Third quarter VGM taxes outpace last year
Pub Date: 7/1/2006
Gaming tax collections for the third quarter of Fiscal Year (FY) 2006 (Jan. 1-March 31) moved ahead of the same quarter last year by $1.2 million and were up $647,490 from the previous quarter.
Gaming business spokesman attribute the gain to a number of factors, but primarily to a robust state economy that has consumers feeling confident and increasing their recreation spending as disposable incomes expand.
A new generation of equipment from all of Montana's machine suppliers is also substantially improved over previous models, offering more entertainment "bang for the buck" with improved graphics, animation, audio, game play and bonus game features.
Rich Miller, executive director of the Gaming industry Association of Montana, agreed that the steady tax collection increases up 7.3 percent year-to-date and averaging 5.49 percent over the last 10 years is also an indication that the state's 15 percent tax on gross gaming revenues is apparently the right level, allowing for increased investment in the businesses and equipment while generating increasing revenues for state and local government coffers.
Further, Miller said, the healthy growth in tax collections confirms that stable taxation, regulation and operating environment will allow and encourage business growth in any sector.
"That scenario is a win/win/win for government, citizen taxpayers and licensed businesses," he said. "It appears to be working well."
Under a complex revenue sharing formula, gaming taxes are paid into the state's general fund, then approximately two-thirds are redistributed directly back to county and municipal governments in about the same proportion as they were paid.
Mark Staples, attorney and government affairs counsel for the Montana Tavern Association, said, Gaming is an established component of Montana s economy. That economy in general is currently thriving and gaming reflects that'; a rising tide lifts all boats. He added, And where gaming is flat-lining, so is that area s local economy'; the two are inextricably tied. Which emphasizes that we all have a stake in economic development in our state and local areas.
Tax collections in the third quarter of FY 2005 were $13,406,016 while reaching $14,630,273 this year. Since 1990, the state has received over $566 million in tax revenue paid by gaming businesses.
Improvement was seen generally across the board with the exceptions in six rural counties with small populations. These counties may only have one or a couple of licensees and just a handful of machines, so quarter-to-quarter volatility is the norm.
Of the seven largest counties, four did not perform up to the state average. Of the three that performed above the average, Yellowstone and Flathead were led by Gallatin County, all of which are among the fastest growing areas of the state. Of the underachievers, Butte Silver-Bow was the most lackluster with growth less than 1 percent above last fiscal year.
Billings, the state's largest city and known for an aggressive and highly competitive business environment, easily set the pace with an FY '06 third quarter tax increase of $248,317.
Other major cities showing tax increases were: Butte-Silver Bow - $6,462'; Great Falls - $88,169'; Missoula - $51,590'; Helena - $50,383'; Bozeman - $73,377'; Belgrade - $68,918 and Kalispell - $62,798.
Mid-size cities reporting more taxes paid were: Laurel - $6,276'; Lewistown - $32,146'; Columbia Falls - $15,398'; Whitefish - $11,690'; Red Lodge - $10,690'; Havre - $18,375'; Hamilton - $33,704'; Miles City - $28,588'; Polson - $9,420'; Glendive - $26,750'; Sidney - $27,649'; Anaconda-Deer Lodge - $6,475'; Cut Bank - $22,216'; Livingston - $12,901 and Libby - $13,363.
Some cities that showed tax declines were: Cascade, East Helena, Broadview, Three Forks, Denton, Grass Range, Saco, St. Ignatius, Lima, Geraldine, Hardin, Roundup, Sheridan,Virginia City, Colstrip, Westby, Stanford, Big Timber, Townsend, Harlowton, Terry, Philipsburg, Clyde Park, Ryegate, Superior, Rexford and Troy.
Source: The Montana Tavern Times, July, 2006, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.