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Local Cities Again Asked To Share In Pain Of Casino Business Decline

Posted On March 30, 2017

By Mike Perleberg

(Indianapolis, Ind.) – House Bill 1350 had at one point been stripped of a provision that could affect the amount of money the state gives to casino host communities such as Lawrenceburg and Rising Sun.

But, the language that has worried local officials has slipped back into the bill.

“Was it Yogi Berra who said ‘It ain’t over ’til it’s over?'” State Senator Chip Perfect (R-Lawrenceburg) said Wednesday.

House Bill 1350 originally proposed a reduction in the $48 million in annual hold harmless funding the state pays to host communities. The hold harmless agreement dates to a 2002 promise by the state guaranteeing at least that amount for casino communities. Perfect said the money has proven to be valuable for those cities, counties, and other entities that receive a share.

State Representative Randy Frye (R-Greensburg) and others were successful in their efforts to get the reduction removed from the legislation before it passed the House last month. The issue was to be assigned to a legislative study committee.

However, the provision was amended back into the bill when it passed the Senate Appropriations Committee on March 23 by a 12-1 vote.

HB 1350 will receive its second hearing on the Senate floor Thursday. Perfect, whose Senate district includes Hollywood Casino Lawrenceburg and Rising Star Casino in Rising Sun, plans to introduce a new amendment that would delay the reduction in hold harmless funding.

“I’m cautiously optimistic that will make it through the Senate,” he said.

Indiana State Senator Chip Perfect (R-Lawrenceburg). Photo provided.

Perfect warns much could still change. Assuming the bill passes the full Senate, it would have to go to a conference committee so that differences between the Senate and House versions of the bill could be ironed out. Then, Governor Eric Holcomb could potentially veto the bill.

The ideas driving the legislation is making Indiana casinos more competitive and ending a decline in tax revenues. Due to an economic downtown, increasing competition from surrounding states, and fewer people gambling their money, Indiana’s casino tax revenue has fallen by nearly 30 percent between 2007 and 2016.

There are many interests tugging various directions on the 2017 legislative session’s biggest gaming bill: casinos, host communities, non-host communities, and the State of Indiana.

In its current form, HB 1350 would also eliminate a $3 per person admissions tax and replace it with a maximum 3.5 percent supplemental tax on a casino’s adjusted gross revenue. Casinos have supported the change, saying the current setup doesn’t incentivize them to add attractions outside their gaming areas and to encourage gamblers to come-and-go.

“It’s generally a wash for Dearborn County, but for some reason there was a cap put on that percentage and it was pretty detrimental to Ohio County and some of the other boats,” Perfect said, adding he is optimistic that the cap can be removed as the bill evolves.

Another provision has stuck with the bill since its introduction. The “add-back tax” language would allow casinos to deduct from their state income taxes the adjusted gross receipts – or winnings – which they have already paid taxes on. Currently, casinos are being double taxed on that money. The bill would phase-in a reduction in the “add-back tax”.

“It’s good for the operators and they need our help and it’s not really fair. But, the question is what was that going to impact? Generally speaking, a proposed reduction in the hold harmless dollars,” said Perfect.

With the hold harmless reduction, casino host communities are being asked to shoulder their share of the decade-long decline of gaming revenues.

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