Gov. Jennifer Granholm endorsed a higher tax on Detroit casinos Tuesday, signing a bill that critics say has already cost the gaming industry jobs.
The legislation raises the state wagering tax on Detroit casinos by one-third, from 18 percent to 24 percent. The tax is double the 12 percent tax that Mississippi assesses casinos.
Mississippi has the third lowest tax rate for casinos in the country, behind Nevada and New Jersey.
Andy Bourland, executive director of the Mississippi Gaming Association, said the higher tax in Michigan will cut into the casinos' other budgets, including marketing, which would bring new visitors to that state.
"Recent tax increases on the gaming industry in many of the jurisdictions, such as Illinois two years ago and most recently Michigan, cause great alarm among industry executives," Bourland said. "We have already seen in those states where taxes have been raised 20 percent, 30 percent, even as high as 50 percent, that the tax increases don't work.
"They do not generate the revenues that some elected officials think will occur. It costs jobs. It costs operating hours. It forces businesses to reconsider any expansion or capital investment opportunity."
Granholm's office has said the bill is a crucial step toward solving state government's budget problems.
Lawmakers say the tax increase should bring in an additional $50 million for the fiscal year that begins Oct. 1. The higher tax is part of an effort to erase a $1 billion deficit in next year's spending plan.
Detroit also would get additional revenue from the higher tax.
Greektown Casino laid off 148 workers on Monday and plans to leave 34 open jobs unfilled. The privately held company employs about 2,400 workers and had revenue of about $325 million last year.
"This has already devastated a couple hundred families in metro Detroit, and there's probably more fallout to come," Roger Martin, a Detroit casino spokesman, said of the higher tax.
Mississippi's low tax rate is one reason so many gambling jobs have been created here, Bourland said.
"We cannot stress enough how well Mississippi did when the Legislature established the tax rates and the regulatory climate that we exist under today," he said.
http://www.sunherald.com/mld/sunherald/business/9437251.htm
The legislation raises the state wagering tax on Detroit casinos by one-third, from 18 percent to 24 percent. The tax is double the 12 percent tax that Mississippi assesses casinos.
Mississippi has the third lowest tax rate for casinos in the country, behind Nevada and New Jersey.
Andy Bourland, executive director of the Mississippi Gaming Association, said the higher tax in Michigan will cut into the casinos' other budgets, including marketing, which would bring new visitors to that state.
"Recent tax increases on the gaming industry in many of the jurisdictions, such as Illinois two years ago and most recently Michigan, cause great alarm among industry executives," Bourland said. "We have already seen in those states where taxes have been raised 20 percent, 30 percent, even as high as 50 percent, that the tax increases don't work.
"They do not generate the revenues that some elected officials think will occur. It costs jobs. It costs operating hours. It forces businesses to reconsider any expansion or capital investment opportunity."
Granholm's office has said the bill is a crucial step toward solving state government's budget problems.
Lawmakers say the tax increase should bring in an additional $50 million for the fiscal year that begins Oct. 1. The higher tax is part of an effort to erase a $1 billion deficit in next year's spending plan.
Detroit also would get additional revenue from the higher tax.
Greektown Casino laid off 148 workers on Monday and plans to leave 34 open jobs unfilled. The privately held company employs about 2,400 workers and had revenue of about $325 million last year.
"This has already devastated a couple hundred families in metro Detroit, and there's probably more fallout to come," Roger Martin, a Detroit casino spokesman, said of the higher tax.
Mississippi's low tax rate is one reason so many gambling jobs have been created here, Bourland said.
"We cannot stress enough how well Mississippi did when the Legislature established the tax rates and the regulatory climate that we exist under today," he said.
http://www.sunherald.com/mld/sunherald/business/9437251.htm
