DES MOINES - In the face of stiff opposition, Gov. Terry Branstad has ratcheted down proposed casino tax increase in an effort to get it passed this session.
But casino interests and their supporters in the Legislature show no sign of backing down.
"There is no compromise on this," Iowa Gaming Association President
The governor's original proposal would have raised the top gaming tax rate to 36 percent, up from 22 percent for riverboat casinos and from 24 percent for racetrack casinos. He estimates the increase will bring in $190 million in additional revenue to the state, which would help pay for corporate and commercial property tax rate cuts.
His new proposal would create a graduated tax structure for casinos, similar to how the casino tax system works in Illinois.
"I didn't say anything about ‘deal,' " Branstad said in defending his proposal at a Statehouse news conference. "I want to reduce the corporate income tax, and I saw a way we could help finance that by having the casinos pay a little more, and this would still be less than they are paying in a lot of the other states."
Under the governor's proposal, a casino's first $25 million would be taxed at 24 percent; revenue of $50 million or more would be taxed at 30 percent and revenue of $75 million or more would hit the top rate of 36 percent.
Branstad spokesman Tim Albrecht said the top rate "primarily impacts those casinos that had already agreed to this same 36 percent rate last decade, when they were able to put slot machines in the horse tracks."
So far, Branstad hasn't committed the proposal to paper, but he's shared it with key lawmakers.
Still, Rep. Tom Sands, R-Wapello, who chairs the House Ways and Means committee, said it's unlikely the governor's proposal will gain traction this session.
"I don't see this going forward now," Sands said. "We have a lot of big tax policy issues to deal with still, including property tax relief. (The gaming tax) just isn't on the front burner."
Meanwhile, Branstad said he's confident that holding off on online gaming for at least a year was the right thing to do even though Washington, D.C., will likely become the first place in the nation to allow it.
"As I said at that time, this thing requires additional study. I think they made the right decision," Branstad said. "You've got to be very careful ... We need to have strict regulations, and we need to protect the integrity of the state."
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