Monday, March 24, 2014

Minnesota Legislature Asked To Approve Tax Breaks Worth $10 Million To Lure Super Bowl

Minnesota taxpayers are learning that picking up more than half the tab to build a billion-dollar new stadium for the Vikings isn't enough for the greedy billionaire NFL team owners. If the City of Minneapolis hopes to beat out Indianapolis and New Orleans to host the 2018 Super Bowl, state lawmakers will need to approve tax breaks worth at least $10 million to entice NFL owners that their city is worthy of hosting a Super Bowl. The Star-Tribune discusses the battle brewing in the Land of 10,000 Lakes:
A tax relief package designed to lure the Super Bowl to Minneapolis is running up against the limits of bipartisan zeal for cutting taxes at the Capitol this year.
DFL Gov. Mark Dayton met recently with legislative leaders from both parties to press his case, and cautioned against a partisan fight that could doom the state’s Super Bowl bid.
“Life will go on if we can’t keep this out of the partisan politics,” Dayton said. “We’ll just have to let the opportunity go by.”
Under consideration is roughly $10 million in tax breaks for gameday player salaries, NFL Super Bowl events and even tickets to the big game, which can reach $2,600 for the best seats.
Hanging in the balance is a once-in-a-generation opportunity to showcase the state and the new $1 billion Vikings stadium before an international audience totaling hundreds of millions. State leaders must weigh it all against the political consequences of handing out tax breaks to the National Football League and potentially some of the nation’s most highly paid athletes.
Minneapolis is competing against Indianapolis and New Orleans for the right to host the 2018 Super Bowl. With the final pieces of the old Metrodome coming down, stadium officials face a deadline to put together a proposal by next month. A decision is expected in May.
“The new stadium is a significant component in analyzing Super Bowl bids, but that alone won’t deliver it,” said Lester Bagley, Vikings vice president of stadium development. “If the public sector is not fully on board, it won’t work.”   . . .
“No, no, no,” said Sen. David Osmek, R-Mound. “Why should we be giving tax breaks to millionaires and billionaires when we can’t fill potholes in Minnesota?”
Osmek said the NFL gins up the competition and then works community leaders into a frenzy over who can offer more. 
“The NFL is playing us all against each other,” he said. “Why can’t Minnesota be the first one to get off this train and say, ‘Stop?’ If the Super Bowl wants to come to Minnesota, then you pay the same taxes as Joe Taxpayer in Minnetonka.” 
The proposal scrambles the usual partisan dynamics around the Capitol, with Republicans speaking stridently against the kind of tax breaks they usually embrace and Democrats open to tax relief for the multibillion-­dollar NFL. 
House Taxes Committee Chairwoman Ann Lenczewski said she hopes legislators move past the divisive fight over the new stadium, which pulled together one of the most politically diverse and fragile coalitions in recent history. 
“People need to think about this a little differently, now that the stadium is approved,” said Lenczewski, DFL-Bloomington. If the economic benefits can be proven, “it probably warrants some help,” she said. 
One major snag for many legislators is the proposed tax break for players’ gameday ­salaries. 
“If you are an NFL player, and you get to go to the Super Bowl, are you not going to come if your income taxes aren’t exempted that day?” Lenczewski asked. “That one would be off the table, for me personally.” . . .
Indiana lawmakers approved nearly identical tax breaks for the NFL as part of its efforts to lure the 2012 Super Bowl, a law that remains on the books. As with Indianapolis, the proponents of Minnesota's Super Bowl efforts are throwing out outlandish economic benefit numbers to tout the tax breaks for the billionaire team owners. Boosters of Minneapolis' bid to host the Super Bowl claim that the event will generate over $300 million in economic benefits to the state of Minnesota, although the newspaper notes that some independent analysts put the actual benefit well below $100 million.
Experts who study the economic impact of Super Bowls remain deeply skeptical about the sky-high predictions.
Lost in the hoopla over the highly touted benefits, they say, is a list of unaccounted-for costs, like additional law enforcement, preparation and cleanup.
Robert Baade, an economics professor at Lake Forest College, said much of the reported economic impact is for player salaries, souvenirs and other money that leaves the community after the game.
Oftentimes, the hassle of the event drives away people who would have visited the city otherwise. Studies show that this year’s Super Bowl resulted in disappointing occupancy rates for hotels in New York and New Jersey.
“When you consider all of that, the economic evidence is significantly muted, or close to zero in some instances,” Baade said . . .
I remain convinced that Indianapolis actually realized no net economic benefit from hosting the Super Bowl in 2012. Public outlays to host the event reached close to $50 million when factoring in all costs, including expenditures and foregone tax revenues. Most of the businesses that saw the greatest windfall from the event were hotels, restaurants, limousine services and other service-related businesses that aren't locally-owned, which means most of the revenue windfall flowed out of the city and state. Many of those businesses even imported temporary workers into the City to work at their establishments who left with the wages they earned following the event. Making matters worse was the over-utilization of hundreds of volunteers by the local host committee instead of putting unemployed persons to work.

UPDATE: Fellow blogger Doug Masson picks up on an executive order that Gov. Mike Pence issued without fanfare earlier this month in which he makes a pledge to the billionaire NFL teams that the state of Indiana agrees that "neither the NFL, the teams, nor any director, shareholder, officer, agency, employee or other representative of the NFL or the Teams shall be held accountable for or incur any financial responsibility or liability of any kind whatsoever in connection with the governmental services planned and/or provided by the State of Indiana relating to Super Bowl LII and related official events." He also pledges state resources to protect against "any unauthorized promotional activities during the two weeks prior through the week following Super Bowl LII and related official events . . . " I guess Gov. Pence is officially a whore for the billionaire NFL team owners. Too bad he isn't as generous with state resources when it comes to ordinary Hoosiers.


Anonymous said...

Only $10 Million? Hell they're getting off easy compared to Marion County taxpayers.

Gary R. Welsh said...

Getting off easy? They are building a $1 billion stadium as opposed to our $700 million stadium just to be able to compete to host a Super Bowl.

Anonymous said...

Our stadium would be $1 Billion in today's costs likely.