By Sharon Michael, The Chronicle, 7/15/98
Centralia city councilors split 3-3 Tuesday night on a vote to increase the gambling tax rate on commercial punchboard and pull tab operators.
Councilor Bill Moeller was absent because of illness.
The gambling tax increase was one of several revenue-generating mechanisms approved by the council to balance the 1998 budget
But on June 23, tavern owners convinced the council to table the proposed new gambling tax ordinance while Finance Director Brad Ford looked at taxing commercial operators on gross receipts minus the cost of prizes.
The 1997 state Legislature changed the taxation of punchboards and pull tabs for charitable or nonprofit operators from 5 percent of gross receipts to 10 percent of gross receipts, less merchandise prizes and cash payouts.
The new law gives local governments the option of applying the same tax formula to commercial operators. But it allows them to continue to tax for-profit operators at 5 percent of gross receipts.
Commercial operators argued to be taxed on gross receipts, minus prizes, but still at the 5 percent rate. They now pay 3 percent tax on gross receipts.
Ford said there would be virtually no difference in tax bills for commercial operators taxed at 5 percent of gross receipts, or at 10 percent of gross receipts, minus prizes.
But tavern and bowling alley owners want the city to set the tax at 5 percent of gross receipts minus prizes. That would reduce their taxes - and the city's gambling tax revenues from current levels.
''Why are we always targeted for more tax?'' asked Benny Kostick, owner of Fairlane Bowl on Gold Street.
Kostick hit a chord with Councilor Tim Browning, also a business owner.
''What we are really talking about is 13 businesses we're asking to carry the whole load,'' Browning argued.
He said utilities companies have the ability to recoup increased costs through rate increases, but ''these owners don't.''
The council also recently increased business and occupation taxes on utilities companies, including telephone and cable companies.
Browning, Bonnie Canaday and George McCarty voted against the gambling tax ordinance Tuesday night.
''I don't like taxes that target actual activities,'' McCarty said.
He is afraid the increase would cause business failures.
City Manager Tom Reber said he will be back to the council July 28 with a new ordinance to change the tax formula for nonprofit operators, as required by statute.
Meanwhile, Reber and Ford will seek other revenue sources to replace the $50,900 in increased gambling tax revenues expected to come from a higher tax on commercial operators.
In other business Tuesday, the council:
- Formally approved the final consent decree settling the city's lawsuit against the state Department of Ecology over wastewater discharge permit conditions, and authorized the mayor to sign the final decree.
- Voted to keep the Tower Avenue police substation open until Jan. 1, or until the new Union Depot office is ready to house the substation.
- Ratified an agreement with CCTV that allows the public access television station to continue operating and guarantees $7,500 per quarter from the city at least until the end of the year.
The city is seeking proposals from other potential operators.
- Named McCarty as Centralia's representative to the executive committee of the Lewis County Flood Control Project, and designated Browning as an alternate.
- Set July 20 for a council workshop on emergency transport.
- Set Aug. 25 for Reber's performance review.
...
Sharon Michael covers Centralia and Chehalis city governments for The Chronicle. She can be reached by e-mail at smichael@chronline.com or by calling 807-8237.
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