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Monday, February 06, 2006

Tax Implications of Stadium Boondoggle

Plymouth Mayor Judy Johnson commented on my post about the Edina City Council meeting which will discuss taking a stand against a stadium tax without a referendum.

The Plymouth City Council, last year, passed a motion that Hennepin County should send this proposed tax increase to the voters as required by current law. The county commissioners, on a very narrow split vote, chose not to do so and want an exemption from state law to enact an increase in the sales tax on Hennepin County taxpayers. All cities pay sales tax on their purchases - enacted in the early 90's when the state hit deficits a decade ago. The state sales tax is, therefore, rolled into property taxes. Also, cities that propose a local option sales tax or an increase in their sales tax for local projects, like libraries, must go for voter approval as required by state law. I would hope common sense would prevail and not force a minority of taxpayers to be left without a voting voice - this is very bad tax policy.

Judy said it well.

Steve Kelley's campaign media advisory for this week stated:

Monday, February 6th, 2006, 9:45 a.m. – Senator Kelley will participate in a private meeting at the governor's mansion in St. Paul to speak with the governor and caucus leaders about various stadium issues in Minnesota.

I called the Governor's Office this morning and his staff told me he strongly prefers a referendum requirement in a stadium bill. I asked if the governor was planning on vetoing a stadium bill that didn't require voter approval. The staff did not know the answer to that one. It's very irritating that reporters don't ask Governor Pawlenty that question during a press conference. Then I wrote Kelley's campaign about the stadium:

On Mon, 6 Feb 2006 08:26:09 -0600
If I understand Kelley's public statements - he favors increasing taxes on Hennepin County residents for a Stadium - and supports the exemption from the referendum requirement.

What I don't get is if the stadium is a state wide asset, then taxpayers statewide should pay for it. Why should legislators from St Paul, Willmar or St Cloud vote to increase Hennepin
County taxes?

Is that correct?

Eva Young

Laura Lehman from Citizens for a Stadium Tax Referendum also wrote Kelley's campaign. I am posting her email with her permission.

Dear Jessica,
I am a Democrat planning to attend caucuses and undecided about my choice for governor. I am perplexed by Senator Kelley's position on the (potential) Twins Stadium, given that Democrats are not usually proponents of corporate welfare (of which this is a prime example) and given that the Team Owner and 4 self-serving County Commissioners are attempting to circumvent Minnesota law by exempting the desired stadium (sales) tax from the required referendum. I have always been under the impression that DFL candidates could be counted on to stand up for the rights of the (common) people. Senator Kelley's position on the Twins Stadium flies in the face of all that the DFL stands for. What is his explanation for this so that I may explain it to others at the caucuses in March.
Thank you for your assistance.
Laura Lehmann.

Jessica Null from Kelley's campaign responded:

He does support the stadium, but he believes things like education and health care are far more important--and if there is an increased statewide tax the money could and should arguably be used for education and health care, he believes. He does support an increase in revenue to fund those things, but the governor resists.

The legislators do not vote to directly increase taxes. The vote is to give the OK to the Hennepin Cty Commissioners to consider and vote to increase taxes.


I thought this was avoiding the issue.

Mon, 6 Feb 2006 11:52:04 -0600
Jessica: Actually that's not correct - the stadium bill would exempt Hennepin county from the referendum requirement in this bill. Why should the county be exempt from a referendum for this - but school and library bonding bills require voter approval? This makes no sense. If the legislators vote for a bill that exempts Hennepin County from the referendum requirement in state law, then they are voting to increase Hennepin County sales taxes.

So my question is - why does Steve Kelley support an exemption in state law from the voter approval requirement for the Twins Stadium - while we vote on things like the Central Library (Minneapolis voted to increase property taxes for that), and public school bonding or class size reduction funding referendums? Three Hennepin County Cities have come out publicly favoring a referendum. Edina is considering this at their City Council meeting on Tuesday.

I'll agree with you on this - the County Commissioners pushing this should be dumped. It's very interesting that the county commissioners who favor this, aren't willing to put language precluding them from getting the cushy part time jobs on the stadium commission. The reason the Henn County Commissioners don't want to have voter approval on this is, it would help an opponent - this is especially true for Opat.

Kelley campaign response:

Technically they are not directly voting to increase Hennepin county sales taxes; but in principle yes, they are, because they know that 4 of 7 commissioners support doing that and will vote to do that.

The difference between this instance and those you mentioned below is that this is a sales tax and school and library bonding affects property taxes. This is not new--in the past the state has authorized cities to construct things without a referendum--the Mpls, St. Paul, and Duluth Convention Centers for example--all with local option sales taxes and not property taxes.

Sen. Kelley has been consistent on this issue in the past. He believes that in a representative government such as ours, elected officials have a responsibility to listen to voters, learn the issue, make a decision, and then be held accountable during elections.

We also have Sen. Kelley's short answer to the stadium question on our website, on the Issues page, under FAQs if you want read more.