The Minnesota Department of Revenue said today that it expects to collect about $30.5 million in "floor stock" new cigarette taxes. That's the stamp charge on all the cigarettes sellers had on hand before a $1.60 per pack tax hike took effect on July 1.
First the good news: there's about $26.5 million there to top off the state's reserve fund for the stadium debt. That's the insurance fund that the state wrote off last year. It was supposed to serve as a year of backup debt service for stadium bonds if the electronic pulltabs didn't pan out. They haven't so far. Now, a fund is in place to assure bondholders that there's about a year's reserve, giving the Legislature time to go back in and tinker further if need be.
The state missed on the one-time tobacco tax estimate, too. But not by much. Minnesota officials thought it would get about $32.4 million, with most of that earmarked for the reserve fund.
Here's how revenue commissioner Myron Frans described the fund's amount vs. the projection:
"Ninety four percent. It's very close, and it's based on our original estimate some months ago, and we think that this number will continue to climb over the next month as we collect data. The reporting and payment date is Sept. 4, and we will see monies coming in now through September. It could be right on."
It's a sharp contrast to the state's initial plan, in which an expansion of charitable gambling raised $1.488 billion a year. It's is now looking more like the expansion will raise $19 million a year.
That miss prompted the state to shift gears this spring. It's counting instead on $20 million a year from a corporate "unitary tax" on sales from out-0f-state companies that don't pay corporate taxes now.
"By the way, this is the only cigarette tax that will be used for the stadium financing" Frans said. "No other cigarette tax revenue will be used for stadium financing. It's a one-time shot."
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