Taxing visitors not very hospitable

This post went up yesterday at Ohio Watchdog:

It was only a matter of time before local politicians figured out a way to get even more money from the newly established casinos in Ohio.

It’s become a standard practice for municipalities to tax the income of their residents, including income earned from gambling. Many also tax individuals who work within the jurisdiction, regardless of where they live, since the income is earned and paid inside the city limits. But imposing an income tax on tourists who come to a city to gamble is new for Ohio.

Columbus recently approved an ordinance to impose its local income tax on any non-resident who hits it big at the new Hollywood Casino. The measure, which will be retroactive to June 1, was passed unanimously.

The Toledo Council has a pending ordinance that will allow the city to impose its income tax on “lottery, gambling winnings, lotteries, raffles, as well as the fair market value of bonds, cars, houses, and other noncash prizes” won or earned by non-residents within the city limits. And yes, this would include various raffles and bingo.

Both ordinances allow only “professional gamblers,” as defined by the Internal Revenue Service, to deduct losses before calculating the amount of income tax owed.

The summary of the Toledo legislation states the taxation is “desirable, because doing so increases General Fund revenue.” In other words, imposing new or additional taxes is good because it increases the amount of money government has.

But will it really give local governments more money — or will the new taxes be offset by people who will make other choices?

Read more

No on Issues 1 and 3

For many of the same reasons as I oppose Issue 2, I am also against Issues 1 and 3.

Here is the Ohio Issues Report from the Ohio Ballot Board that provides the ballot language for the measures, the actual text of the proposals as well as pros and cons of each one.

Issue 1 would "authorize the state to issue bonds to provide compensation to veterans of the Persian Gulf, Afghanistan and Iraq conflicts."

Under the provision:

* The state would issue up to two hundred million dollars ($200,000,000) of bonds to provide compensation to veterans of the Persian Gulf, Afghanistan, and Iraq conflicts, and to pay for the administration of the Compensation Bond Retirement Fund and the Compensation Fund.

* The Ohio Department of Veterans Services would provide compensation to persons who have served in active duty in the United States armed forces at any time during the Persian Gulf, Afghanistan, and Iraq conflicts and who were Ohio residents at the start of active duty services and are currently Ohio residents.

So the state of Ohio is going to borrow money to pay out to a certain class of citizen based upon their employment in the U.S. armed forces. This is not for individuals who actually fought in the named conflicts, but for all veterans.

There are many who will say that this is 'the least we can do' for our veterans. But I have a sneaking suspicion that our veterans would not want the state - or its taxpayers and their fellow citizens - to go into debt just to give them cash for their service.

And that's what this measure will do. The state is going to borrow $200 million dollars to pay out to a particular class of Ohio citizens. There is nothing that says where the payments for this loan are going to come from - or whether or not tax incentives or credits on the Ohio Income Tax forms might be a better way of 'compensating' the valiant individuals.

Plus, the maximum amount is only $1,000 per vet. Do we really think $1,000 is going to be 'enough' to express our true gratitude for their service? If $1,000 is a good amount, why not $5,000, or $10,000 or even $25,000? Or is the $1,000 at a total cost of $200 million just what they think voters will approve?

And exactly how much of that $200 million is going to be dedicated to paying for the 'administration' of the bonds and the disbursements? Issue 1 would create another expansion of government, including an expansion of the costs of government.

Additionally, we're still involved in these conflicts, so we really have no idea what the final costs would actually be. Between the unknown number of veterans and the unknown costs of administration, there is no guarantee the final bill will be 'just' $200 million.

It is true that we can never do enough for our veterans, but that is a personal choice and a personal obligation - not a state deciding to borrow money and then tax everyone for the repayments. Besides, do you really think the politicians will be telling our veterans to thank the Ohio people for the 'gift'? Or will they be going around touting what 'they' did to help???

The very noble goal of providing a 'thank you' should be not be done by putting a financially-strapped state into further debt, or by expanding the cost of state government, or by taxing individuals just so politicians can have a point to add to their campaign literature.

If Ohioans really want to help our veterans, volunteer for them. Offer to help a military family clean out their gutters or do other home maintenance and repairs. Offer to drive a vet to the doctor's appointment, take them out to lunch, give them a grocery gift card, visit them when they're in the hospital.

If you want to show your appreciation for their service, YOU do it - personally - in a way that brings honor to you and them.

Vote NO on Issue 1 and take it upon yourself to provide your own 'thank you' for the sacrifices our U.S. armed services have made for our safety.

***

Issue 3 would amend the state Constitution to allow for one casino each in Cincinnati, Cleveland, Columbus and Toledo but would distribute the taxes on the casinos to all Ohio counties.

Many people have taken a position on this measure based upon the economic development aspects, the potential revenue to the various jurisdictions or because of the very subject of gambling.

My opposition has nothing to do with the subject matter. I believe that if you want to gamble, the state shouldn't be able to dictate to you about that choice. And while I believe that gambling can be bad - in fact, very, very bad - for some people, it can also be a form of entertainment for those who do it responsibly. Of course, that requires individuals to be responsible - or to suffer the suffer the consequences if they are not.

When it comes to tax revenue and/or economic development, pick your side and you'll find plenty of studies, reports, evaluations, etc...that will reinforce your opinion.

My opposition is to the amending of the state Constitution to carve out a business option for a particular type of business in only a few of the cities in the state.

If there was an amendment to establish plants that make whiskey in certain towns in Ohio with income from taxes distributed throughout the state, would you believe this was a proper use of the Constitution? Probably not...

What if the industry was a Halloween costume maker?

The point is that the 'industry' or specific business is not relevant. What is relevant is maintaining the Constitution as a document that applies to all equally - not one that can be piece-mealed to carve out benefits or exceptions for some.

So regardless of your support or opposition to 'gambling,' I urge you to reject the Constitutional amendment process proposed and vote NO on Issue 3.


*** If you'd like to know what positions other bloggers and media have taken on these issues, be sure to check out the 2009 Ohio Issues page on Ballotpedia.

No on Issue 2

My post opposing Issues 1 and 3.

Issue 2 is a constitutional amendment to create a 13-member Livestock Care Standards Board to prescribe standards for animal care and well-being that endeavor to maintain food safety, encourage locally grown and raised food, and protect Ohio farms and families.

Issue 2 - summary, full text and pros and cons begins on page 9 of this link.

It comes as no surprise that groups like the United States Humane Society (USHS) oppose this because, in their words, it doesn't go far enough, while many legislators (Republicans and Democrats) are supporting it.

What does surprise me, however, is the support from traditional 'limited government individuals' - primarily out of fear that more restrictive rules could be enacted if they don't support this measure. Many of these individuals cite what the USHS has done in California - as if Ohioans would really embrace the bankrupt state of California as an example we must follow.

But representatives of the Humane Society said last week that this measure will not prevent them from seeking, through citizen initiative, more restrictive rules if Issue 2 passes. They admitted that passage would make their goal harder to achieve, but they will pursue it anyway.

And then there is the conundrum that supporters will find themselves in if Issue 2 fails - and even if it passes. Having supported one form of government intrusion into the area, they will be hard pressed to oppose any other form. So the idea that they can prevent the USHS standards by creating their own puts them in the position of not having any credibility if they later decide to oppose any USHS-written measure.

So the reasoning presented is basically this: "We need to embrace an expansion of government in order to prevent an expansion of government."

Rather logical isn't it? Of course, the 'logic' falls apart the minute it is reduced to the basic premise.

I oppose Issue 2 based upon two principles - that amending the Constitution of the State of Ohio should not be done, except in the most serious of circumstances; and that a limited government is most desirable.

I reject the idea that a government agency should be enshrined in our state's constitution. The Constitution details such things as the inalienable rights of citizens, the election, replacement and duties of the branches of government and other such details for the organization of the state. It currently requires only a board of education and a ballot board, which is responsible for approving the ballot language for issues to be voted upon.

It does not require any other such boards, so to do so now would be an aberration in our document.

If there is truly such a need for this type of body, why not just make another department within state government? Great question, right?

Well, the answer is because there already is one - the Department of Agriculture which, interestingly, has the ability, per Ohio Administrative Code Chapter 901, to do exactly what this measure purports to accomplish.

So why do we need to amend our Constitution if the ability to implement the proposed idea already currently exists?

Sadly, the proponents of Issue 2 have not explained this. Instead, they are using 'fear' of extreme action by the USHS to encourage support of the measure.

But more importantly, the government of Ohio does not need to be expanded.

I'd oppose such expansion in a good economy, but to create a new board, a new bureaucracy, add new costs and impose new regulations in an already faltering economy makes absolutely no sense.

The state legislature recently voted to 'delay' planned tax cuts because they don't have enough money to balance the budget. As State Auditor Mary Taylor warned, the budget was based upon nearly $5 billion (yes, billion with a 'b') in one-time funds that will not be here in the next biennial budget. So where does anyone think we'll have the funding for another - new - bureaucracy? The simple answer is - we won't.

So either the state will have to cut something else in order to have this new board, or they will have to raise more taxes. Either way, Ohioans will not be happy.

Expansion of government is never a good idea - and this one is no exception.

There are plenty of other reasons to oppose Issue 2, but these are the principled ones. I hope you will vote NO on Issue 2.


*** If you'd like to know where the issues stand in terms of endorsements, be sure to check out the Ohio 2009 issues page on Ballotpedia! Positions taken by bloggers and newspapers are listed.

Keno revenue comes up short

I saw coverage of this in various news outlets over the last couple of weeks, but nothing locally. I may have missed it, but just in case....

The Ohio Lottery reported that year-end figures for the new Keno game were significantly short of projections. They were budgeted at $73 million for the year which ended July 31. Total collections, however, were only $30 million - 41% of the estimated amount.

From The Columbus Dispatch, which questions the results in relation to the new video slot machines:

"The video-slots plan will raise $933 million for the current two-year budget, the governor predicts.

About half -- $455 million -- will come from license fees paid by racetracks that install slot machines. The rest, $478 million, is the state's projected share of revenue generated by the slots.

How likely is Ohio to see $478 million? Amanda Wurst, Strickland's spokeswoman, says the governor's slots estimate takes into account the slumping economy. But if the same thing happens to slots revenue that happened with Keno, then slots will generate just $196 million for Ohio, leaving a $282 million hole in the state's 2010-2011 budget.

And even this is contingent on the state winning a lawsuit challenging its right to authorize slot machines without a statewide vote."

This shows that, even with gambling revenue, nothing is guaranteed. So what's next?

The Keno revenue was counted upon to avoid deep cuts in education funding. Now that it's not even half of projections, what decisions will the state have to make regarding education disbursements? Will there end up being cuts to local school systems?

Considering that we will be electing school board members this November, I'd be interested in hearing their thoughts on this on the campaign trail.

And we also have Issue 3 on the ballot in Ohio which would allow casinos in certain cities. Will the lack of projected revenue from Keno have an impact on that vote?

stay tuned....