Cigarette Tax To Pay For Vikings Stadium?

Posted at: 05/16/2013 9:41 PM
Updated at: 05/16/2013 10:23 PM
By: John Doetkott

(ABC 6 News) -- With electronic gaming revenue coming up short as a way to help fund the new Vikings stadium, the governor is eyeing a new way to come up with money.
And it’s not sitting well with some.

In order to raise the roughly $348 million the state has promised to contribute, Governor Dayton has proposed using a substantial tax hike on cigarettes to help pay for the project.

Despite the governor previously saying that cigarette taxes unfairly target poorer, working class people, lawmakers agreed Thursday night on a $1.60 tax increase, bringing the total tax up to $2.89 per pack.

That's nearly double the governor's original proposed increase of 94 cents per pack.

And many tobacco shop owners across the state are worried that the increase could hurt business as people cut back to save money.

“Some people simply won't be able to afford their cigarettes,” said Ben Wilder of Austin Tobacco. “I may have to put bars on the windows because our inventory will be worth a lot at that point," he joked.

The increase is expected to raise roughly $24.5 million for the stadium.

But if the cigarette tax is not enough to fill the funding gap, additional money could come from strengthening collection efforts on corporate income that some businesses have avoided by attributing in-state sales to out-of-state affiliates.