Allied Charities of Minnesota

05/11/2018 Update

11 May 2018 07:51 | Allen Lund (Administrator)


With ten days to go before the end of the 2018 legislative session here is the current situation as I see it:

I was at a House State Government Finance committee hearing on Wednesday regarding the funding of veterans homes out of the stadium reserve account.  A report (see attached report) shows that the available stadium reserve fund balance in FY2021 will be $120 million dollars, $80 million more than is needed to pay the bond service.  I had prepared to testify (my remarks are attached), but was informed that no public testimony would be taken.  The Vikings were invited to testify, they did not attend, but sent a letter (see attached).  As I have said previously if we had a vote we would have voted for a lot of other items before we voted to pay for a billionaire’s stadium, but we did not get a vote.  The excess funds should be returned to the charities.  There was no discussion of lowering our gambling taxes along with the funding of the veterans homes.  

Our sales tax relief bill did make the House omnibus tax bill (HF4385).  The Senate did not include it in their omnibus tax bill (SF3982).  The bill is now in conference committee.  Time will tell if we make the final bill.  Sales tax relief would certainly be welcomed, but it is not the answer to our tax issue.  Sales tax relief would lower our overall taxation/fees from 27% to 26%.  The answer for us lies in our donations being tax exempt and changing the combined receipt rates to 6/12/18/24%. 

Our donation exemption bill (HF226/SF419) did not make the House or Senate omnibus tax bills.  This is what needs to be done and needs to be done this year.  The legislature has admitted and the revenue projections show that there will be more than enough money coming in to pay for the stadium bonds.  The longer we go without relief the less likely relief is going happen for us. 

Target paid $105 million (.001% of income) in state tax to our $72 million (27% of income) in 2017.  Their income was 256 times greater than ours ($71 billion v $277 million).  I wanted to highlight what the Vikings pay, but that is not public information.  Ask your legislators why they don’t tax Target like they tax us.  If they did Target would have paid $25 billion in state tax, erasing any revenue shortfall immediately.  Bad idea?  Of course.  Target would not be able to survive such taxation.  The real question for legislators is why would you hold for profit companies to a lesser standard and hold not for profit charities conducting philanthropy in their communities to a confiscatory standard?  One is in business to increase shareholder equity and we exist to help meet community/mission needs.

Our income (sales minus prizes) in FY2018 will approach $300 million.  We will get more to the bottom line for missions than in FY2017, but the state, e-tab manufacturer and bars will increase their take more than we do (in both percentage and dollars).  Our missions should not be the bottom rung of the profit ladder.  Without a healthy host all of those depending on the host for their existence will ultimately suffer.  If the golden goose succumbs so will all of those who were dependent on the goose.  We have lost sight of what charitable gaming is supposed to be about, helping the less fortunate, not the more fortunate.  It has morphed into who can get the most out of the goose.     

Republicans are in control of both the House and the Senate.  They blame the Governor for not giving us tax relief, but they have never given the Governor a bill to veto or sign with relief for us.  I totally agree that the Governor has no time for us or what we do, but he signs all kinds of bills that have provisions in them that he does not like.  If the roles were reversed I would call out the Democrats.  Ours is not a partisan issue.  The party in control of the House/Senate cannot blame the party that is not.  We do not have relief because the House and Senate majority currently don’t want us to have it.  It is as simple as that.  Your legislators need to explain to you why they are taking money out of the stadium fund while not giving us any gambling tax relief. 

No charity should every pay more to the state than they have for their community or mission.  Donations exempt, combined receipt rates of 6/12/18/24%.  End of story. 

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