Omnibus Tax Bill With Soccer Stadium Provisions Passes House Moves to Senate

by on 2 April 2017

The Minnesota State House of Representatives voted 80-52 to pass the omnibus tax bill HF4 on Thursday night. Votes on the Republican-sponsored measure followed closely by party lines. The bill, which includes tax exemptions for Minnesota United’s Midway stadium, was included in the measure but not before some drama occurred. Amendment A28 and A32 by Rep. Cal Bahr (R) Anoka, tried to strike both tax exemptions for the stadium arguing that it lowers Minnesota’s tax base. With the passage of the bill in the House, it now moves on to the Senate.

The approval of the bill makes it the first comprehensive tax bill passed since 2013, although there was an omnibus tax bill passed last year which was pocket vetoed by Governor Mark Dayton. The tax measure will give Minnesotans $1.35 billion in tax relief.

According to the House online publication Session Daily, other provisions in the bill include:

$585 million in reduced individual income taxes;
$205.3 million in changes to the state general levy;
$161.7 million in changes to the estate tax;
$97.1 million in reduced corporate franchise taxes;
$92.9 million in sales and use tax reductions; and
$16.2 million reductions in cigarette, tobacco and lawful gambling taxes.

House Session Daily also explains that included in the bill is the “highly controversial Republican proposal to pay for a transportation funding package. It would designate $450 million of various vehicle-related fees and taxes to road and bridge projects, rather than have the money go into the state’s General Fund.”

It also has a provision that would allow a refundable credit for a contribution to foundations that provide scholarships for non-public K-12 schools, make grants to charter schools, or foundations that support public schools. The bill would make private school tuition eligible for the education tax credit at a $23 million biennial cost to the state’s General Fund.

If the transportation and education provision remain in the Senate version, it could garner close scrutiny when the bill gets to DFL governor Dayton’s desk.

Rep. Cal Bahr (R) Anoka attempts to strike the soccer stadium language.

Finance & Commerce reported this past week, the stadium would generate approximately $3.1 million in property taxes every year if not for the exemption they are requesting. That number is based on the Minnesota Department of Revenue formula for valuing similar structures which would place the Minnesota United Stadium roughly at $75 million in taxable worth. Formulas on venues are often based on a lesser amount than what they cost to build because unlike an office building, a stadium is single purpose and cannot be resold as easily.

The sales tax exemption on construction materials for the stadium would be worth another $3.5 million.

During the house floor debate, Rep. Bahr created an amendment and asked for the two tax provisions for Minnesota United’s stadium to be struck from the bill. Rep. John Lesch (DFL) St. Paul, who in the past as been critical of the stadium, came to its defense. “Holy Hannah,” said an exasperated Lesch. “This is just spit in the hurricane compared to other tax breaks. This site, the bus barn site, was sitting vacant since I was born.”

Rep. Dave Pinto (DFL) St. Paul, recommended denial of the amendment 32 on a point of order. House Speaker pro tempore Pat Garofalo (R) ruled that A32 was out of order. A28 was voted on by a voice vote and was defeated.

You can watch Bahr’s amendment and discussion below.

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