Elation earlier this week that the proposed Bemidji Regional Events Center was included in the Minnesota Senate's capital bonding bill turned sour Friday when it became apparent Gov. Tim Pawlenty won't support either the bonding or a companion city sales tax extension.
"The governor's apparently taking the position ... in calling these things hockey rinks, and I think that will be the strategy statewide," Sen. Mary Olson, DFL-Bemidji, said Friday as she was en route from St. Paul to Bemidji.
The Bemidji project was included in the Senate Capital Investment Committee's $965 million state building projects bonding bill, fully funded at $22 million. The $50 million regional events center, to be located on the Lake Bemidji southeast shore, would serve as an events and convention center, as well as provide a 4,000-seat area for Bemidji State University's NCAA Division I hockey program, which would serve as an anchor tenant.
Republican Pawlenty pledged a rough ride for Democrats in the wake of the DFL-controlled Legislature overriding his veto of a $6.6 billion transportation funding package that included the first gas tax hike in 20 years. And six House Republicans who bolted to support the override were punished by having their GOP leadership positions and committee seniority stripped.
Then Thursday, the DFL Senate ousted Lt. Gov. Carol Molnau from her post as transportation commissioner and state officials announced a $935 million state budget shortfall that needs to be fixed before mid 2009.
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Pawlenty, however, said he would not allow tax increases to solve the deficit, and said he wanted a smaller bonding bill of $825 million stripped of non-essential projects -- such as hockey arenas.
He told reporters Thursday that the slimmer bill will mean hockey arenas such as in Bemidji and Crookston, which seeks $10 million, will not be possible. But he would continue to support $40 million for expansion of the Duluth Entertainment and Convention Center, the hockey arena for the University of Minnesota-Duluth.
But of Bemidji and Crookston, "they can wait," Pawlenty said.
"That's the strategy statewide, I think, that these things are going to be called unnecessary expenditures that the Democrats are pushing," Olson said.
And that carries through to local option sales tax requests, Olson said, as she found out earlier Friday from Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, whose staff has been in contact with Pawlenty's staff.
It is Bakk's plan to do two omnibus tax bills this session, he told Bemidji business people a week ago in a visit to Bemidji. The first early-session bill would contain the non-controversial items from last year's tax bill that Pawlenty vetoed because of a provision to account for inflation in budget forecasting. A late-session bill would contain the more debatable items, if any.
The first bill has in it Bemidji's request to extend its half-cent sales tax for 30 years after it has raised $9.8 million for parks and trails improvements, its original purpose. Funds from that would be the city's portion of the $50 million regional events center construction plus land acquisition costs of $14.5 million.
"The governor wants those things out," Olson said she learned in a meeting with Bakk. "He wants them out of the bill, because they're new taxes."
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The tax is considered a local tax, not a state tax, and Bemidji voters authorized that use of the tax in a referendum vote in November 2006.
"Sen. Bakk said he's not taking them out as of my last conversation with him (Friday) morning," Olson said. In a double whammy, the governor apparently will call "hockey rinks" non-essential and a sales tax boost to pay for them as tax increases.
"Of course, at the same time he's going to fund the DECC 100 percent," she said. "The DECC is not a make or break thing as the Bemidji project is."
She referred to the future of BSU's Division I program, as shifting conferences may find BSU without a major schedule, and the inadequacies of the current John Glas Fieldhouse aren't conducive to a self-sustaining program. It is hoped that a new arena will allow BSU to join the prestigious Western Collegiate Hockey Association, which currently has a moratorium on new members.
The WCHA, however, has agreed to regularly schedule BSU with its members, such as UMD and North Dakota. Not being able to compete in a WCHA-capable arena by 2010 could spell the end of hockey at BSU, supporters fear.
"Not only is it important that we've got to get this message through to the governor and try without making him any more angry than he already appears to be, to respectfully urge him to reconsider," the Bemidji Democrat said, "but this isn't about a hockey rink, this is about economic development for our community.
"This is about our community's best opportunity to weather the recession we're expecting by putting a lot more people to work and bring a lot of people into the community," Olson added.
Now it's a tax increase instead of an economic development opportunity, Olson said of Pawlenty, who said the reverse in support of the project two years ago when he included $3 million in planning and design funds in his bonding proposal.
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"He apparently knew it then, but he doesn't seem to know it now," Olson said.
"I hope we can convince the governor to reconsider, because this is a project that our community has spent an enormous amount of time over the last couple of years putting together -- with encouragement from the governor -- and for him to pull the plug on the project at this point would really be hard to understand," she said.
Olson said she will urge city officials and their coordinator, Anne Sand, to gather information about the economic development factor the events center will provide, plus letters of support from all local development projects the center would influence.
It would include opinions from pending developers, such as Pinnacle outlet mall, Menard's, potential developers downtown and that now vacant storefronts could be filled, she said. "We really need to be making as strong a showing as possible that this events center is going to be the economic driver and that people looking at development care about what happens with the convention center."
Asked about the potential of overriding a gubernatorial veto, Olson said the tax bill would be much more difficult to override than the transportation bill. And the governor can use his line-item veto on the bonding bill.
"We certainly can't count on that," she said, adding that the House Republicans who were punished once on the transportation override may not stray again.
