Gaming keeps other taxes low
Pub Date: 1/1/2003
"Don't tax me'; don't tax thee. Tax the man behind the tree."
The author of that quotation is unknown, just like the man behind the tree.
"Any new or increased taxes that are going to pass are the ones that "I don't have to pay," said Dennis Burr, a former official for the Montana Department of Revenue and retired president of the Montana Taxpayers Association.
As a political reality, he added, "governments aren't going to impose a tax that everybody pays."
Thus, if state were to lose the $50.1 million paid in gaming taxes in fiscal year 2004, Burr said the only alternatives to replace the money would be a state-wide sales tax or an increase in property taxes at the local level.
Aside from imposing a new tax or increasing existing levies, the other option would be to cut services. Taxes on gaming revenues go into the state general fund, then approximately two-thirds are reimbursed to local governments and are spent on parks and recreation, police and fire protection and more. These taxes comprise 10-20 percent of the general fund budgets of most local governments.
"There is no escaping it (increased or new taxes)," without cutting services, Burr said. "It's really the only alternative."
In the absence of a sales tax, he added, "There isn't any way to replace that money without increasing property taxes."
Selective sales or local option taxes probably would not be an alternative either. The only local option tax that has passed in recent years was the "resort tax" authorized by the 1985 Legislature.
Burr and others have consistently pointed out that the tax on video gaming machines, besides contributing heavily to local general fund budgets, is a relatively painless way of raising money because it is a voluntary tax that is paid only by those who play the machines.
Burr said people who oppose a sales tax would also rebut any proposed general local option levies on philosophical grounds, and sales tax supporters would repudiate that idea because they consider it a piecemeal approach to tax reform.
While voters historically have voted for measures to decrease their taxes, they seldom pass proposals to increase them.
"Creative minds can think up a new tax," Burr said. "But going to the legislature and getting it passed over the objections of the people who are going to pay it is a different story. It would be hard to pass a tax that applies to everyone."
Source: Gaming Player Magazine, published summer of 2002 by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.