Gov. Tim Walz targeted U.S. Bank Stadium's robust reserves with a proposal Tuesday to redirect the stadium's voluminous flow of electronic pulltab revenue into the state's general fund.
Walz wants to cap the stadium's reserve fund at $100 million and apply the excess — estimated at $130 million over the next two years — to an array of budget needs amid a state economy sagging under the COVID-19 pandemic.
While the governor acknowledged the reserve fund was created for the purpose of paying off the stadium debt, he cited its ballooning size as justification for shifting the money to other areas.
But Walz, a DFLer, can expect a strong fight from both the Minnesota Vikings — the stadium's main tenant — and the Republican-led Senate, where a bill will be introduced to refinance the stadium bonds in 2023, pay down the debt early and ensure continued use of the e-pulltab revenue for the purpose "intended" in the stadium legislation.
Said Sen. Julie Rosen, R-Vernon Center: "It's ridiculous that the governor needs to raid a fund that could possibly save the state $200 million with refinancing. How much more money does he need to spend?"
Electronic pulltabs were legalized as part of the Legislature's 2012 deal with Gov. Mark Dayton to build the $1.1 billion U.S. Bank Stadium. E-pulltabs took a while to catch on, but in the last few years sales have soared. The reserve fund is projected to hit $419 million by 2025.
Excess pulltab revenue flows to the stadium's reserve fund after the state has made its annual stadium bond payment, which hovers just above $40 million. Despite the closure of bars and restaurants for much of 2020, electronic pulltab sales have remained strong.
At a Tuesday news conference unveiling the state budget proposals, Management and Budget Commissioner Jim Showalter pointed out that with a reserve of $100 million the fund would still have more than enough to cover two years of stadium debt payments.
The stadium reserve exists to ensure that debt payments don't come out of general fund resources, he said, adding: "That has been clearly achieved."
Capping the reserve at $100 million, however, would make the excess pulltab revenue available for pressing needs, he said.
The Vikings don't see it that way.
"We would appreciate it if the governor and Legislature would honor the stadium deal that took multiple years to negotiate," Vikings vice president Lester Bagley said in a statement.
Sen. Tom Bakk of Cook, the former DFL Senate leader who is now an independent and chairs the Capital Investment Commitment, isn't buying Walz's proposal either.
"I expected that," Bakk said. "He's looking for money anywhere he can find it."
Bakk and Rosen plan to introduce a bill to require the state to wait and refinance in 2023 to remove the "temptation" to tap the cash. The state can refinance with tax-free bonds in 2023.
Bagley said that the state can cut 10 years and $10 million annually off the debt service by waiting.
"This would be the best deal for Minnesota taxpayers and would save them hundreds of millions of dollars in interest payments," he said.
Revenue from electronic pulltabs, located in bars that host local charitable gaming operations, cover the public's $498 million share of the stadium.
The state has been making payments on its $348 million portion of that bill, and the city of Minneapolis is due to make its first payment on its $150 million share this year. Minneapolis leaders have floated the idea of getting state relief for that $17 million payment.
Rochelle Olson • 612-673-1747