Liquor taxes are high in Minnesota
On top of tight regulation, Minnesota also taxes liquor heavily compared to most states.
In March, the city of Duluth was nominated for Center of the American Experiment’s Golden Turkey Award for its ongoing financial support — and bailouts — of the Spirit Mountain ski hill. The taxpayer subsidy for the ski hill begins each year with a $1.1 million subsidy from tourism-related sales tax revenues. The hill has been losing money every year because — wait for it — fewer people are coming to ski. After a new chalet was built in 2013, the losses really piled up and led to additional bailouts of $235,000 in 2019 and $300,000 this January.
Spirit Mountain came in last place in the voting this spring, but a proposal by Mayor Emily Larson to double down on failure with another $24 million could make this boondoggle the first two-time nominee in Golden Turkey history (“Duluth mayor calls for $24 million investment at Spirit Mountain,” May 6).
The city of Duluth receives $30 million a year in local government aid, or LGA, from the state, making up 32% of its general-fund budget. Based on population and historical political power, Duluth is treated differently than other cities in the complicated (and antiquated) LGA formula. Duluth takes in $22 million in property taxes each year, meaning taxpayers from across the state pay more for Duluth services than local homeowners and businesses.
In 2021, the City Council made protecting LGA its No. 1 legislative priority for the city. A News Tribune editorial in February gushed that LGA is needed to pay for “core services like police, fire, libraries, and planning” (Our View: “Local government aid particularly important this COVID year,” Feb. 9).
And ski hills.
Mayor Larson announced last week an ambitious $24 million plan to revitalize Spirit Mountain, saying, “We cannot get out of this, so we are going to get into it.” Brilliant.
Larson claimed the city can’t sell the facility and get out of the ski hill business because of “federal land covenants.” That’s absurd. If the city wanted to, it could pursue state or federal legislation to release the land from these ancient covenants.
According to the News Tribune, revitalization plans for Spirit Mountain include renewing skiing infrastructure, completing cross-country skiing and mountain bike trail systems, adding a high-ropes course to its summer adventure park, and renewing the deteriorating Skyline Chalet and campground at the top of the hill.
Larson plans to ask the Legislature for $12 million in state bonding for the undertaking. So taxpayers in the Twin Cities suburbs who already subsidize Duluth with LGA would now also be asked to kick in half the funding for this boondoggle.
The great economic concept of “if we build it, they will come” might work in the movies, but not with government subsidies. No bank would consider loaning a ski hill with Spirit Mountain’s track record any money. Minnesota taxpayers shouldn’t either. Duluth’s LGA allotment should be reduced for every dollar the city spends on this Golden Turkey nominee.
Is this heaven, Mayor Larson? No, it’s Duluth.
This piece originally appeared in the Duluth News Tribune, May 12, 2021