Gov. Bill Owens wants $100 million more for additional road projects in a year when state government is slicing itself up due to declining revenues. Well, some money is there, governor, if you really want it, in casino taxes.
Casinos may be the only industry with growing profits during Colorado's recession. And the Gaming Commission is the only state entity that can levy revenue taxes on the casino industry. The money goes into the general fund, as well as for casino town and county related projects.
Under the state constitution, the gaming commission can levy a tax up to 40 percent of adjusted gross revenues, but they never have and likely never will.
In 1999, the gaming commission on a 4 to 1 vote slashed casino taxes. They justified the cut claiming higher revenues from existing casino tax rates would go to the state general fund at a time when revenue funds were producing a surplus. The result? Casino taxes collected in 2000 declined about 20 percent from what they would have raised before the tax slash.
According to the state auditor's report, "the commission reviewed the Colorado Legislative Council's Economic and Revenue Forecasts for 1999-2004 and decided to reduce the tax rates." In hindsight we know how terribly wrong those revenue forecasts were.
Now we are scrounging for money. The gaming commission could raise casino taxes on a temporary basis, say for two years. The heaviest increase could be placed on casinos that pull in $15 million or more yearly in adjusted gross revenues and account for more than 90 percent of casino taxes.
The 1999 tax slash affected the first $15 million in adjusted gross revenues of all casinos, big or small. And since many casinos are owned by the same corporation, each casino got a tax break that wouldn't be possible if multi-casinos were taxed as a single entity.
Of course the TABOR amendment to the constitution requires any tax hike be approved by voters. If the issue has to be put on the ballot, it could be done this November after the gaming commission passes a resolution asking for voter approval and delivers it to the secretary of state.
Any college freshman with a computer could figure out how high casino taxes need to go to produce $50 million for the governor's road projects over the next two years. And guv, $50 million is a lot better than zero.
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While the gaming commission bowed to the casino industry on taxes, they stood firm against lowering the criteria on who can run the casino towns and the casino counties.
Let's face it. Cripple Creek, Black Hawk and Central City are company towns. There is a thin veneer of independence based on the original statute which forbade casino employees from running for offices, which offices could in turn affect how casinos were treated by the towns and counties.
This year, Sen. Andrew McElhany (R-Colo. Springs) and Rep. Lola Spradley (R-Beulah) introduced SB 24. It would have allowed a number of employees as well as some "minor" casino stockholders to seek election to municipal and county commission positions. The industry rightly claims casino moneys are keeping the towns alive, and as candidate Ronald Reagan once said: "I paid for this microphone and I'll decide who uses it."
Sen. McElhany's bill was doomed despite heavy pressure from the casino industry. It died after having passed the deadline for bills moving out of committee. The state gaming commission came out unanimously against the bill stating:
"The appearance of a conflict of interest could be as much, if not more damaging to the public confidence as an actual conflict.
"In...1991, there was extensive debate on the issue of public confidence versus the size of the eligible pool for municipal elections. Public confidence was the overriding concern of the legislature then, and of this commission now. It is vital to the success of the program. The current law has not hampered local elections over the last ten years."
(Jerry Kopel served 22 years in the Colorado legislature.)
Copyright 2015 Jerry Kopel & David Kopel