new plan “a viable, long-term solution to the electronic-pulltab shortfall.”
On top of the cigarette tax, the proposal also called on closing a corporate “tax avoidance loophole” slated to net $20 million per year. Intended as a backup source of funding, it would increase corporate taxes for companies with sales inside and out of Minnesota.
Frans added that the revenues would be used for regular budget needs unless needed to cover stadium funding.
Construction on the new stadium is slated to begin in October. The Metrodome, where the team will play its final season in 2013, is set to be torn down in “early 2014” to finish the rest of the construction. The Vikings have agreed with the University of Minnesota to play in TCF Bank Stadium on the campus for two seasons and the new stadium is scheduled to open in 2016.