On Monday Arkansas Attorney General Leslie Rutledge rejected a proposed state constitutional amendment establishing four casinos in Arkansas.
The proposal is similar to one the A.G.’s office rejected last month.
Supporters of the measure want to circulate petitions to place the amendment on the November ballot. If passed, the amendment would authorize casinos in Jefferson, Garland, Crittenden, and Pope counties.
The measure also would legalize sports betting at these casinos if federal laws against sports betting change.
The A.G.’s office said the amendment’s popular name was too long to be useful and that its ballot title did not accurately reflect the measure.
The A.G.’s office also noted that the ballot title itself appeared too long. In the past courts have indicated that ballot titles must be short enough that voters can read and understand them in a reasonable amount of time while in the voting booth.
We applaud Attorney General Rutledge and her team for rejecting this casino amendment. Gambling is a blight on the community. It preys on the poor and hurts families. These are problems Arkansas simply does not need.
FOR IMMEDIATE RELEASE
Thursday, January 25, 2018
Little Rock, Ark. – On Thursday the Arkansas Attorney General rejected wording for a ballot proposal authorizing casinos in three counties in Arkansas.
Family Council President Jerry Cox issued a statement saying, “I am glad Attorney General Rutledge rejected this measure. This amendment is so bad it’s hard to know where to begin. Casinos prey on the poor, but this amendment deliberately builds casinos in some of Arkansas’ poorest counties. In fact, it actually prohibits casinos in prosperous counties in central and northwest Arkansas. Why would they want to put casinos in the poorest parts of the state? That’s just going to entice poor people to gamble away what little money they have.”
Cox also said the amendment benefits gambling corporations from other states. “The way the amendment is written, wealthy companies who have experience running casinos elsewhere are the only ones who would be eligible to operate casinos in Arkansas. That’s going to favor big gambling corporations from other states who are looking to expand business. Local people won’t be the ones who own the casinos. Exactly how does that drive Arkansas forward?”
Cox also pointed out the tax rate the amendment imposes on casinos is well below the national average. “Most states tax casinos at a rate of twenty-percent to fifty-percent or more. Under this amendment, casinos in Arkansas would be taxed at twelve-percent. That means casinos in Arkansas would not generate as much tax revenue as they do in other states.”
Cox said in the end casinos will not improve Arkansas’ economy. “Just look at Mississippi and Oklahoma. Their counties that have casinos also have high levels of poverty. Arkansas already has casinos in Garland and Crittenden counties. Garland Count’s poverty rate is forty-percent higher than nearby Saline County’s. Crittenden’s poverty levels are some of the highest in the state. You can’t gamble and tax your way to prosperity.
“And what about the social cost? Casino gambling is linked to homelessness, domestic violence, divorce, and bankruptcy. Supporters say the amendment will improve Arkansas’ roads. If any roads get improved, the poor will be the ones paying for it, and the best roads in town probably will be the ones leading to the casino.”
Family Council is a conservative education and research organization based in Little Rock.
Photo Credit: By Brian Turner (Flickr: My Trusty Gavel) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons.
A week before Christmas, consultants for Arkansas’ Tax Reform and Relief Legislative Task Force released an interim report analyzing the state’s tax structures.
The report is some 180 pages long, and touches on everything from motor fuel taxes to K-12 education funding.
The report does not make any final recommendations about tax policies, but it does contain a few elements we find troubling.
#1. The Report Hints at Cutting Charitable Tax Exemptions
Under Arkansas law, sales to nonprofit hospitals, sanitariums, and nursing homes are exempt from state sales tax.
The report says exemptions like this one “significantly erode the state and local tax base.” In other words, the state’s consultants seem to think Arkansas might have a lot more tax revenue to work with if it started taxing sales to these charities.
The report refers to this exemption as a “prime candidate for review” by the Arkansas Legislature. It also highlights sales tax exemptions on churches and other nonprofits.
Charities and churches contribute at least $378 billion to the U.S. economy each year — and possibly much more than that, according to some estimates.
Many charities operate on budgets that are so tight they likely would have to shut their doors if they were taxed at the same rate as for-profit corporations. However, this report by the state’s consultants could lead some to conclude the State of Arkansas would somehow be better off if it taxed charitable organizations. That’s a dangerous conclusion.
#2. The Report Hints That Gambling Might Be a Good Source of Tax Revenue
The report notes that many states are turning to legalized sports betting as a source of tax revenue, and says,
While most excise taxes have shown little growth in recent years, the revenue from electronic games of skill [the casino games operated in Hot Springs and West Memphis] is a notable exception. Revenue generated by the tax shows a strong upward trend in recent years. Since 2012, revenues have more than doubled.
This hints that Arkansas might somehow reap more tax revenue if it legalized more gambling. However, no state has gambled and taxed its way to economic prosperity.
The Arkansas Lottery pulls hundreds of millions of dollars out of the state and local economy each year; casinos and other forms of gambling do the very same thing. As we noted a few years ago, poverty levels are above average in parts of Mississippi, Arkansas, and Oklahoma that have casinos.
What’s more, many experts will tell you the social and economic cost of gambling dwarfs any tax revenue the state might glean. The bottom line: Arkansas won’t improve its economy or its state budget by legalizing more gambling.
This report is not the final word on Arkansas’ tax policies. However, it could lead some to believe Arkansas might benefit by taxing charities and legalizing more gambling. Arkansans should think twice before venturing down that road.