Veterans from across Minnesota told lawmakers Wednesday the state needs three more homes to care for aging veterans — and suggested they use the Vikings stadium reserve to pay for them.

The reserve, which is funded by taxes on corporations, pull­tabs and other charitable gambling, provides a cushion in case the state is unable to pay stadium debt. State representatives proposed using $26 million in reserves to pay for the veterans housing.

Gov. Mark Dayton said he supports veterans homes but believes the Legislature should not "raid" the stadium reserves, which are projected to reach $39 million by the end of this year and nearly $58 million in 2019.

"You're never going to know what's needed," Dayton said. "And to have a strong fiscal cushion in an operation of that size just makes sense. To just pull it away … is less than credible."

Meanwhile, charities have been dealing with their tax burden from the stadium, said Al Lund with Allied Charities of Minnesota, which represents nonprofits with gaming licenses. Lund, a veteran, said it's hard to argue with providing homes for them — but said charities are footing the bill for stadium debt and should get some relief from excess reserves.

If the tax money is coming in strong, Vikings spokesman Lester Bagley suggested refinancing stadium debt to save taxpayer dollars. But he said there needs to be a larger discussion.

"What seems to be occurring is by tapping the stadium fund they are reopening the stadium finance deal, which is something that was painstakingly negotiated," Bagley said. He warned the state must be careful and protect the stadium in case of an economic downturn or change in gaming legislation.

But veterans called for action, saying they have been pushing for the housing for more than a decade. There are parts of Minnesota, particularly in the southeast and northwest corners of the state, where the nearest veterans home is hours away, veteran Joe Vene said.

Plan would add 216 beds

There are currently five veterans homes in the state, housing 824 people. The three new homes would be located in Preston, Bemidji and Montevideo, creating an additional 216 units.

There are waiting lists for the five existing homes, said Scotty Allison, the Beltrami County veterans service officer. While the overall population of veterans in the state is declining, Allison said veterans homes will soon see a wave of Vietnam-era veterans with complicated health issues. The homes provide specialized care, he said.

The three buildings would cost $180 million, according to House Republican staff estimates. If the state and local governments contribute to the projects, the federal government could pay 65 percent of the cost, legislators said. They said it could take five years to secure federal funding and start construction.

Dayton expressed doubts Wednesday that the federal government would make the contribution. In addition to construction costs, he said each of the three homes would cost $10 million a year to operate. He said legislators also need to plan for those expenses.

"If we don't have a sound proposal, then we're just doing it for show, and I think the veterans deserve more than that, deserve better than that," Dayton said.

In addition to the $26 million for veterans housing, House members hoping to win Dayton's backing also suggested using $4 million from the stadium reserves to establish a state office that the DFL governor has proposed to investigate allegations of harassment, misconduct and discrimination in state government.

Use bonding instead?

"We've tried to fund this several times in the Legislature and the governor has been reluctant to support it," Rep. Sarah Anderson, R-Plymouth, said of the veterans homes. "We're hoping this is a method that can get his support."

Management and Budget Commissioner Myron Frans told a House panel that Dayton would "entertain" the use of bonding, rather than cash from the reserve, to pay for the housing projects. But the state pays more than $1 billion annually in interest on bond debt, and legislators said they do not want to add to that cost when there is revenue available.

The state needs to assess how much money should be in the reserve, Frans said. Minnesota Sports Facilities Authority, which manages operations of U.S. Bank Stadium, referred to Frans' testimony and did not comment further.

Staff writer J. Patrick Coolican contributed to this report. Jessie Van Berkel • 651-925-5044