Mpls-Issues tip: PLEASE trim the previous message when responding. The redundant characters make tough reading for Digest subscribers and needlessly lengthens download times. ----------- I have transcribed below a handout distributed at the May 11, 2001 House Tax Committee hearing on the latest Twin Stadium Bill. This information is a list of state public support subsidies going back to 1985. This list includes subsidies for Minneapolis projects. This information was prepared by House Research and I believe Chairman Abrams said it is not an exhaustive list. My comment is that the information is useful for putting the current debate in context and cutting through the hype and hysteria regarding current stadium subsidy proposals. Bill Dooley (Ward 13-Kenny) ----------------------------------- BENEFICIARY Northwest Airlines (1991) PUBLIC SUPPORT IRRB forgivable loans. Forgiveness based on maintaining employment levels PURPOSE Construction of Chisholm reservation center. VALUE* $6.7 million for 5 years $3.0 million for 8 years BENEFICIARY Northwest Airlines (1991) PUBLIC SUPPORT State general obligation bonds PURPOSE Acquire land, buildings and equipment for lease back to NWA VALUE $270 million BENEFICIARY Northwest Airlines (1991) PUBLIC SUPPORT Metropolitan Airport Commission loan PURPOSE Pay debt service to secure bonds VALUE $45 million BENEFICIARY Northwest Airlines (1991) PUBLIC SUPPORT State general obligation bonds for loan to Duluth Economic Development Authority PURPOSE Construction of hanger and associated facilities at Duluth airport VALUE $47.7 million BENEFICIARY Northwest Airlines (1991) PUBLIC SUPPORT Tax expenditures job tax credit PURPOSE Five years of tax credit for jobs at the Duluth maintenance facility VALUE $1.3 million FY96-FY97 (estimate based on tentative schedule) BENEFICIARY Northwest Airlines (1991) PUBLIC SUPPORT Sales tax exemption PURPOSE Exemption from sales tax for materials used to construct aircraft facilities VALUE $1.7 million FY95-FY96 (estimate based on tentative schedule) --------------------------- BENEFICIARY Ethanol (various years) PUBLIC SUPPORT Subsidized loans through various loan programs PURPOSE Construct production facilities VALUE $3.5 million ($500,000 each for 7 plants) BENEFICIARY Ethanol (various years) PUBLIC SUPPORT State appropriation for Producer's payment PURPOSE 20 cents/gallon up to $3 million per plant and $30 million statewide VALUE $143.9 million from FY94-FY01. Estimated cost for FY02-FY03 is $88 million BENEFICIARY Ethanol (various years) PUBLIC SUPPORT Tax expenditure; Blender's credit PURPOSE 5 cents/gallon for distributors of gasohol (declining from 20 cents/ gallon to 0 cents on 10/1/97) VALUE $69.7 million in forgone taxes FY94-FY99 (repealed now) --------------------------- BENEFICIARY Target Center (1994) PUBLIC SUPPORT Standing State Appropriation PURPOSE Lease of the center by the Metropolitan Sports Facilities Commission for amateur sports events VALUE $750,000 year -------------------------- BENEFICIARY Fingerhut (1994) PUBLIC SUPPORT Expanded TIF district authority PURPOSE Expanded distribution center for mail order sales operation VALUE Estimates of $21 million in gross increment ----------------------------- BENEFICIARY DRI (1998-2000) PUBLIC SUPPORT Grants and property tax exemption for attached machinery PURPOSE Build direct reduction iron processing facilities and related utility plant in northern Minnesota VALUE $10 million grant, 1998; $30 million grant, 2000; Property tax exemption, 1999 ---------------------------------- BENEFICIARY Medtronic (1999) PUBLIC SUPPORT Extension of TIF, reduced aid offset and other features PURPOSE Construct parking ramp to facilitate construction of corporate headquarters VALUE Tax increment during extension of $51 million (state aid cost $39 million) ------------------------------- BENEFICIARY River Centre Arena (1998) PUBLIC SUPPORT Loan out of general fund PURPOSE Demolish existing arena and construct and equip new arena for professional hockey team VALUE $65 million ------------------------------ BENEFICIARY Lake Superior Center (1992, 1994) PUBLIC SUPPORT Appropriation of bond proceeds PURPOSE Construct aquarium and center VALUE $2 million in 1992 $4 million in 1994 -------------------------------- BENEFICIARY Science Museum (1994, 1996) PUBLIC SUPPORT Appropriation of bond proceeds PURPOSE Construct new science museum VALUE $1 million in 1994 $30 million in 1996 --------------------------------- BENEFICIARY Minneapolis Convention Center PUBLIC SUPPORT Appropriation of bond proceeds PURPOSE Expand convention center VALUE $87 million ------------------------------ BENEFICIARY Mall of America (1987) PUBLIC SUPPORT Loan from fiscal disparities pool to city of Bloomington PURPOSE Construction of highway improvements VALUE $19 million (approximate 1995 value) ---------------------------------- BENEFICIARY Saturn bid (1985) Note: Although passed by the legislature, this bid was not accepted by the company. PUBLIC SUPPORT Tax incentives: 30-year property tax abatement; 30-year sales tax exemption on equipment and building materials; 30-year corporate franchise tax exemption PURPOSE Attract construction of major automobile assembly plant to the state VALUE $804 million BENEFICIARY Saturn bid (1985) PUBLIC SUPPORT Direct spending for the company (infrastructure, job training, day care services, and so forth) PURPOSE Attract construction of major automobile assembly plant to the state VALUE $94 million --------------------------------- NOTE * These values should be treated with caution in making comparisons among projects. They are dollar amounts that were used during the legislative debates on and consideration of these provisions. First, they reflect gross, nominal amounts. They do not reflect any effects of inflation; they're not state in constant or inflation adjusted dollars. This makes it difficult to compare across periods of time (e.g. a 1987 provision v. a 1999 provision). Second, in many cases they reflect a sum of un-discounted cash flows that are not stated in present value terms. Finally, and perhaps most importantly, they are not consistently estimates of either state budget costs or benefits to the affected businesses. For example, low interest loans are listed at the face amount of the loan, while the benefit to the business is the present value of the interest savings. _______________________________________ Minneapolis Issues Forum - Minnesota E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
