Greetings to all, I'm new to the list and had intended to lurk for a bit without commenting, but since no one responded to this directly I thought I would.
I want to preface this by saying I'm a baseball fan with mixed feelings about public funding for stadiums. . > 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. > You make some good points here - but one has to consider alternatives. If the state is involved in building a stadium how do we do it? Bonding seems to be a good approach. If not, what are the risks? How likely is it that we will be without professional sports and is that what we want? > 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. > Here I can make a more direct response. Yes, the proposal plays with the numbers a bit, but as I read it the Twins are responsible for guaranteeing the 8.5% return on the investment. They manage the fund as they see fit and if it doesn't earn that rate of return they pay the difference. I'm fine with that. > 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 can't argue with you there. As a Minneapolis resident and a Twins fans (who also loves going to Saints games), I'd prefer to see it in Minneapolis. However, if the cost and proposed increased taxes are incurred upon the host city - Go Mayor Kelly! > 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. > This is absurd. If there is no team here and I don't go to games, obviously it's a null argument. If the team is here he has a point, but only slightly. I can still choose to not go to a game (and if I do player's salaries have no direct cost to me). > 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. > Since I can't stand football, I understand your point. But I'd also say that I have yet to see any show whatsoever in Orchestra Hall - yet I think it was a worthwhile investment for public funds to be involved in that. I support pulic funding for the Guthrie and rarely (well, maybe twice a year) see a show there. There are things that we want to be part of our public infrastructure that we don't all use. I'm hesitatnt to include stadiums in that, but I guess I'd prefer that conclusion over not having pro sports. Jim McGuire Como _______________________________________ 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
