Dayton and legislative leaders have embraced increasing the tobacco tax, which could raise as much as $735 million over the next two years. Others are pressing for a nickel-a-drink hike on alcohol, which could bring in millions.
Dayton has remained cool to that idea, but political insiders are watching the issue more closely as a new lobbying force has entered the Capitol — Bill Messinger.
Messinger, who owns a business that specializes in helping people with chemical addiction, says that higher alcohol taxes could fund chemical dependency programs.
He is married to Dayton’s former wife, Alida. She is an heir to the Rockefeller fortune and mother to the governor’s two grown sons. Her millions helped get Dayton elected and the two remain close.
Dayton spokesman Bob Hume said the governor’s reservations about the alcohol tax are not as strong as they are to the gas tax or sales tax expansion.
“If it was part of a larger tax bill that he was supportive of, he could come to a compromise,” Hume said.
House and Senate leaders have other big differences, and the window for settling them is shrinking.
The House wants to spend $250 million in property tax relief that would largely be spread out across 1 million homeowners and renters in the form of rebates and credits. Some Senators don’t like the idea.
While rebate checks can be a pleasing election-year giveback, consumers can end up losing a large share through federal taxes.
Many House members dislike the Senate’s proposal to broaden the sales tax to clothing and some personal services. The plan is similar — although smaller in scale — to an ambitious tax overhaul Dayton proposed and then quickly withdrew after searing opposition from the state’s business leaders.
“We heard the governor when he said some reform or none at all,” Lenczewski said. “We are not going to open that this year.”
Legislators also are struggling to thread the needle on two controversial projects: The Vikings stadium and a request by Mayo Clinic for more than half a billion dollars in state aid to finance a makeover of Rochester, the clinic’s home base.
Lawmakers who thought they settled the stadium issue last year have found to their dismay that the financing that was to have paid the state’s share — e-pulltabs and e-bingo — are bringing in a fraction of the revenue expected, touching off a frantic search for cash.
Some legislator are pinning their hopes on a new tax on all professional sports memorabilia to come up with at least part of the state’s $30-million-a-year tab.
In the meantime, Mayo Clinic has its heart set on a massive expansion in Rochester, but insists that it needs about $500 million from the state. At that price, the state’s share would be another $30 million a year.
Legislators have already rejected the clinic’s initial plan, but are trying to craft alternatives, lest the renowned clinic move its expansion to satellite clinics in Arizona or Florida.
We are going to give Mayo’s request “a little bit of a haircut,” Lenczewski said. “I think it’s a pretty heavy lift for Minnesotans, but we do realize that we are big beneficiaries by having Mayo Clinic here and having them grow here.”