CHICAGO — Minnesota would set aside revenue from a proposed cigarette tax increase and corporate tax changes as a backup, should gambling revenues continue to fall short of the amount needed to make payments on $500 million of state bonds for a new Minnesota Vikings football stadium.

The financing package for the National Football League team's new stadium approved last year relied on increased revenues from an expansion of charitable gambling to repay the state's $350 million share of $500 million in public funding for the project. The expansion was projected to generate more than the $30 million needed annually to repay the bonds but this year has produced just $1.7 million.

The state put off issuing the appropriation-backed bonds until mid-to-late summer as Gov. Mark Dayton's administration found a backup revenue stream. The city of Minneapolis is on the hook for $150 million of the state borrowing and the team will cover the remaining costs of the $975 million stadium.

Revenue Commissioner Myron Frans on Thursday presented the backup plan to a House-Senate tax conference committee that is working out a final tax bill before the Legislature's scheduled adjournment Monday.  "We believe it's reliable, it's consistent and we know over time it'll be there," Frans said.

Calling the revenue streams "new," Frans defended the decision to tap a portion of the money expected from already-proposed tax changes against Republicans, who argued that the backstop plan would divert general state funds. Dayton is a member of the Democrat-Farmer-Labor Party that controls the Legislature.

Under the backstop plan, the state would tap a so-called stocking fee paid by wholesalers and retailers of cigarettes. That fee is expected to generate $24.5 million because of the proposed increase in the per-pack tax. The first $12 million would go to replenish a stadium reserve and cover any other near-term shortfalls.

Funds generated from a change in the reporting system for some corporate sales, which are expected to generate $20 million annually, would provide a long-term backstop should gambling revenues continue to fall short.

The Minnesota Sports Facilities Authority this week unveiled the stadium design for the 65,000-seat stadium, to be built adjacent to the 30-year-old Hubert H. Humphrey Metrodome.

The stadium backup resolves one issue as lawmakers work over the next few days to complete tax and spending bills that make up a new two-year budget before a scheduled adjournment.

Dayton and lawmakers late Thursday settled differences over tax proposals to generate $2 billion in new revenue in the proposed $38 billion, two-year budget. The new money would close a $627 million deficit and pay for increased spending on schools, property tax relief, and economic development.

Some lawmakers had been pushing an income tax surcharge on top of a proposed hike in the income tax rate for top earners and an expansion of sales taxes. The surcharge was dropped, as was a sales tax on clothing, but taxes will be extended to some business services and goods. Cigarette taxes will rise by $1.60 per pack.

A vote also could come as soon as Friday on a proposed $800 million capital budget, referred to locally as the "bonding bill." Some Republican support, however, is needed to reach the vote threshold required to authorize new general obligation borrowing.

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