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Legislature OKs
bill raising
Detroit casino taxes
Compromise would help plug hole in
state budget
August 5, 2004
BY DAVID EGGERT
ASSOCIATED PRESS
LANSING -- The state Legislature
voted Wednesday night to increase the tax on Detroit's
three casinos by one-third and set aside some of the new
revenue for agricultural programs.
The Senate voted 30-6 and the House
93-15 to send the bill to Gov. Jennifer Granholm.
"This is a critical step toward
resolving the state budget, and we are pleased they've
supported it," Granholm spokeswoman Liz Boyd said. "It's a
critical component toward solving the budget."
Republican House Speaker Rick
Johnson of LeRoy held voting open for more than 1 1/2
hours in an effort to jockey for the 82 votes he needed to
win approval for the measure.
It needed a three-fourths vote from
both chambers of the Legislature to win approval because
it amends a voter-approved initiative that created the
casinos.
The bill would increase the tax on
the three Detroit casinos from 18 percent to 24 percent.
It's expected to bring in an additional $50 million for
the fiscal year that begins Oct. 1.
About $6 million of the additional
revenue would be set aside for agricultural interests, but
it's unclear how those funds would be distributed, said
Keith Ledbetter, spokesman for Johnson.
The bill reflects an effort to reach
a compromise with some House Republicans who have been
strong supporters of a bill to allow horse tracks to
install slot machines and other gambling devices to give a
financial boost to agriculture interests.
Rep. Larry Julian, who introduced
the so-called racino bill, voted for the compromise after
originally voting against it.
Some GOP House members who support
the racino bill have been against moving ahead on the
higher casino tax, fearing they would lose leverage.
Racino supporters in the Legislature
got a boost from hundreds of horse breeders, farmers and
their supporters who rallied outside the state Capitol in
support of the legislation earlier Wednesday.
"This is the last gasp," said Keith
Carlisle, 45, a horse breeder from Shiawassee County.
The compromise was laid out shortly
after the House unanimously voted down an earlier version
of the legislation that didn't have any revenue
specifically for agriculture programs.
The approved bill includes a
provision that would scrap the increase if horse tracks
are allowed to install video lottery machines. It also has
an incentive for the three Detroit casinos -- MotorCity,
MGM Grand and Greektown -- to build permanent hotels.
The Detroit casinos have fought the
higher tax, arguing that it would cost jobs and stunt
economic development.
However, without it, lawmakers will
have to find another way to help plug the projected $1
billion deficit in next year's budget.
Associated Press writer
Amy F. Bailey contributed to this report.
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