http://www.suburbanchicagonews.com/beaconnews/news/8773...GAMINGTAX_S1.article

CITY HEDGES BETS DUE TO DECREASE IN GAMING TAX

• Down $320,000 already: Revenue from Hollywood Casino lags 2007

April 4, 2008
By Dan Campana dcampana@scn1.com
AURORA -- A sluggish start to this year's gaming tax revenue has Aurora officials looking at how they spend the money they receive from Hollywood Casino.

For January and February, the city's portion dropped $320,000 compared to the same two-month period in 2007.
The $2,137,000 received by the city represents the slowest start in three years, according to a March Finance Department report to aldermen.

City spokesman Carie Anne Ergo said officials wanted to see first-quarter figures before "closely evaluating all the programs that are funded through that source."

"Just like any family, if the money isn't coming in, you have to tighten the belt," she said Thursday. "The city is no different."

What that means specifically for programs and projects funded by casino money is likely to be discussed next week, Ergo added.

Yearly gaming tax revenue -- generally used for ward street projects, various social programs and to pay down debt -- has increased each year since 2004.

However, during budget talks last fall, Finance Director Brian Caputo projected a $1.4 million dip in the tax's wager portion because of Illinois' indoor smoking ban.

The city shares the casino tax money with the state, which reported a $20 million revenue drop in February alone when compared to the same month in 2007.

City officials have yet to receive state revenue figures for March, but Tom Swoik of the Illinois Casino Gaming Association expects the downward trend to continue.

"I'm hearing (revenue figures) are down more than they have been," he said.

Although some point to the economy and harsh winter as possible factors for fewer gambling dollars, Swoik maintains the majority of the blame goes to the smoking ban.

NOTE: November and December of 2007 were worse weather than normal and the economy was down then too. There is no mention of decreased gaming tax revenue for that period. The blame goes to the smoking ban!!!
Gary K.

I think the proliferation of smoking bans have caused smokers to find other ways to live and enjoy their lives.

It makes you wonder if non-smokers actually have any economic impact in this country, they certainly aren't rushing out to replace smokers in the economy.

20% of this country enjoy smoking. Only 13% of this country are of AfricanAmerican decent, but look at the impact they have had.

This is the "Law of Un-intended Consequences" at work.
Gary K.

Fuming Over Cigarette Tax. Should smokes cost $6 a pack?

It’s over-taxation, and the legislators are killing the goose that’s laying the golden egg," said Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO).


http://www.smokersclubinc.com/modules.php?name=News&file=article&sid=4685

"States are constantly seeking new sources of revenue, and cigarette tax always comes up as one that is politically more palatable," noted Jim Calvin, president of the New York Association of Convenience Stores (NYACS). "There is always the political cover that it is designed to deter smoking, which would be true if the smoking population were a captive audience. Unfortunately, they are not, so any increase in the cigarette tax is only going to cost us more business and cost them more tax revenue.

And it’s not going to compel anybody to stop smoking, so it’s a lose–lose–lose proposition."

There is "an enormous problem here in New York with cigarette tax evasion," Calvin continued. "More than half of cigarettes consumed by New Yorkers are purchased without payment of any New York State tax (for more, see pg. 64). That has caused extreme hardship for licensed tax collecting c-store operators, and an enormous loss of tax revenue for the state."

Flawed Logic
The ironic part is that, in many cases, states may actually be losing money by raising taxes.

For instance, the number of packs of cigarettes being sold in New Jersey, which has the highest tobacco excise tax in the nation at $2.57 per pack, has been steadily dropping, while neighboring Delaware’s has almost doubled.

Where are the dollars going? The winners are nearby states with lower taxes, bootleggers, Native American reservations and the Internet.
At best, tax increases are an imprecise tool.

Case in point: all 50 states have excise taxes on cigarettes. But of the 40 that increased them between fiscal years 2003 and 2005, only eight met or exceeded revenue projections. Of the 32 that fell short, New Jersey missed by the largest margin, 67%, followed by Wyoming at 59% and Connecticut at 43%.
Next door in New York City, which imposes its own cigarette tax on top of the state’s, a Department of Health study last year found that 57% of smokers had purchased their cigarettes at least once from low-tax or no-tax sources and that more than one-third (37%) of smokers were purchasing low-tax or untaxed cigarettes regularly.