Casino tax hike clears Michigan Legislature

David Eggert

Thursday, Aug. 5, 2004 | 10 a.m.

LANSING, Mich. -- The state Legislature on Wednesday night voted to increase the tax on Detroit's three casinos by one-third and set aside some of the new revenue for agriculture 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 after the votes. "It's a critical component toward solving the budget."

Republican Rep. Ken Bradstreet of Gaylord was the only representative who didn't vote because he was absent. Democratic Sen. Buzz Thomas of Detroit was absent and Democratic Sen. Irma Clark-Coleman of Detroit was present but didn't vote.

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 in the 110-member chamber that has one opening.

It needed a three-fourths vote from both chambers of the Legislature -- including 29 votes in the Senate -- to win approval because it amends a voter-approved initiative that created the three Detroit 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 for the state 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 for their legislation.

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 Lennon in 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 the video lottery machines. It also has an incentive for the three Detroit casinos -- MotorCity, MGM Grand and Greektown -- to build permanent hotels.

But the casinos have fought the higher tax, arguing that it would cost workers their jobs and stunt Detroit's economic development.

However, without it, lawmakers will have to find another way to help resolve the projected $1 billion deficit in next year's spending plan.