Hennepin County tries again to convert Target Field tax for hospitals and extend Twins lease

Hennepin County leaders face fresh challenges in their push to convert the 0.15% sales tax that paid for Target Field into an ongoing revenue stream for the county’s two safety-net hospitals.

Extending a tax that’s set to expire is typically a tough prospect at the Legislature. A newly divided House and the expected sale of the Twins will certainly complicate the debate about the future of the tax when lawmakers return to the State Capitol on Jan. 15.

County leaders’ proposal to lawmakers is about more than just taxpayer funding for HCMC and North Memorial Health Hospital in Robbinsdale. The plans also include extending the Twins lease through 2059 and keeping subsidies for local libraries and youth activities.

If lawmakers do nothing, the sales tax, which equals about 3 cents on a $20 purchase, will sunset in 2025 after the county’s Target Field debt is paid off.

“I’m an eternal optimist,” said Commissioner Jeffrey Lunde, who co-chairs the County Board intergovernmental relations committee. Last session, efforts to convince lawmakers fell short, and county leaders have been laying the groundwork for a renewed push.

“This time, I think we are better prepared. We have a plan going in,” Lunde said.

The 0.15% sales tax was created in 2006 with the approval of the Legislature to fund the county’s $355 million share of building Target Field. The ballpark opened in 2010 and the Twins are halfway through their initial 30-year lease.

If state lawmakers agree to extend the tax, Target Field would get about $10 million annually for capital projects to continually make improvements. The Twins pay all operating costs and are responsible for routine maintenance.

Members of the Minnesota Ballpark Authority, which oversees operation of Target Field, hosted members of the Legislature over the summer to highlight what they describe as a unique public-private partnership between the team and the county. They say a vibrant stadium is a selling point for the Twins.

David Hough, county administrator, said converting the tax would provide important support for a public amenity as well as help pay for health care for residents who are struggling.

“If we don’t maintain it, who will? We don’t want to ask the state Legislature,” Hough said of the infrastructure in and around Target Field. He added: “Both North Memorial and HCMC need to be viable. They provide critical care to those in need.”

Most of the ongoing money from the converted tax would go to HCMC and North Memorial, which would split about $40 million each year. That money would help offset both hospitals’ growing costs of uncompensated care, for treating patients without insurance who cannot pay.

Additionally, the sales tax revenue would help fund an estimated $1.5 billion inpatient facility HCMC hopes to build on its campus in Minneapolis. Hennepin County owns the hospital’s infrastructure, while a nonprofit public-benefit corporation operates HCMC and other clinics.

A taxpayer subsidy for North Memorial, a nonprofit and the other level-one trauma center in Hennepin County, would make the hospital eligible for higher reimbursement rates from the federal government for treating Medicaid patients. In January, the County Board unexpectedly ended a previous subsidy to the Robbinsdale hospital, which struggled financially in recent years and had to cut some services and staff.

Finally, converting the sales tax would continue about $4 million in annual funding that is split between extended hours for Hennepin County libraries and subsidies for youth activities.

When converting the ballpark tax was first proposed last spring, the legislation got bipartisan support with lawmakers excited by the prospect of extending the Twins lease and supporting local health care needs.

But the plan also faced skepticism and couldn’t muster the support it needed, even with Democrats completely in control of state government, to become law. North Memorial was not included in the initial proposal and some DFLers had reservations about providing $10 million a year to a stadium for a sports team owned by the wealthy Pohlad family.

There were also last-minute questions about the future governance of HCMC after nurses and other union workers demanded the County Board take back control of the hospital. Commissioners have not publicly supported such a move.

This year, the proposal could face different hurdles. Republicans and Democrats will share control of the House and the powerful tax committee that would have to sign off on converting the tax.

Rep. Kristin Robbins, R-Maple Grove, who hopes to continue her role on the House tax committee, noted that the DFL-led Legislature increased Hennepin County sales taxes by 1% in 2023. She agrees the county’s two safety-net hospitals need more dedicated public funding, but wants county leaders to explore other options.

“Residents are asking for tax relief,” Robbins said. “The county needs to reassess its priorities.”