• Atlantic City could be harbinger for NWI casinos

    In the 1970s, the fading resort town of Atlantic City, New Jersey, got an idea to reverse its fortunes: legalize gambling and create a bastion of casinos that would attract visitors from across the Northeast. It worked pretty well.

    That is, until a lot of smaller communities got the same idea and opened their own casinos, taking customers away from Atlantic City. Now, the city is under emergency management, much like Detroit was before it declared bankruptcy, and there’s much speculation that Atlantic City is on the same path.

    The casino industry in Northwest Indiana is hardly Atlantic City, which at its peak was revered as the East Coast’s Las Vegas. Still, the same fate could very well come to pass here, and it would still hurt on some level.

    Despite casinos being the most lucrative business in Lake County, the Horseshoe and Ameristar only employ about 2600 people between them, which is a relatively small amount in a population of nearly half-a-million. But as I’ve discussed before, the big thing casinos bring to the state is tax money. Lots of it.

    Every time Chicago faces a budget problem, talk of legalizing gambling in the city comes up, and the Region casinos all hold their breath. So far, it’s never come to pass, but it seems more like a matter of when, not if, the city comes around to it. Several other states have legalized it in some form, if not outright. Online gambling is thriving so well that some states are proposing laws taxing it. Heck, pro sports, one of the last institutions you’d think would want to get involved with gambling, are opening up to it.

    Should Chicago ever finally implement gambling, and—God forbid—draw away enough customers to put Northwest Indiana’s casinos out of business, there goes a good chunk of local tax money. Making up for that shortfall would require a) instituting a new tax elsewhere, b) accepting the shortfall and possibly going into the red, or c) cutting yet more services. In any case, it will affect residents.

    Maybe this will happen soon, maybe it’s a long way off. But it seems like a fool’s bet to say it won’t ever happen.

  • Does the state win in the lottery?

    I wrote a while ago about how if Chicago were to ever get its own casino, it could siphon gamblers away from casinos in Northwest Indiana, and lots of tax revenue with them. Well, the exact opposite is happening lately, at least in the one bastion of gambling most states agree is okay: the lottery.

    You’ve probably heard recently that the Illinois Lottery has been unable to pay winners above a certain amount. Apparently, such a turn of events is sending avid lottery players across the state line to partake in the Hoosier Lottery.

    Is this good for our state? And going further, does the lottery in general benefit Indiana? I’ve looked before at how casino taxes make up a good chunk of state and local tax revenue, but not the lottery.

    Well, according to the Hoosier Lottery website, the state’s total revenue from the game in the fiscal year of 2013 was $224,500,003. The state’s figures back up those numbers. That’s around 1.5 percent of the total revenue the state raised in the same time.

    By state law, revenue collected from the lottery goes to teachers’ retirement funds, local police and fire department pensions, and the Build Indiana Fund, which funds all sorts of projects. The Hoosier Lottery Site even has an interactive map where visitors can see how the money’s distributed across the state’s counties.

    It’s a smaller chunk of change than casinos bring to the state, but yes, the lottery definitely does benefit the state.

    On a final note, I feel I should clarify that Illinois’ lottery woes aren’t what many people seem to think: it’s their current budget impasse that’s legally tying their hands, not the fact that they don’t have the money (a conclusion to which I jumped when I first heard the news). Still, with the state so dysfunctional that they can’t even keep up their lottery, maybe an Illinois casino isn’t as likely to happen anytime soon as I might have feared.

  • Of teens and vaping

    people society culture taxes vaping

    Indiana’s western border towns may soon no longer be the destinations they have long been for Illinois smokers.

    Currently, taxes on cigarettes in our state stand at $0.99 per pack, half that of Illinois. But there is talk in the statehouse about increasing that by a dollar, which would actually push taxes a cent higher than our westward neighbor.

    Supporters are touting the potential for reducing smokers in the state. But the taxes will likely go toward fixing state roads, and to me, that seems like a more likely reason this has come up than public health. Roads are paid for through gasoline taxes, which no politician wants to raise and become the bad guy in the eyes of the public. But raising taxes on something commonly despised, like cigarettes, is often okay by most voters.

    Maybe such a ban would reduce the number of smokers in Indiana. But as our state picks up this old fight, there’s some disconcerting news from the new frontier of smoking: Apparently, 70 percent of teenagers are exposed to advertising for e-cigarettes, which is not subjected to heavy restrictions like that for tobacco products. What’s more worrisome about this is that perception seems to be that e-cigs or “vaping” aren’t harmful like regular smoking (on that note, does anyone else remember vaping being advertised as a way for smokers to wean themselves of their addiction, or did I just imagine that?).

    Taking on e-cigarettes today is trickier than it was for tobacco. Banning TV commercials and regulating print ads may have been a big step in yesteryear. It still might be, but the world is a little different today. The Internet and social media are enormous marketing tools, users of which tend to skew younger. Frankly, it’s hard to regulate that without getting into some free speech issues.

    Short of outright criminalizing it, treating it like tobacco—mandatory warning labels, taxes, and bans in public places—and hoping for the best might be all we can do. Once a person reaches adulthood, if they still want to vape knowing the hits their health and wallet will take, it’s on them.

  • Region ignored? Numbers tell a different story

    There’s always been the sort of mentality in Lake County that The Region is the forgotten stepchild of the state of Indiana, always last to be considered for state funding. Last week, I discussed how a large majority of local casino tax revenue goes to the state over local governments. That got me thinking: is the old idea about Lake County true? Do we really get less from the state than we pay into it?

    According to the numbers, it turns out we get more.

    In a 2010 report by the nonprofit Indiana Fiscal Policy Institute, at the time of the last U.S. Census, Lake County paid a total of more than $890 million in taxes. That’s the second highest amount paid by a single county, behind Marion County. However, the same year, Lake County received over $1 billion in state expenditures. The shortfall between taxes and spending for the county amounted to $186 million, the largest in the state.

    The Horseshoe Hammond and Ameristar in East Chicago bring in about $200 million a year in revenue for the state. If yearly taxes and state expenditures for Lake County are similar to the report, then it’s safe to say that the county’s shortfall would more than double if the two casinos were taken out of the equations.

    It should be noted that only 22 of the state’s 92 were in the black in the report. Also, on a per capita basis, Lake County’s shortfall was on the smaller end because of its population size. So it's not like we're getting spoiled (though interestingly, Marion County, the leader in population, tax revenue and stat expenditures, was in the black).

    The report also points out that certain expenditures are the responsibility of each county, and counties can enact their own taxes to fund local projects. For example, last year Lake County passed an extra income tax to help fund schools.

    But going back to my initial question, no, Lake County is not the neglected corner of the state some might think it is.

  • Social welfare, Scandinavian style

    The general belief among proponents of social programs is that the best way to pay for them is to tax those with more money. Yet there is a model for funding such programs that passes the cost onto the consumers, so that they pay for services in a more direct manner.

    This would be the Scandanavian model. In Norway, for example, the purchasing cost of regular goods is significantly higher. But there’s a reason for it: it’s heavily taxed to pay for the many social programs, including universal health care and free education, including college.

    That same article points out that such direct taxation is being used on a much smaller scale right here in the U.S. at the local level, funding social programs in towns and cities. It also suggests that such a taxation model could work for this country on a larger scale.

    I highly doubt it. While this model might work on a smaller scale, such as small towns funding something they’ll use locally, I don’t see people going for such funding at a statewide or national level. Simply put, the attitude of “Why should I pay for someone else?” is all too common in America, even if the thing they complain about actually benefits them as well as others. Same goes for the overall distrust of government programs, however illogical.

    But it’s not just a perception problem; high taxes can be a legitimate burden. I wrote recently of the high taxes driving residents from Illinois. Additionally, Illinois is raising taxes just to keep the state from going bankrupt. I imagine that a state instituting such a tax experiment will be met with a similar exodus, no matter how well-intentioned the reason for the tax may be.

    That’s not to emphatically state that the Scandinavian model is bad. On the contrary, I’m all for members of a community working together to help each other. I just have my doubts that that sense of community extends far enough for it to work on a much larger scale such as states.

  • Sunday Alcohol Sales Ban: A Retrospective

    Indiana Sunday Alcohol Sales Laws

    As Hoosiers, we are well aware of the ban of alcohol sales on Sundays.  Last February, it looked as if the law may finally change, but the measure met its usual fate.  Although Sunday sales were backed by big-box grocery stores such as Walmart and Kroger, the measure was opposed by liquor store owner. They have argued that the costs of being open on Sundays would not provide enough additional revenue [1] and that allowing sales on Sunday would put liquor stores in danger of going out of business [2].  The bill also died due to the restrictions that the state wanted to put on displaying alcohol and its placement in stores.  Liquor would have had to have been kept behind a counter and beer would only be allowed in designated areas [3].  As a result of these restrictions, the measure lost favor from big box stores, due to the costs of remodeling to accommodate these requirements.  

    So how did Indiana become one of 12 states to ban sales on Sundays in the first place?  The ban on Sundays is what is known as a “blue law”.  A blue law is a kind of law that prohibits certain activities occurring at certain times [4]. This particular blue law has been in place since the end of prohibition in 1933. These laws are also a sign of their times.  For example, one blue law that was enacted in Illinois banned the sale of ice cream sodas on Sundays, because soda was actually considered a controlled substance in the late 1800’s, due to it being marketed as a “miracle cure” [5].  For soda jerks to remain open on Sunday, they added chocolate syrup in lieu of soda, hence the invention of the Sundae.

    Although frustrating to many people in our state, sales in restaurants, bars and microbreweries are not banned on Sunday. A 2010 law allowed microbreweries to sell Sunday carryout beer, provided that the beer is brewed on that site [6]. For around $11, anyone of legal drinking age can purchase a growler (64 ounces) of beer to take home with them.  Since this time, many new microbreweries have opened around The Region, including 3 in Valparaiso.

    In a time when many households, such as ours, have both a husband and wife who work full-time, something as simple as going to the grocery store can become complicated. Since Sunday is also one of the busiest shopping days of the week, some opt to do their shopping on this day, but may have to make an extra trip on a different day to purchase alcohol. So the question now becomes is this blue law still going to be able to remain in place for the foreseeable future? Once again, we will have to wait until next year.

    References:

    [1] http://www.courier-journal.com/story/news/local/indiana/2015/02/24/indiana-lawmaker-kills-bill-legalizing-sunday-alcohol-sales/23947273/

    [2] http://www.usatoday.com/story/news/nation/2013/01/19/indiana-strict-on-sunday-booze/1566476/

    [3] http://www.indystar.com/story/news/politics/2015/02/24/sponsor-sunday-alcohol-bill-enough-votes/23930769/

    [4] http://legal-dictionary.thefreedictionary.com/Blue+Laws

    [5] http://xmb.stuffucanuse.com/xmb/viewthread.php?tid=7396

    [6] http://www.wndu.com/home/headlines/Breweries-booming-with-Sunday-business-264184251.html

     

  • Weighing wheel and gas taxes

    Tonight, Valparaiso’s City Council will vote on imposing a proposed wheel tax on vehicles registered in the town. Recently, a few other cities and towns in Northwest Indiana have added wheel taxes, and more are considering it.

    The impetus for this issue was the state’s road funding bill signed in March, a provision of which allowed cities with a population of 10,000 or more to impose such taxes on vehicles to fund road repair and maintenance. The state also pledged to match the amount raised by each town or city, setting aside money for such funding.

    Valpo’s proposed tax would be $25 per passenger vehicle and $40 per commercial vehicle, and would be collected during BMV registration. That’s an annual fee, by the way.

    Usually, roads are funded through gasoline taxes, but raising them at the state or federal level has been received…well, about as well as you’d expect a tax to be. A yearly wheel tax that costs, depending on the vehicle, a little more or a little less than a regular fill-up seems a lot more palatable than paying extra at the pump each time.

    So, what’s the downside? Well, less money raised in taxes, naturally, means less money for roads. Even with the state effectively doubling the funds, towns will still come up well short of what's needed to maintain their roads.

    A gas tax increase wouldn’t for sure bridge those budget gaps (a proposed federal increase is estimated to only put a small dent in our needs for federal highway repair). But there’s another component of gas taxes: getting people to use less of it. Specifically, to reduce our driving habits and use public transportation, thus lessening the need for road repair (and also, reduce pollution).

    But, that angle only works if there’s a public transit infrastructure for commuters to use. In the Region, there’s not much.

    So, wheel taxes are what we got. They're not perfect, but they can do some good. If your town doesn’t have one yet, expect to hear more about them from here on out.