I don't know all the details about the much feted "Jesse" proposal, so please correct me where I have my facts wrong. But I do wish to make a few comments about the proposal as I understand it.
First of all, a big part of the proposal is that the State will issue bonds to pay a large chunk of the stadium. The idea is that Minnesota can issue these bonds more cheaply than the Twins because Minnesota's bonds are exempt from Federal income taxes to the holder of the bonds. A way to get an involuntary subsidy from the Feds I guess. But there is more cost of these bonds than from the Feds. The State cannot just issue such bonds at will, for no cost. The more bonds the State has, the higher it must pay in interest - that's the way of the market. Perhaps adding just the amount of the stadium bonds would not change the interest rate (though I haven't heard any facts one way or the other). But even if that's so, it still lowers the capacity of Minnesota to issue bonds before the rates do increase. So issuing the bonds does have a cost to the State. Secondly, I've heard that Minnesota is supposed to make 8.5% on some other funds to pay off these bonds? That is a very high percentage to expect a sinking fund to make. I would expect this fund to be essentially risk-free, which means they must invest in US Treasury Bonds. What are Treasuries making these days - 4 or 5%? Of course we could invest in stocks which have an expected return of 8.5% or more, but then we'd risk losing it all. That risk sounds like a very large cost to me. Of course the most obvious cost of this proposal, is what makes this a Mpls-specific post, and that is the cost to the locality. Whether that results in a general sales tax increase, a tax on restaurants or bars or however invisible the politicians try to make it, it still results in a tax on you and me. For that reason I would much rather it went to St Paul, but even then I imagine they'd find some way to stick us with some of the cost - at least if we go to a St Paul restaurant. I have occasionally heard the argument that we could just take those taxes that wouldn't exist if the Twins weren't here. For example, the tax on the visiting baseball players' salaries. This argument is economically incorrect. These baseball players receive their salaries from us when we go to the games. If the Twins weren't here, we wouldn't have their salaries to tax, but then we wouldn't be spending our own salaries on the games either. Our salaries would be spent elsewhere - and those other places would provide us with just as much income tax as baseball does. Let the Pohlads of the World try to make money in baseball; for government it's just a money pit. I admit that I don't really care if the Twins or Vikings, or any other team leaves town. I never go downtown to a game. I may watch sports on TV occasionally, but the game is just as good if it's coming from Milwaukee's subsidized stadium as it would be from Minnesota. I remember when they were discussing putting up the Hump-dome in the late 70's. I was in college and working part-time at a funky factory near the U. We were complaining about the public cost of that stadium, and my boss commented "I wish they would subsidize my entertainment...or at least make it legal." I've always remembered that comment as a concise indictment of the government always trying to micromanage our lives. Mark Anderson Bancroft Ward 8 _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
