Economic Output of Replacement Vikings Stadium Construction (Spend $650m to make $33m)

If you like big numbers that don’t mean much, check out this one from Cory Merrifield with Save the Vikes:

#FOD According to Convention, Sports & Leisure, the building of a #Vikings stadium will have a $1.4B economic output to MN. #Booya! #Mnleg

$1.4 billion is a very big number. If you consider that the Vikings are begging for a $650 million gift from the public and the stadium would generate $1.4 billion in economic output, this must be a no-brainer, right? Well, not really, since a dollar spent in the state, city, or county does not equal a dollar earned by the state, city, or county.

If Cory Merrifield had bothered to read the very next page of CSL’s report (flip from page 8 to 9 to see for yourself), he would know this. On Page 9, they explained:

A total of $33.2 million in personal income taxes and State and local sales taxes are estimated to be generated by the construction project.

$33.2 million in one heck of a lot less than $1.4 billion. Perhaps this chart will explain the difference between Merrifield’s misleading tweet and reality:

Return on Construction Costs of $650m Public Gift to Vikings

One of the reasons why the actual return to the public is so low is because the Vikings are demanding that their construction materials be tax exempt. I don’t know about you, but when I pick up construction supplies for my house, I see sales taxes on my receipt. In fact, if the state gave away $650 million for home improvement materials where the money had to be spent within the state, that would generate $44,687,500 back to the state through sales taxes, plus additional money through city and county taxes. Upgrading MN’s housing stock would actually pay more short-term, and more long-term through increased property taxes (another tax that we pay but the Vikings refuse to pay).

2 thoughts on “Economic Output of Replacement Vikings Stadium Construction (Spend $650m to make $33m)”

  1. Before this devolves into the usual shouting match, I just want to say that this is a very good post. The difference between economic output/activity and money earned on an investment is important to understand in this debate, and the sales tax comparison was very illuminating.

  2. Thanks, Tony. Another reason the Vikings stadium construction revenue generation is so low is because – on top of the $650 million gift they’re demanding – they also want construction materials to be tax exempt. That’s on Page 3 of the CSL report.

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