Counties call gambling tax changes a bad roll of the dice
Change could cost Switz. County $2 M; Jefferson County $150K
Saturday, February 16, 2013 4:00 AM
A bill proposed in the Indiana Senate aims to combat gaming competition from bordering states by providing tax reductions to casinos and increasing the number of live-table games.
"If the bill comes to pass, oh, I'd hate to even think about it. Things would be a whole lot different. A whole lot different."
But many community officials across the state think they're being dealt a bad hand.
In fact, they say the proposed changes to the casino tax formula could lose Switzerland County up to $2 million in revenue and Jefferson County about $150,000 in revenue each year.
Senate Bill 528, which passed the Appropriations Committee on Thursday and will now move on to a full vote on the Senate floor, allows riverboats to move inland to adjacent property and authorizes live-dealer table games such as blackjack, roulette, craps and poker at racinos such as Anderson's Hoosier Park and Shelbyville's Indiana Grand.
The most notable point of contention for Indiana counties, however, is the proposed replacement of admissions tax with a supplemental wagering tax.
The change would cut millions of dollars in casino taxes, and reduce by about $40 million a year the amount that counties with riverboat casinos would receive in tax revenue.
"If the bill comes to pass, oh, I'd hate to even think about it," Switzerland County Commissioner Mark Loride said of loss in revenue. "Things would be a whole lot different. A whole lot different."
The bill effectively reverses the tax cap implemented a decade ago. The cap was established during a time when casinos were thriving, but the recent economic downturn and loss in state gambling revenue sent some legislators looking for a new tax structure.
If passed into law, the new direction would save the state $24 million in 2015 and another $48 million every year after, while communities would lose half of their supplemental gaming revenue the first year and all of it the following year.
Switzerland County currently receives an annual cap of about $9.9 million from wagering and admissions taxes from Belterra Casino & Resort revenue - $4.8 million of which comes from admissions tax, according to the auditor's office.
That tax is divided between Switzerland, Jefferson, Ripley and Crawford counties.
Switzerland County officials say a conservative projection is that the switch would knock out about 40 percent or more of its total annual revenue.
"It would be absolutely devastating for us," said Commissioner John Haskell.
Since Belterra Casino & Resort opened in 2000, Switzerland County has relied heavily on the tax revenue for infrastructure, tourism and agency funding.
But, in keeping its end of the bargain, Switzerland County also has invested that revenue into necessary means to support the resort and increase visitors, Lohide said.
Last year, the county used more than $1 million in casino revenue to repair and resurface its roadways, many of which are commonly used by casino guests.
On top of that, when the casino came to Florence, all county emergency response agencies had to be restructured and expanded to provide ample service to the resort, which is by far the biggest building in Switzerland County, Lohide said.
"Bottom line, people are saying, 'Hey, we'd like to get some of that money, but we've invested a lot,'" he said.
While commissioners Haskell and Lohride plan to lobby against the bill, it's looming effect has put them in an immediate tight spot.
If the revenue formula changes, many agencies in the county likely would see a substantial decrease in funding, Haskell said. Now, he said the county can only operate with caution and be "very conservative" with its funding.
Jefferson County uses casino revenue to fund historic preservation projects, economic development, road paving, sheriff's department pensions and veteran affairs. A portion of the sheriff's department pensions and veterans affairs funding is directly tied to the casino admissions tax.
Jon Bond, president of the Switzerland County Economic Development Corp, said the deal also would create a hefty cut in tourism, which also is funded by the admissions tax.
Switzerland County takes in about $240,000 in tourism funds from casino revenue each year. That stands to be cut by about $95,000, Bond said.
"It's pretty much robbing us, with a little of garnish around it," he said of the bill.
While the new bill would give a tax incentive of $600,000 to $700,000 to each casino, Bond said the idea that tax breaks would help resorts compete with casinos in bordering states is fundamentally flawed.
He said Pinnacle Entertainment, which owns Belterra, also owns River Downs Racetrack in Cincinnati - less than 60 miles away. Likewise, Penn National Gaming, the owner of Hollywood Casino in Lawrenceburg, also owns two locations in Ohio - Columbus and Toledo - and three in Illinois.
"So, we're essentially giving casinos more money to go and compete with themselves in another state," he said.
House Speaker Brian Bosma said Friday he thinks allowing more in-land casinos will have a tough time being approved in the House, although he believes some tax changes might be made.
Bond said he expects a Senate vote to come as soon as next week. Until then, he said local officials are doing what they can to stop the bill's advancement.
"They're going to move this pretty quick," he said "Because the longer people have to read, the less they're going to like it."