Beginning this fall, low-income student-athletes will not be able to get grants to offset the cost of playing sports, because legislators did not reauthorize a sales tax exemption on tickets for high school sporting events.

Legislators did not include the comparatively minuscule measure in the chaotic final days of the legislative session, where it got lost amid proposals for billions of dollars in spending and borrowing.

Gov. Mark Dayton said a condition to his calling a special legislative session next month is that legislators reauthorize the sales tax exemption.

“That’s something I would insist be part of the agreement” with legislative leaders before he calls a special session on a small range of issues, Dayton said last week.

The exemption, which expired last summer, generated roughly $800,000 annually, which helped defray the cost of participating in sports for low-income families. Over nine years, the Minnesota State High School League has distributed more than $6 million to schools around the state to reduce economic disparities in athletics.

Dayton blamed House Republicans for not including the tax provision, accusing them of seeking retribution for the league’s 2014 policy that opened up girls’ sports to transgender athletes.

The change prompted heated debate over transgender rights.

“They’re going to penalize all these kids out there who can’t play sports because they’re unhappy with a very carefully considered position that the High School League took,” Dayton said last week. “For the Legislature to say, ‘We don’t like a decision you made thoughtfully and carefully, so we’re going to shaft kids,’ it’s just beyond the bounds of responsible government.”

The omission of the tax provision comes amid a national debate over transgender rights. Eleven states have sued the federal government over guidance it issued to schools governing the use of restrooms and other facilities by transgender students.

Pressed to explain further why he blamed GOP legislators, Dayton said on Minnesota Public Radio that he learned through Senate DFLers that House Republicans opposed the sales tax exemption over the transgender athlete policy.

Only in Senate version

House Taxes Chairman Greg Davids, R-Preston, said that the omission had nothing to do with transgender athletics but that it got lost in the end-of-session scramble. He said that while some members of his caucus had unsuccessfully pushed for a transgender bathroom law this year similar to North Carolina’s, those conversations “didn’t influence me.”

Davids said that the sales tax exemption did not have widespread support and that it was only included in the Senate’s version of the tax bill, which is why it got lost during final negotiations.

Legislators are awaiting action by Dayton on two recently approved bills: a $259 million package of tax cuts and a supplemental budget bill.

Dayton is also considering calling legislators back to St. Paul for a special session to resume work on a public-works bill and possibly transportation funding.

Little time spent on issue

Senate Taxes Chairman Rod Skoe, DFL-Clearbrook, said the sales tax provision generated little discussion among legislators working on the final tax bill.

“I personally think it’s almost unbelievable … that we’re focusing on an $800,000 sales tax provision that, to be honest with you, we didn’t spend any significant time on at all,” Skoe said.

He said Dayton should not veto the entire measure over the relatively small provision. Hanging in the balance is a first-of-its-kind tax credit for student-loan debtors and other tax cuts for working families, veterans and businesses.

School boards’ support

Rich Matter, an assistant director with the Minnesota State High School League, said Friday that because the exemption expired last summer, the foundation’s funds would be exhausted by this fall.

The exemption also had the support of the Minnesota School Boards Association (MSBA), which advocated making it permanent in its legislative platform: “These board members see firsthand how these dollars allow students from difficult financial circumstances to participate in High School League activities. MSBA’s 2,200 locally elected board members strongly urge the committee to support [the bill] and continue this valuable program.”


Staff writer Patrick Condon contributed to this report.