Wednesday, July 7, 2004 | 9:14 a.m.
LANSING, Mich. -- A bill to raise the wagering tax on Detroit's three casinos is headed to a House-Senate conference committee after the chambers failed Tuesday to agree on how much it should be increased.
The state Senate voted 29-7 to raise the tax by one-third -- from 18 percent to 24 percent -- after a Democratic senator switched his vote, enabling the chamber to pass the increase on a second attempt.
But the House, which had already passed a bill doubling the tax to 36 percent, voted 89-15 to reject the Senate version. The legislation now goes to a House-Senate conference committee.
Detroit's three casinos -- MotorCity, MGM Grand and Greektown -- criticized the Senate for approving the tax increase. Casinos said the increase would cost workers their jobs and stunt Detroit's economic development.
"It's a huge hit," said Tom Shields, spokesman for Atwater Entertainment, part-owner of MotorCity. "It hurts our ability to set aside money for future development."
The legislative action came after the Senate sent state troopers to collect two absent Democratic lawmakers, Sens. Virg Bernero of Lansing and Martha Scott of Highland Park.
Bernero was on Mackinac Island and Scott was in Detroit attending a family funeral, said Bill Nowling, spokesman for Senate Majority Leader Ken Sikkema, R-Wyoming.
Neither had arrived by the time the Senate held the second vote on the casino tax. The Senate sent a plane to pick up Bernero but called it back after the bill's passage.
Senators already in attendance were locked inside the chamber.
Sikkema ordered the rare call of the Senate shortly after the casino measure failed by one vote earlier in the day.
"I don't relish doing this," Sikkema said. "But we had to get the job done."
The measure passed with the minimum required to amend the voter-initiated law that authorized the casinos. Democratic Sen. Dennis Olshove of Warren switched his vote.
"I wanted to move the process along and make a point," Olshove said.
Olshove was worried the bill dooms so-called "racino" legislation, which would allow Michigan's seven horse tracks to have video lottery terminals.
Olshove said he received assurances that the racino concept is not off the table.
Rep. Larry Julian is a Republican from Lennon who originally amended the bill to double the tax on the Detroit casinos. He said he's not happy with the Senate version of the bill.
"We passed it out of here at 36 percent, why in the world would we concur at 6 percent?" he said. "Six percent is not satisfactory in my opinion and I encouraged all of our members to vote 'no'."
Democratic Gov. Jennifer Granholm might consider a casino tax increase if it's part of a budget solution that protects her priorities, spokeswoman Liz Boyd said.
The Senate proposal would give the casinos an incentive to build permanent structures by dropping the tax from 24 percent to 21 percent once the new buildings are in place, Nowling said.
The proposal initially calls for the state to get two-thirds of the new revenue, while Detroit would get one-third, Nowling said. If new buildings including hotels are constructed, Detroit would keep its share until 2006 and the state's portion would decline.
"We want to make sure there's an economic incentive for them (the casinos) to follow through on their commitment to the city," said Minority Leader Bob Emerson, D-Flint.
But state Sen. Shirley Johnson, a Republican from Troy, criticized the measure as letting the casinos derail a separate proposal to allow slot machines at horse racing tracks.
"Why would we allow them the opportunity to kill racinos by accepting a deal that takes the taxes and reduces them?" Johnson said.
The Senate last month rejected the House-approved bill that would double the tax.
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