Archived Story

Dayton: Use cigarette, corporate taxes for stadium

Published 9:38am Friday, May 17, 2013

ST. PAUL — Gov. Mark Dayton proposed a new backup plan Thursday to shore up the state’s lagging share of the new Minnesota Vikings stadium, suggesting lawmakers use money from a tax increase on cigarettes and closing corporate income tax loopholes.

Dayton’s revenue commissioner, Myron Frans, unveiled the latest proposal in the House-Senate tax conference committee. It threw the contentious stadium issue back in the lap of lawmakers as they rush to wrap up this year’s session by Monday.

“We think this will solve the stadium financing issue,” Frans said.

The state’s $348 million share of the $975 million downtown Minneapolis stadium was supposed to be fueled by tax revenue from new electronic betting games that last year’s Legislature authorized in bars and restaurants. But sales of those games so far have badly trailed initial projections. The latest proposal calls for setting aside an estimated $24.5 million in one-time revenue that would be generated by applying a planned cigarette sales tax increase to existing cigarette inventories before the tax actually goes up — an approach Frans called a “stocking tax.”

Dayton is now backing a cigarette tax increase from $1.23 per pack now to $2.52, more than he initially proposed. The money from the stocking tax would be diverted to a stadium reserve fund. Smoking will not be allowed at the new Vikings stadium, due to open in time for the 2016 season.