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Casino Tax Break in the Crosshairs

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(credit: CBS)

(credit: CBS)

Written by Dominic Dezzutti

Governor John Hickenlooper had a relatively quiet legislative session. He had a budget cut to announce here and there, but he really didn’t get involved in many legislative battles. But now it seems that he is done sitting on the sidelines and is ready to get directly involved in one of the tax breaks passed, not by the legislature, but by the Colorado Limited Gaming Control Commission.

Last month, the Colorado Limited Gaming Control Commission announced a five percent tax break for casinos who have claimed that they need a financial break after three straight years of poor revenues during the recession.

The reason that this particular tax break is controversial is that Colorado casinos were given a major boost in 2008 when voters passed a new law granting them the ability to install new games, higher limits and to be open 24 hours, in exchange for a tax that would benefit community colleges.

In fact, that amendment was one of the only ballot issues to pass in that year, mostly due to the fact the opponents had a difficult time raising money to fight an amendment that was built to help community colleges. I remember hosting the debate on this issue and it wasn’t a fair fight, if you know what I mean.

Casinos would be wise to remember how hard it was to compete against them when community colleges were on their side.

But now, only three years after getting what some experts feel was a life saving gift from the voters, dramatically changing revenue potential, casinos say that they need some of that money back from community colleges or they’re going to go bankrupt.

Does anyone else smell a bait and switch?

Someone who does is Gov. John Hickenlooper. His administration announced on Tuesday that he is looking into ways of overturning or encouraging the reconsideration of the tax break.

The casinos have claimed that without this tax break businesses will be shuttered and jobs will be lost. But the details that the casinos don’t want mentioned are that community colleges, already losing state funds, will also lose jobs if the tax break remains.

The current tax rate may seem like a steep bill for the casinos. However every time someone bets $100 at a roulette wheel at 4am, casinos are making money that they would not have made if it weren’t for their alliance with community colleges.

Would casinos prefer to pay a much lower tax rate but still have the $5 limits and be forced to close at 2:00am? I doubt it, and Gov. Hickenlooper doubts it too.

It looks like Gov. Hickenlooper wants to remind the casinos how powerful of an ally community colleges can be, and what they did for casinos during a year where voters were not in a giving mood.

It’s been a while since John Hickenlooper flexed his muscles on a tax issue. He usually gives himself a bit more time to prepare. He’s on a bit of deadline with this one. But if he plays his cards right, (sorry, I couldn’t help it) he can remind the casinos that even though times are tough right now, they’d be a lot tougher if they were still playing $5 limit blackjack.

Everyone enjoys a tax break. But when that break comes at the expense of the very ally that helped you win the ability to double your revenue, it’s a bit greedy to ask for a tax break.

About The Blogger

- Dominic Dezzutti, producer of the Colorado Decides debate series, a co-production of CBS4 and Colorado Public Television, looks at the local and national political scene in his CBSDenver.com blog. Read new entries here every Monday, Wednesday and Friday. Dezzutti writes about federal, state and local matters and how our elected leaders are handling the issues important to Colorado. Dezzutti also produces the Emmy winning Colorado Inside Out, hosted by Raj Chohan, on Colorado Public Television.

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