The Mulligan Session, Part II

The same DFL employees who gave us “E-Pulltabs” as a means of supplying “the state’s share” of an extorted payoff to an out-of-state billionaire for his real-estate upgrade (which fell 95% short of predictions, as predicted by certain right-wing bloggers) are going to try to take a mulligan and get it right on the second try, says this piece from the MinnPost’s James Nord:

The governor’s proposal would increase the cigarette tax from $1.23 per pack to $2.52 per pack – a larger jump than the 94-cent target he’d earlier proposed — and would require retailers and wholesalers to make a one-time payment on existing inventory that would funnel $24.5 million into the stadium reserve account, solving the shortfall there.

Where have we seen this before?

Oh, yeah – cigarette taxes never, ever raise the money they’re supposed to.  They rarely get 2/3 of the way to their goals.  Ever.

And a “one-time tax on existing inventory?”  Look for a fire sale on smokes the week before the tax goes into effect, and for chain convenience stores to shuffle inventory out of state pronto.

Then, if electronic pulltabs or linked bingo games fail to produce the revenue necessary to fund the state’s appropriation bonds for the stadium ["if" - heh.  Ed], the commissioner of Minnesota Management and Budget would have the authority to direct revenue from a closed corporate income tax loophole toward the stadium.

Frans said that closing the “tax avoidance loophole” would prohibit the current legal practice of some Minnesota companies that avoid paying full corporate income taxes on sales they make by shielding themselves through a subsidiary in a different state. He said more than 20 states have similar regulations in effect.

Dear Mr. Nord:  Not that I’m going to tell you how to do your job, but did you happen to ask Mr. Frans what states those were?  And how they’re doing in terms of business climate?  How well “closing” that particular “loophole” worked?

Remember – these are the same people who said “E-Pulltabs” would…y’know…work.

That measure is projected to bring in $26 million in the first year and roughly $20 million annually after that, although those totals could change as the conference committee works out the specifics of their compromise.

Frans said with the new contingency plan, which would also be backed up by current taxes on suites and memorabilia if for some reason it doesn’t perform, officials are ready to close the book on the shaky stadium funding issue.

“We believe it’s reliable, it’s consistent,” he said.

The Messinger Dayton Administration ”believed” a lot of things that didn’t turn out to be true.

If only we had an institution, with printing presses and transmitters and websites, staffed by people who see themselves as part of a truth-seeking monastic order, whose job it was to tell the public about these things.

When Making Your Weekend Plans…

…don’t get far from a radio.

Or a computer, or a mobile device.  You get the idea.

Big Northern Alliance Radio Network broadcast tomorrow.  We’ll have Cam Winton on to talk about the Minneapolis mayor’s race, and Senator Sean Nienow will be with us to talk about his call for an investigation into the Vikings Stadium funding fiasco.

That’ 1-3PM tomorrow, on AM1280 The Patriot!

You Were Warned – Really!

Last March, conservative bloggers – Gary Gross, me, and others – warned you that the Dayton Administration’s plan to use gambling revenue to build the stadium was pure vapor, and that Ted Mondale (of the Sports Facilities Commission) was blowing smoke up Minnesota’s collective skirt, since gambling revenues have been shrinking, not growing.  Charitable gambling revenues have been falling off for years; the Administration’s plan involves having gambling receipts double.  Immediately.

Yesterday we noted that the Administration is starting to walk back the shell game.  And now we’re discovering that the main venue for the electronic pull tabs that the Administration is counting on – veterans clubs – just aren’t adopting the new toy.

Dave Thul, writing at True North, is on the story:

 So the question is why Legions and VFW’s are so unlikely to move into E-tabs? The answer is complicated, but boils down to three main reasons. First, demographics. The average gambling manager and post commander is over 60 and set in their ways.

Most post officers and bookkeepers are volunteers, so they don’t get paid for running the gambling operations. But they are financially liable for any mistakes they make, meaning a simple gambling system is a safe gambling system.

Second is technology and a bit of Luddite-ism. Despite efforts to get younger veterans involved, the majority of VFW and Legion posts in Minnesota have internet access only for email or transmitting legally required gambling reports. E-tabs require a high speed always on internet access. E-tabs are also 100% dependent on technology; a power outage or a computer virus means no gambling. Paper pull tabs can be opened by candle light if necessary, and bar staff are familiar with the possible ways to scam the system. E-tabs need additional plug ins, charging stations, always on wireless internet connections that are secure against hackers, and a big investment in training time for bar staff.

The third reason is survival. The smoking ban that took affect in 2007 was a devastating blow to VFW’s and Legions across the state, and resulted in a fair number of posts being closed. Ever increasing taxes, ever more burdensome regulations (remember most bookkeepers are volunteers) and a recession that is dragging out into a fifth year are all taking a toll in posts statewide. Faced with all of these issues, bringing E-tabs into a post is simply a bridge too far for most to consider.

Beyond that?  The actual game machines; the state isn’t approving them for use in the state, even if bars and clubs do start turning out wanting them.

So how much are the people going to have to cough up to pay for Zygi’s Real Estate Upgrade “The People’s Stadium”?

We’re not going to know for quite a while.

 

You Were Warned

A source at the Capitol – who was heavily involved in the battle against public funding for the Vikings stadium – emailed me with his first “I Told You So” moment of the new political epoch:

I believe I said, all along the campaign for endorsement…the primary…and the general election:

“The numbers that are being projected, from gambling revenue, to pay the Vikings stadium bonds are wildly optimistic and won’t come true.”

I was right. And there are 32 references in the legislation to the General Fund. So guess who’s left holding the bag? That’s right…the taxpayer.

We were ALL sold down the river by the likes of Steve Smith, Connie Doepke, and Gen Olson…in SD33…one of THE most conservative districts in the State.

And I got their legacy…RIGHT HERE!

Both sides – well, two out of three sides at the Capitol, anyway, the “establishment” GOP and the DFL – lied to the people about how the state-funded improvements to Zygi Wilf’s real estate investment would be financed.

We – the conservative Republicans – warned you; we were right.

Open Letter To Helga Braid Nation

Senator Sean Nienow explains his votes on the Vikings stadium – and its half-billion-dollar infusion of public money –  in the Isanti-Chisago Star

It wasn’t just the price tag that compelled me to vote against sending the bill to the governor. It has a structurally unsound funding mechanism and it ignores and belittles the expressed will of hundreds of thousands of Minnesotans.

Not just belittled us, but insulted our intelligence.  I’m not someone who’s built a lot of “cherished family memories” around our underachieving football franchise – and I feel sorry for those that have.

Beyond that, though?  The Vikes’ strategy – ratchet up the sentiment, and then threaten to pull all of that out and go to LA (without threatening it directly, since it’d be a stupid idea for the NFL, and anyone who isn’t blinded by sentiment knows it) – was a masterpiece of cynical PR arm-twisting.  Also loathsome.

Nienow repeats some of the fiscal cautionary notes that many of us have been sounding for months:

In order to pay for the stadium, charitable gaming will need to more than double. To raise enough revenue, charitable gambling will have to increase about 130 percent over current levels. That increased level of charitable gambling will then have to be maintained for 30 years. Put that into the context of reality: Charitable gambling decreased 31 percent over 10 years.

You can see we are bucking a negative trend with hopes that we will reverse the trend, increase gambling by much more than double and then keep up that level of gambling for three decades. When this mechanism proves unsustainable and short on revenue, you the taxpayer will be on the hook to pay the stadium bills.

When that happens, it will be money taken directly from education, health care and other services we provide, to pay for the stadium.

Oddly, the governor and mainstream media were very, very quiet about this “feature” of the stadium “deal”.

Another provision in the law is not even for the Vikings stadium-refurbishing Target Center. Minneapolis residents recently added a requirement to their city charter requiring a public vote before the city spends more than $10 million fixing a sports arena. This law eliminates that expressed will of the people.

If today we can ignore their will, tomorrow it can be yours. That’s a dangerous precedent.

And it’s just a matter of time before the next major league franchise will be wanting new digs.

XCel is over fifteen and pushing twenty, after all; Target Center is twenty and change; “renovations” aside, both of those clubs will be demanding new stadiums before too long.

And their idiot fans will put on their jerseys and their wolf masks and mob the capitol and demand that the next bunch of gullible weak-kneed “moderate” saps do the will of the team and the Strib.

My question was always “If we don’t stop this organized larceny of the public largesse, who will?  If not us, who?”

Nienow, and most of the freshman class of Republicans, voted to let the 1% pay for their own real estate upgrade, and this blog thanks them.

Read the whole thing.

And get ready.  Because I figure we’re less than a decade away from the next such campaign.

(NOTE:  Kudos to Mr. D, who – to the best of my knowledge – coined the term “Helga Braid Nation”).

Conservative Voters: Step Back From The Ledge (Part II)

I’ve heard not a few conservative voters groan in frustration over the stadium vote this past few weeks: “why did we even bother voting for the GOP in 2010?”

And watching the way some “conservative” legislators caved in at the first sign of beer-gutted yahoos and their husbands flouncing about the halls of the capitol with their faces painted purple and the bratwurst-grease stains on their sweatpants concealed by the crocodile tears they were squirting at the thought that the taxpayers would let Zygi Wilf take all their precious family memories to California, it was easy to feel discouraged.

One might feel justified in asking – do any of these people have any cojones at all?

But a look at the numbers from the vote shows there’s a little more than that to be hopeful for.

———-

As I noted this morning, the Legislature voted by a  thin majority to support the stadium.  That majority included a sizable minority of the GOP caucuses.

Most of the GOP caucus did, in fact, vote against the stadium.

But it’s when you break down the caucus by class that you see the real distinction.

Let’s look at the House first.

Of the 71 House GOP caucus members, 33 voted Yes and 38 voted No.   Ten of the votes came from Freshmen Republicans (Fabian, Kiel, Kriesel, LeMieur, Murray (Rich), O’Driscoll, Schomaker, Swedzinski, Vogel and Woodard ) voted “Yes” – all of them but the retiring John Kriesel from outstate.  The other nine certainly owe us some answers.

But 18 of the “No” votes came from first-term Representatives (Anderson (Diane), Banaian, Barrett, Benson (Mike), Bills, Crawford, Daudt, Franson, Gruenhagen, Kieffer, Mazorol, McDonald (Joe), McElfatrick, Myhra, Petersen (Brandon), Quam, Stensrud and Wardlow).   They’re from all over the place; they were a majority of the GOP “No” votes, while the Freshmen were about a third of the “Yes” total.

Put another way?  The “No” voters had served an average of less than 2.5 terms; the “Yes” votes, an average of four terms.

In other words, the average “No”-voting Republican in the House came to office after the debacles of 2006 and 2008, and most of them in 2010; they remember the price of moderate hamsterism, and they rejected it when the chips were down.   The average GOP “Yes” voter has been there a while – in the cases of some of the old-timers, maybe too long.

In the Senate, the pattern holds: of 37 Republicans in the Senate, 15 voted “Yes” and 22 “No”.  That’s 60% of the Senate GOP caucus holding the line (it was 54% in the House).

And if you look at shelf life?

Of the “Yes’ votes in the Senate, only five (Carlson, Magnus, Miller, Nelson and Pederson) were freshmen.

But on the “No” side, of 22 votes, 15 were freshmen (Benson, Brown, Chamberlain, Dahms, Daley, DeKruif, Gazelka, Hall, Hoffman, Howe, Kruse, Lillie (Ted), Newman, Thompson and Wolf).

Put another way, the average “Yes” voter has spent just shy of three terms – almost 12 years, on average – in Saint Paul (and if you leave out the freshmen, it’s closer to four terms on average).

On the other hand, the average “No” voting Republican has been there a little over a term and a half (the seven long-timers voting “No” included indefatigable conservatives like Gerlach, Hann, six-termer Warren Limmer, Nienow, Ortman, Parry and Vandeveer, people who survived the debacles of 2006 and 2008 for good reason).

———-

So what’s the conclusion?

Conservatives can console themselves ever so slightly in the wake the stadium debacle in the fact that legislators elected after conservatives took real control of the GOP did, in fact, vote overwhelmingly conservative during the stadium debacle.

And fortify themselves with the absolute knowledge that we have to get more of the same in Saint Paul.

So what do we do about it?

More tomorrow.

Conservative Voters: Step Back From The Ledge

One of the worst takeaways from this stadium fiasco has been the wedge it’s put in the GOP – and which, naturally, the DFL are using on Republicans, inside and outside the party.

Which is politics, and to be expected.

But it’s also at least in part wrong.

Hear me out here.

———-

Conservative voters have become a majority among GOP activists.  It’s why the GOP has morphed from the party of Arne Carlson and Dave Durenberger 15 years ago to the party of Dave Thompson and King Banaian today; the base, and people who vote Republican, want it.

And when the party strayed too far toward being “DFLers with better suits” over the past decade, the voters punished them by staying home in droves in 2006 and 2008, and by voting with the Tea Party and expelling many of the “moderate” hamsters from office in 2010 (to say nothing of many liberals).   They were sent to office with a mission; cut taxes, shink government, get out of the way of job creation, among a few other things.

And they took a good whack at it this session – hobbled by a Governor whose only goal (and job) was to veto everything he could, and the rhubarb at the State GOP (which slopped over into the Senate) they certainly didn’t get it all done.

But the stadium?  That was the bill that’s gotten conservatives exercised, one way or the other.  It’s been amusing to see Ron Paul and Kurt Bills supporters laboriously backtrack to justify spending public money on the single least essential bill government has – Zygi Wilf’s real estate improvements.

The DFL and media (PTR) scarcely need to exacerbate the internecine scrum between Republicans over the stadium (although they are), though. We’re beating ourselves up hard enough.

I’m going to suggest that conservative Republicans have a little more to show for the stadium debate than the DFL, the press and our less sanguine friends may let on.

———-

On the surface, of course, the numbers just aren’t good.  The stadium passed both chambers:  71-60 in the House, 36-30 in the Senate.

The partisan breakdown looked like this (and this is my count, not the official one – I assembled much of this data manually, and errors are very possible – although they don’t really affect the conclusion):

House (and I know, the math doesn’t square with the totals I got from the Strib above – I’ll work on it when I get a moment – and it doesn’t change the conclusion, again):

  • For: 40 DFL, 33 GOP
  • Against: 20 DFL, 38GOP

Senate:

  • For: 21 DFL, 15 GOP
  • Against: 8 DFL, 22 GOP.

So on the one hand, it does make sense – the DFL, yet again, voted in greater measure to pick the taxpayers’ pockets.  Indeed, it’s instructive which Democrats voted no (in both chambers, they included Davnie, Dibble, Dziedzic, Eaton, Falk, Greene, Greiling, Hansen (Rick), Hausman, Hayden, Hornstein, Kahn, Laine, Lenczewski, Liebling, Loeffler, Lourey, Marty, McGuire, Mullery, Murphy (Erin), Pappas, Paymar, Scalze, Torres Ray and Wagenius) – for the most part, the ones whose constituents would actually have to pay for the stadium.  It’s the DFL philosophy writ small; make other people pay for your toys.

But the fact remains that there would have been no publicly financed stadium without GOP participation.

And the GOP voted for it; 15 of 37 Senators and 33  of 71 Representatives; a minority within the caucus, but enough to saddle the taxpayers with the bill.

But as the DFL and media (ptr) remind us, there are really two GOPs.  There’s the “moderate”, pre-Tea Party version, and there are the newcomers who came to Saint Paul in 2011 full of whiz and vinegar and on a mission to change government.  They are in fact the majority of the Senate GOP caucus.

What’s the divide in the vote between the “old’ and “New” GOPs?

More on that at noon today.

It Almost Makes Light Rail Look Fiscally Responsible

$77 per ticket per game.

That’s what the taxpayers will be paying to subsidize the Vikings stadium if the legislature caves in on the deal.

I’m getting those figures from that teabagging wingnut John Marty:

If the bill for the Minnesota Vikings new stadium passes the cost to taxpayers will be $77.30 per ticket, per game, for 30 years, according to an analysis by state senator John Marty, who submitted his findings to his colleagues yesterday (see his full report below). If the taxpayers of Minnesota think $77.30 is too much, Marty has even worse news: the real cost is much greater because his calculation does not include the value of the property tax exemption on the stadium and the parking ramps, nor the value of the sales tax exemption on construction materials.

Never thought I’d post a letter from John Marty that I agreed with – but here you go.

Letter 2.From.sen.Marty

In the meantime, Governor Dayton is holding a lot of key reform proposals – tax reform, LIFO – hostage behind a crowd of chanting purple-clad bobos who’d light their charcoal with the Bill of Rights to get the taxpayers to pay for their recreation.

And pay.

And pay.

If we don’t stop the NFL’s ongoing plunder of state and city taxpayers, who will?

Because if we pay for it now, they’ll be back in 31 years looking for another one, just about the time we finish paying $77 a freaking seat for the one we don’t have yet.

Shearing Begins

One upside of having a news site like the MInnPost:  while they are fashionably center-left, they are not completely in bed with the Sports-Industrial Complex.   Since they don’t “sell” any more “copies” on Vikings game days, they can actually report, y’know, facts.

Like this bit by Marlys Harris on the top five things they’re not telling you about the stadium.

Although it may be telling that they ignore the two parts that are directly traceable to the DFL – RT Rybak’s unfulfillable promise re the Minneapolis sales tax, and the complete fantasy behind Tom Bakk’s gambling revenue proposal.

Still, the more reporting people do on this mass-fleecing, the better.

Pure Vapor

Ted “Mini-Governor” Mondale wants you, the voter, to believe that 4-2=6.

Metropolitan Sports Facility Chairman Ted Mondale said the electronic pull-tab financing mechanism for the state’s $400 million share is solid, despite questions about gambling revenue projections and the bonds the state intends to sell. Mondale also seemed to be hinting that he’s not worried about charitable gambling operators’ complaints about their taxes:

“As it relates to the revenue estimates. We believe that the total pot in the first year will be $72 million. There will be a final negotiation when the bill goes through with the bars and the restaurants, but we think their revenue almost doubles.

That’d be amazing!

Of course, it’d involve gaming revenues taking a huge U-turn from their past ten years’ performance.  Gary Gross at the Examiner unpacks reality (I’ll add some emphasis):

According to this pdf report, the trend continues. In FY2002, gross receipts were $1,435,426,000. That figure had dropped 31% to $989,906,000 in FY2011. To be fair, that represented a 1% increase in receipts from 2010.

That said, that’s the only increase in gross receipts during the FY2002-FY2011 decade:

FY2010 gross receipts dropped 5%.

FY2009 gross receipts dropped 9.6%.

FY2008 gross receipts dropped 9.8%.

FY2007 gross receipts dropped 3.3%.

FY2006 gross receipts dropped by 4.8%.

FY2005 gross receipts dropped by 3.1%.

FY2004 gross receipts dropped by $100,000. That was listed as breaking even.

FY2003 gross receipts dropped by 1.2%.

FY2002 gross receipts dropped by .1%.

When you factor in the fact that only 4% of all receipts get to charities, there isn’t nearly enough revenue to pay off the state’s share of $398,000,000.

Mondale is saying that charitable gaming will not just turn around a constant bleeding away of receipts, but double.

This is more Democrat economics in action.

As we pointed out this morning, the Minneapolis “contribution” is wobbly as well.

DFL economics; based on phantom revenue growth and nonexistant consensus!

And 43% of this state voted for Mark Dayton exactly why?

A Stadium Built By Unicorns

In every engineering company in America, stuck on a bulletin board or taped to someone’s cube, is this cartoon:

Everyone who’s worked in engineering or any kind of analysis has seen this sort of reasoning on projects; you start with parameters, end with a conclusion – and the details will get filled in later, once the stakeholders conquer than whole “Miraculous” thing.

It totally applies today.

——–

The Governor announced his new stadium plan today.

And if you, like me, have been adamant about not spending any public money on enriching Zygi Wilf – well, it’s mostly bad:

The officials were quick to announce the plan does not include any new taxes and includes a hefty contribution from the team.

Dayton said Rosen described the package as “the best deal available that’s possible.”

Dayton said the Legislature and the city must decide whether the state wants to be involved with professional football.

“I believe it does,” Dayton said.

Dayton said he will communicate with the Minneapolis City Council about the package shortly.

Under the “term sheet” announced today, the costs are divided 56 percent public, 44 percent private to put the facility up.

The problem?

For starters, as Gary Gross has been reporting for some weeks now, the public portion of the plan not only relies heavily on electronic gambling proceeds.  The plan presumes that revenue from these sources is going to boom - but it’s been drastically down in the past decade, over 20%.  The plan is to take all the new revenue and hand it over to the Vikes.

And that’s just on the state side.  The other public pillar of the plan involves the City of Minneapolis.

Minneapolis Mayor R.T. Rybak explained the sales tax structure and urged approval of the package.

But Doug Belden and Dennis Lien didn’t explain it.  It involves diverting the city’s convention center tax – and the City Council has already said no, no, a thousand times no, well, a thousand times.  Rybak is talking, as they say in Latin, de anus.

(Which may be one of very few cases where phrasing something in Latin is actually more gauche than the Englsh original, “out his butt”).

And like the cartoon above, this deal requires several miracles to occur.

The Minneapolis City Council needs a 180 degree change of heart on the “sales tax structure” that Mayor Rybak glossed over.

The charitable gambling market needs to counter its recent history, and not only expand, but hit a major boom.

And, by the bye, the Tribes need to not send squadrons of DFL assassin ninjas out to exact revenge for further eroding their monopoly on gaming in the state.  Which you know, if you follow the interactions between the tribes and the government at all, is about as likely as Ryan Winkler winning an arm-wrestling match with Jared Allen.

This “Deal” is no deal. It is vapor.  It counts on a miracle occurring.

And the City of Minneapolis, the Tribes, and the laws of economics have all outlawed miracles.

UPDATE:  A Capitol Hill wag wrote me: “it would be interesting to track the history of revenue projections from electronic pull tabs. seems rather variable, as in it seems to grow to fit whatever dayton wants to use it for. funny that estimates for gop initiatives never do that.”

I’m sure MPR’s “Poligraph” will get right on that.