TALLAHASSEE · When it comes to taxes on slots, more may not be better.
House and Senate committees today will be asked to boost the proposed taxes that Broward pari-mutuel
venues pay on the machines they install, possibly as high as 60 percent.
But the higher the tax goes, the less money the state may actually collect to help pay for education.
According to legislative economists, a tax that goes no higher than 35 percent will yield $382 million for public
schools. By raising the maximum rate to 45 percent, the state's take drops to $324 million.
"There's a bell curve. You reach an optimum. When you increase the rate, you can't generate the profits to
build a first class facility, and then fewer people will come," said former state Education Commissioner Jim
Horne, a leading spokesman for the slots issue during the statewide vote last fall and local referendums in
March.
Senate Judiciary Chairman Dan Webster is expected to ask his committee to impose a 50 percent tax on the
machines during a meeting this morning.
"I don't want casinos in the state. I've said that a hundred times," said Webster, R-Winter Garden.
Webster also doesn't want to see alcohol served at the facilities where the slot machines will be located,
doesn't want gamblers to have access to ATM machines and thinks pari-mutuels should be forced to run races
or provide slots -- but not both.
The House bill, scheduled for a hearing by the House Fiscal Council this afternoon, could raise the tax rate to
60 percent at the urging of Gov. Jeb Bush's office.
The call for higher taxes is being echoed by Florida TaxWatch, which recently published a study insisting the
state should work to get a 74 percent tax rate.
"Based on our projections involving a combined racino and Indian-operated slots market of 13,500 machines
... a gaming tax of 74 percent would provide approximately $770 million in state revenues annually," says the
report by Jeffrey Hooke, chairman of the Maryland Tax Education Foundation, and Thomas Firey, who edits a
magazine for the Cato Institute.
In contrast, they argue a 30 percent tax rate sought by Broward's four pari-mutuel venues would provide $315
million.
Some slots proponents view the push for higher tax rates as a way to either discourage Broward's pari-mutuel
venues from installing the machines or ensure they don't fare well.
"They know if you jack the rate up, it will stop anything from happening," Horne said.
"Politically, some people are interested in higher tax rates because they want to keep gambling from
succeeding, and then they can beat their chests and say they beat off the gambling interests," said Sen. Steve
Geller, D-Hallandale Beach.
"But New York has a 70 percent tax rate, and the slot machines there have been a spectacular flop," Geller
said.
Linda Kleindienst can be reached at lkleindienst@sun-sentinel.com or 850-224-6214.
TALLAHASSEE - Florida could have the second-highest tax in the nation on slot machines, under a new rate
proposed Thursday by House Speaker Allan Bense.
As much as 55 percent of the money generated by slot machines at four Broward parimutuels would be taxed
for education, a rate that a state economist says is exceeded only by a 61 percent gambling tax in Rhode
Island.
''We looked at a lot of other states and their tax rates,'' Bense said. ``I'm sure the industry doesn't want 55
percent, but we're going to put that in if members will pass it.''
The higher tax rate will be proposed today in a House committee, where lawmakers will continue to craft the
rules for slot machines in Florida. A Senate committee will also consider a much higher tax rate in its version
of the bill, also being heard in committee today.
The Senate will consider a sliding tax rate of 40 to 50 percent, up from its original proposal of 30 to 35 percent
of proceeds from the machines, depending on how much money a parimutuel brings in from slots.
The Senate bill, widely considered the version more favorable to parimutuels, is likely to see dozens of
changes today as it goes through the Senate Judiciary Committee headed by Sen. Daniel Webster, a Winter
Garden Republican.
Webster said he wants to steer the proceeds from the slots tax to a special state account earmarked for school
construction, known as the Public Education Capital Outlay trust fund. The money in that account now comes
from taxes on electric and telephone utilities and has been declining in recent years because of industry
deregulation.
Senate President Tom Lee said he not only supports the idea but believes it is a logical way to address two of
his other legislative priorities this session: finding a way to pay for the school-construction demands of the
class-size amendment and finding a permanent source for growth-related costs such as schools.
''I think that's a good place in terms of public education to put the slot machine proceeds,'' Lee said Thursday.
``It certainly will keep us from spending it on a bunch of little initiatives that have little value to the system.''
Some pro-gambling lawmakers say they are worried that the tax rate could be set too high, making it difficult
for the parimutuels to make enough money to support building casinos for slot machines.
''Obviously, there's a sweet spot,'' said Sen. Steve Geller, a Hallandale Beach Democrat. ``I hate to keep
using that phrase, but that's what it is. If we increase taxes beyond that and put restrictions on the hours of
operation, we will see a substantial decrease in revenue.''
But Rep. Frank Attkisson, the House sponsor of the slots bill, said he and Bense wanted to strike a balance
between squeezing as much money as possible out of slots for education and making the tax rate so onerous it
would cripple the three tracks and one jai alai fronton that will be allowed to offer slots.
'The speaker and I are trying to think, `OK, what can a business afford?' '' said Attkisson, a Republican from
Kissimmee.
A state study released Monday found that even though the House is proposing a higher tax rate, the Senate
version of the legislation would bring the state more money because it allows more sophisticated, Vegas-style
Class III slots.
The Las Vegas-style machines, which can offer bigger jackpots, pit the players against the house rather than
against each other, as Class II slots do.
The study shows that the higher tax rate sought by the House will bring in about $200 million for education in
its first full year of operation; the Senate bill, with a lower tax rate and Las Vegas-style slots, would bring in an
estimated $227 million.
The House, along with Gov. Jeb Bush, has resisted Class III-type machines because of concerns they would
open the door to similar higher-stakes equipment at Indian casinos in Florida, which now have Class II slots.
But earlier this week, a Senate panel was told by the chairman of the National Indian Gaming Commission
that Florida's Miccosukee and Seminole tribes are automatically entitled to Las Vegas-style slot machines at
their casinos, no matter how lawmakers write the rules for slots.
Hialeah Park racing gaining support
Efforts are once again underway to restore horse racing to troubled Hialeah Park, which now hosts weddings
and other events.
By Lesley Clark
lclark@herald.com
© 2005 Miami Herald
Friday, April 22, 2005
TALLAHASSEE - A proposal that could bring horse racing back to Hialeah Park is meeting little resistance in
the state House, thanks to speculation that the racetrack's rebirth could make it easier to get slot machines
approved in Miami-Dade County.
A proposal that would retroactively grant the park its now-revoked thoroughbred racing permit is heading to
the House floor after clearing its final committee Thursday with no debate.
A similar measure is stalled in the Senate, but its sponsor, Hialeah Republican Sen. Rudy Garcia, said he's
still hoping to get the measure heard.
The effort is facing little opposition from House members who once opposed other exemptions for the park.
This time, there is a belief that an operational Hialeah Park could be a major player in efforts to bring slots to
Miami-Dade. Voters in Miami-Dade last month rejected a proposal to allow gambling facilities to add slot
machines, but gambling operators -- who succeeded in Broward County -- plan to go back before Miami-Dade
voters in 2007. The measure failed in several primarily Cuban-American neighborhoods, including Hialeah.
Though the park isn't included in the language of the constitutional amendment that put the slots on the ballot,
proponents suggest that by 2007, legislators may look favorably on expanding gambling statewide if slots are
successful in Broward. Also, Gov. Jeb Bush, a staunch gambling opponent, will be out of office by then.
'It's all possible, but it all comes back to `We need a permit,' '' said Esteban ''Steve'' Bovo, a Hialeah City
Council member and park employee who is registered to lobby the Legislature on the park's behalf. ``All the
pipe dreams we have for Hialeah, we could begin contemplating if we had a permit.''
LOST PERMIT
Hialeah lost its permit after unsuccessfully asking the Legislature in 2001 to continue regulating racing dates
so it could race competition-free. But other area tracks argued that legislators had already agreed to allow an
open market to determine dates and that jockeys didn't want to run at Hialeah because they made less money
at the track.
Without holding active races, the track couldn't keep its permit.
Now some of the legislators critical to defeating legislation in 2001 that would have extended Hialeah's racing
dates have voted in favor of the new proposal, suggesting it could aid the campaign for slots.
''It helps with the possibility of voting out slots in Dade and it puts the park in the best position they've been in
for years,'' said Rep. Ron Greenstein, a Coconut Creek Democrat.
KEY ALLIES
Most of the Miami-Dade legislators also back the Hialeah legislation and their support could prove critical in
an election. They've made their feelings known to the track's competitors, who have opposed past exemptions
for Hialeah.
''I've been very clear with everyone that they certainly don't want to alienate anyone who could possibly help
them in two years,'' said Rep. David Rivera, a Miami Republican who led the efforts in South Florida to
approve slots.
Miami Republican Rep. Marco Rubio, who accompanied Bush on a tour of South Florida that is largely
credited with sinking the slots campaign in Miami, referred questions to the bill's sponsor, Rep. Rene Garcia,
a Hialeah Republican who made an impassioned appeal on the House floor in 2001 for the park to keep
regulated racing dates.
When the effort failed, the park's permit was revoked. The park is currently appealing the revocation.
''We want to make sure Hialeah has a chance for a viable track,'' Garcia said.
In the Senate, Rudy Garcia said he's opposed to slots but wants to see racing returned to the fabled horse
track, parts of which are listed on the National Register for Historic Places.
''I want to do what's right for my hometown,'' Garcia said.