Harrah’s tax break clears Legislature

Melinda Deslatte

Wednesday, March 21, 2001 | 11:14 a.m.

BATON ROUGE, La. -- The state House voted Tuesday to save Harrah's New Orleans Casino, approving a new contract that cuts the gambling hall's minimum state tax in half.

The bill, approved 64-36, goes next to Gov. Mike Foster, who proposed the measure as part of his two-pronged gambling package to provide school teacher and university professor salary increases.

The Senate voted 35-3 to raise taxes on all 14 of Louisiana's riverboat casinos, including the five in the Shreveport-Bossier area that were exempted by the House.

The House has rejected the Senate change, setting up a House-Senate committee that will try to find a compromise both chambers can live with.

The six-member committee meets Wednesday, one day before the special tax-writing session must end.

Foster wanted passage of the gambling bills to ensure some extra funding to fulfill his promise to teachers, who have been conducting frequent sickouts because of their low pay.

The New Orleans casino bill was the most complicated. While cutting the casino's tax, the bill raises money for teachers.

The casino operator now pays the state $100 million a year but can only guarantee payment one year at a time. The operator, JCC Holding Co., said it cannot guarantee the payment after March 31 because the casino is losing money because of the massive tax.

The state cannot use in its operating budget money that is guaranteed for only one year at a time. Such funds can only be used to retire debt or for construction.

With a lower tax, the casino can guarantee payment for a number of years. That kind of guarantee allows the lesser tax revenue to be used in the operating budget for teachers.

The Senate-approved riverboat bill gives most of the floating casinos what they wanted in return for the tax increase -- dockside gambling instead of cruises along state waterways.

However, the Shreveport-Bossier boats have always been exempted from cruising the shallow Red River and the delegation from that area had opposed making them share in the tax increase.

"I'll be the first to tell you riverboats have done good things in Bossier Parish," said Sen. Foster Campbell, D-Bossier City. "But I don't think you can charge the Ford Motor Co. in Opelousas a higher tax rate than the Ford Co. in Minden. You know why? Because it doesn't make any damn sense. It's wrong."

Opposition weakened to adding the northwest Louisiana boats after a provision that would have allowed the floating casinos to exchange their boats for barges with even more gambling space was struck from the bill.

That brought gambling opponents on board because it lessens the dangers of cruising state waterways, while doing away with the perceived expansion of gambling on barges.

"I have a zero gambling record. I could vote for this. We would raise taxes on the gamblers while raising money for education. We would make the rivers safer, and we would not allow the expansion of gambling," said Sen. Robert Barham, D-Rayville.

The measure approved by the House would have raised the tax on riverboats from 18.5 percent of gross take to 21.5 percent if the boat stopped sailing and 23.5 percent if the boat became a barge. The bill excluded the five riverboats in the Shreveport-Bossier area from the dockside increase.

The amended Senate bill would raise the tax to 21.5 percent for all riverboats, increasing the estimated revenue for a teacher pay raise from $54 million to $99 million. Any changes in the bills must go back to the chamber of origin for approval, so the House will get the amended Senate bill.

The Senate's approval of a different riverboat tax increase could sink the riverboat bill, warned Sen. Francis Heitmeier, D-New Orleans.

"What I'm afraid is going to happen is we think we're going to get more money and we're going to get nothing," he said.