Another Fine RNC Whine - Not Enough Tax Dollars for Their Convention

RNC Hosts Disappointed With Lack Of State Help

MINNEAPOLIS (AP) ― The local committee hosting the Republican National Convention says it's disappointed the state didn't follow through on a promised financial guarantee.

In a letter obtained by The Associated Press, Jeff Larson, chief executive of the Minneapolis Saint Paul 2008 Host Committee, told Gov. Tim Pawlenty and legislative leaders the state's failure to offer financial backing in the event of a cash flow shortage "creates a serious risk of breach of our agreement with the RNC."

Larson asked state and local leaders to find an alternative way to fulfill the state's commitment. In a phone interview on Friday, he didn't offer suggestions but said he hoped "creative minds can come together."

As the host committee was trying to lure either the Democratic and Republican National Conventions to St. Paul, it negotiated a package that included a state commitment to back the committee's fundraising with a letter of credit that would be executed if there's a cash flow shortage.

"The commitment of this guarantee by the State was a critical element in the Republican National Committee's decision to award the 2008 Convention to Minneapolis and Saint Paul," Larson wrote in the letter, dated May 21. The convention will be held at the Xcel Energy Center in St. Paul from Sept. 1-4.

The Legislature didn't pass a bill seeking a $39 million letter of credit in 2007. And in the 2008 session that ended Sunday, a smaller amount of $14 million wasn't approved, either.

Pawlenty spokesman Brian McClung said in an e-mail Friday that the governor had "repeatedly and directly" asked the Legislature to secure financial backing for the committee.

"Those requests were rejected by DFL legislative leaders, including when the request was made during the final negotiations to close up the budget," McClung wrote. "This was particularly frustrating because the Department of Finance said that the transaction would be revenue neutral and would not impact the state budget."

Through a spokesman, House Speaker Margaret Anderson Kelliher, a Minneapolis Democrat, said: "The line of credit for the Republican National Convention was included in the House tax bill. In the end, the House, Senate and Governor's office could not reach an agreement on this issue."

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said the line of credit was included in a tax bill that Pawlenty vetoed during the 2007 legislative session. "We didn't see any reason to do it again," Pogemiller said.

The host committee is obligated to raise $39 million for the convention; but the committee has an end goal of $58 million to cover operational costs. Larson said fundraising is on track, and the committee anticipates it will raise 80 percent of its $39 million contractual commitment by June 15.

Larson said the state's inaction isn't likely to have financial consequences for the convention; the last two Republican National Conventions have had letters of credit that weren't drawn upon.

But Larson takes issue with the principle behind the commitment. In his letter, he wrote: "Minnesotans are well known for honoring their commitments. It gives us grave cause for concern when the five highest ranking public officials in our State are unable to make good on a commitment of this importance and significance."

The convention is expected to bring $150 million to $160 million in economic activity to the area and create 2,800 jobs, generating over $100 million in wages, Larson said.

Matt Burns, convention spokesman, said in an e-mail that the convention will be successful in September, but it's unfortunate that the state didn't meet its obligation.