Connolly Ltr - gaming tax issueCity Manager's Office
City Hall
50 West 13th Street
Dubuque, Iowa 52001-4864
(563) ,58~c4110 office
(563) 589-4149 fax
ctymgv~cityofdubuque.org
Apd19,2003
VIA E-mail and
1st Class Mail
mike_con nolly@legis.state.ia.us
The Honorable Mike Connolly
Iowa State Senator
3458 Daniels
Dubuque, IA 52001
Re: Gaming Tax Issue
Dear Senator Connolly:
I am writing asking for your support of a compromise the throe racetracks submitted to
the Legislative leadership on the gaming tax issue. This compromise fits the
parameters established by Governor Tom Vilsack, Speaker of the House Christopher
Rants and Senate Majority Leader Stuart Iverson.
This compromise offer has been titled the Tax Equity Model (TEM).
ElementS of the TEM are:
Tracks would be taxed at 30% (effective July 1, 2002), boats at 20%.
State Revenue neutral is defined as $210,000,000, which is the '02/'03 total
revenue from all gaming (both tracks and boats). This proposal is revenue
neutral retroactive to July 1, 2002.
The TEM uses all gaming industry tax dollars from boats and tracks (including
revenues from any new licenses) in excess of $210,000,000 to give tracks an
annual tax credit, proportionate to their revenues, to reduce the 30% rate over
time, until 20% is reached as a base. After the tracks reach 20%, the State then
again begins to see revenue growth. This addresses the tax inequity issue
between the boats and the tracks over time.
Both plans assume lawsuit is settled and refund ($112 M) is forgiven:
Tracks would agree not to sue State for two years.
All tracks are in agreement to this one specific plan;
Senator Connolly
April 9, 2003
Page 2
The natural growth in the industry at 3% a year would be revenue neutral to the State
and the State would actually start seeing revenue growth from gaming within six years,
the same year the three tracks get to a 20% tax rate. However, any expansion of
gambling at individual facilities or by additional licenses would greatly accelerate this
time frame.
This concept has already been submitted to Senator Iverson, Senator Kramer, Senator
Gronstal and Senator Lamberti.
Any support you can provide would be greatly appreciated. The future of Dubuque
Greyhound Park and Casino and the future of many projects planned by the City of
Dubuque and local charities rests on this issue being successfully resolved.
Please call me if you have any questions. Thank you for considering this request.
Sincer~/~
Michael C. Van Milligen
City Manager
MCVM:jh
Enclosures
cc: Mayor Terry Duggan
Dubuque City Council
Bruce Wentworth, General Manager, Dubuque Racing Association
· . 04/08/2003 10:41 FA~ ~003
Legislative Tax Modeling Summary - Apdl 2003
Revenue Available for
Fiscal Year Model Neutral Rebate .G.F IncreaSe PM B..~R DE; P~M
2003 ATEM Yes $419.795 No 29.43% 29.37% 28.24% $195,121
B TEM Yes $8,084,753 No 27.74% 27.68% 28.59% $2,828,196
2004
2005
2006
A TEM Yes $8,749,359 No ' 27.52% 27.46% 26.37% $3,137,105
B T~M Yes $16,634,027 No 24.79% 24.74% 23,7l~4, $7,731,50;4
A TEM Yes $t3,078.923. No 25.72% 25.66% 24.59%
B TEM ¥~r $27,183,301 No 22,10% 22.05% 21.05%
A TEM Yes $19,408,488 No 24.01% 23.96% 22.92%
A 4- Boat TEM Yes $38,108,488 $5,312.090 20~00% 20.00% 20.00%
B TEM Yes $37,732.575 $1,914,751 20.00% 20.00% 20.00%
B + Boat TEM Yes $56,432,575 $20,614,751 20.00% 20.00% 20,00%
2007 A 'i'EM Yes $25,738,052 No 22.40% 22.34% 21.33%
A + Boat't'EM Yes $44,999,052 $11,258,458 20.00% 20.00% 20.00%
B TEM Yes $48,281,849 $10,890,366 20.00% 20.00% 20.00%
B + Boat TEM Yes $67,916,849 $30,525,366 20.0~% 20.00% 20.00%
2008 A TEM Yes $22,067,617 $78,350 20.86% 20.81% 20.00%
A + Boat TENI Yes $51,999,816 $17,204,827 20.00% 20.00% 20.00%
Actual Rebate
8.~ p_~G
$172,130 $52,544
$2,494,959 $761,568
$2,767,470 $844,783
$6,820,526 $2,081,997
$6,079,990 . $5,362,9~i 1 $1,937,025
$12,534,812 $11,146,893 $3,402,397
$9,021,075 $7.958,151 $2,429,283
$15,500,143 $13,597224 $3,699,031
$16,904,503 $14,836,113 $4,077,208
$16,904,503 $14,936,1'~3 $4,077,208
$11,963,059 $10,553,491 $3,221,502
$15,939,005 $13,984,377 $3,817,212
$17,635,941 $15,481,368 $4,274,175
$17,635,941 $15,481,368 $4,274,175
$14,905,044
$16,377,868
B TEM Yes $58,831,123 $19,865.980 20.00% 20.00% 20.00% $18,367,378
B + Boat TEM Yes $79,401,123 $40,435,980 20.00% 20.00% 20.00% $18,367,378
2009 A TEM Yes $28,397;t81 $2,768.196 20.00% 20.00% 20.00%
A + Boat TEM Yes $59,341,181 $23,712.196 20.00% 20.00% 20.00%
$13,148,831 $3,935,392
.$14,371,529 $5,935,392
$16,126,622 $4,471,142
$16,126,622 $4,471,142
$16,816,731 $14,758,682. $4,053,572
$16,816,731 $14,758,682 $4,053,572
t~ TEM Yes $69,380,397 $28,~41,595 20.00% 20.00% 20.00% $19,098.816
B + Boat TEM Yes $91,920,397 $51,281,595 20.00% 20.00% 20.00% $19,098,816
2010 A TEM Yes $44,726,745 $8,t53,565 20.00% 20.00% 20.00%
A + Boat TEM Yes $56,231,745 $29,958,565 20.00% 20.00% 20.00%
B TEM Yes $79.929,671 $37,517,209 20.00% 20.00% 20.00%
B + Boat TEM Yes $103,304,671 $61,192,209 20.0~ 20.00% 20.00%
2011 A TEM Yes $51,056,310 $13,.538,934 20.00% 20.00% 20.00%
A + Boat TEM Yes $73,121,506 $35,604,130 20.00% 20.00% 20.00%
$16,771,877 $4,668.109
$16,771,877 $4,668,109
$17,2~/5,593 $15,145,835 $4,171,752
$17,255,593 $15,145,835 $4,171,782
$10,930,254
$19,83O,254
$17,694,456
B TEM Yes $90,478,945 $46,792,824 20.00% 20.00%: 20.00% $20,561,991
B + Boat TEM Yes $114,787,542 $71,101,422 20.00% 20.00% 20.00% $20,561,691
2012 ATF_M *Yes $57.355,974 $19,924,302 20.00% 20.00% 20.00%
A + Boat'J'EM Yes $80,011.191 $41,549,819 20.00% 20.00% 20.00%
B TEM Yes $101,029,219 $55,768,439 20.00% 20.00% 20.00%
B + Bo~t TEM yes $126,273,219 $81,013,439 20.n0% 20.00% 20.00%
$17,417,132 $4,865,076
$17,417,132 $4,865,975
$15,532,988
$15,532,998 $4,,2.8.9,932
$18,062,386 $5,062,~,3
$18,n62,386 $5,062,043
$18,133,318 $15,920.141 $4,408,113
$18,133,318 $15,920,141 $4,408,113
$21.293,129 $18,707,541 $5,259,010
$21,293,129 $18.707,841 $5,259,~10
04/08/2003 10:41 FA~![
OO2
Desciption of Model Designations:
A
A + Boat
B
B + Boat
Is a 30% racetracA tax with 3% growth per year.
Is a 30% racetrack tax with 3% growth per year and a new boat in FY 2006 ($100M)
ts a 30% racetracA tax with 5% growth per year.
Is a 30% racetrack tax with 5% growth per year and a new boat in FY 2006 ($100M).
TEM is the model defined as the Tax Equity Model. It allows rebates to the
extent that the State GF is revenue neutral at $210 and conditioned
upon revenues in excess of $210 miilton and payable up to an amount
which would reduce the tracAs effective tax ra[e to 20%. Available
rebate funds are partitioned to tracks based on each tracks
ploportionate share of the combined bracks AGP.. Unused ft.~nds
accrue to the GF.
The Honorable Mike Connolly
~owa State Senator
3458 Daniels
Dubuque, IA 52001
The Honorable Roger Stewart
Iowa State Senator
3936 317 Avenue
Preston, IA 52069
The Honorable Pat Murphy
Iowa State Representative
155 N. Gmndview Avenue
Dubuque, IA 52001
The Honorable Steven Lukan
Iowa State Representative
7365 Columbus Street
New Vienna IA 52065
The Honorable Julie Hosch
Iowa State Senator
22852 Butterfield Road
Cascade, IA 52033
The Honorable Pam Jochum
Iowa State Representative
2368 Jackson
Dubuque, IA 52001
The Honorable Robert Osterhaus
Iowa State Representative
216 Austin
Maquoketa, IA 52060
The Honorable Gene Mantemach
Iowa State Representative
9608 Maple Road
Cascade, IA 52033