One part of the financing plan created in spring of this year, in addition to the state’s ability to pay its share of a new Vikings stadium, appears to be coming about as expected.
A one-time tax on cigarettes will yield $ 26.5million for the stadium and about $ 4 million more for the general fund, the state Revenue Department said on Tuesday.
That’s $ 30.4 million total is reduced slightly from the $ 32.4 million estimated in May, but officials said the revenue can come in higher when the taxes are collected next month.
The cigarette “stocking fee” – payable by wholesalers and retailers to apply the new cigarette tax to the state inventory in place until July 1 - was one of the sources of income of Gov. Mark Dayton came up in the most recent legislative session to support the sagging tax revenues from the newly authorized electronic forms of charitable gaming.
Proceeds from the “electronic pull-tab” had to supply the state with its $ 348 million share of the $ 975 million stadium, but it soon became clear, the income will fall short.
The 26.5million from stocking fee goes to the stadium due to the reserve to eliminate a $12 million deficit for 2014-15 and be available for use in the future, officials said.
That reserve account, plus any tax revenues from charitable gaming - both paper and electronic - more than $ 36.9 million in the first year things tapped to pay off bonds for the stadium.
If the reserve account, and electronic gaming revenue can’t pay the bonds, the first backup to $20 million a year from corporate tax law changes made last session.
If that’s not enough, the original sources of the backup account stadium will blow in the first sports-themed state lottery is expected to yield about $ 2 million a year, the collection of the tax, which is to raise about $ 1 million a year since 2017.
As a practical matter, Dayton is not based on income from electronic pull-tabs to help the state to make its stadium bond payments, said spokesman Bob Hume.
But, according to current projections, the amount of payments in bonds - $ 20 million for 2014 and $33.5 million in the year after that - the pull-tabs still have to generate about $ 10 million a year in bonds after 2014, even after pressing the standby power.
Revenue Commissioner Myron Frans said that those debt service assessment in February and could change this fall, and he noted that the city of Minneapolis will be picking up a large share of the tab stadium, as time goes on.
State leaders raised the cigarette tax by $ 1.60 a package last session, but it’s just a one-time stocking fee, which takes place in the direction of the stadium.
Hume said some people mistakenly believe smokers will bear the burden of financing the stadium on a regular basis. Under current law, he said, “the last dollar tobacco money that will never go to the stadium had already gone to the stadium.”