Legislation allowing Hot Springs voters to pledge casino gaming tax receipts to repayment of debt issued for capital improvements or economic development projects unanimously cleared the state Senate Wednesday.
Senate Bill 471 enables local governments receiving tax revenue under the state Constitution's casino gaming amendment to secure debt with the proceeds. The implementing ordinance would be subject to a local ballot referendum asking voters to approve the bond issue.
The bill's sponsor, Sen. Keith Ingram, R-District 24, of West Memphis, told the City, County and Local Affairs Committee the debt program would be similar to how local governments use advertising and promotion commission tax proceeds to finance capital improvements.
City voters authorized up to $2 million in bonds for the construction of an exhibition hall at Mid-America Science Museum in a September special election. Proceeds from the 3 percent sales tax the Hot Springs Advertising and Promotion Commission levies on prepared food and lodging inside the city were pledged toward the repayment of the debt.
"It's the same exact thing for casino gaming revenues," Ingram told the committee. "Cities could use it the same way they use the A and P tax."
The constitutional amendment voters passed in November granted casino gaming licenses to Oaklawn Racing and Gaming and Southland Park Gaming and Racing in West Memphis. The state has said it expects the Arkansas Racing Commission to license the casinos by July 1. Two additional casino licenses were reserved for Pope and Jefferson counties.
Oaklawn presented the Hot Springs Planning Commission with a site plan Thursday in support of its application to amend its conditional-use permit to include a 28,000-square-foot expansion of the gaming area, 14,000-square-foot event center and 200-room hotel. The plan is part of the $100 million expansion Oaklawn announced after passage of the casino gaming amendment.
The city receives 1.5 percent of net wagering revenue from the tax on games of skill city voters approved in a 2005 special election, netting $2.15 million last year. It expects the new distribution formula to raise up to an additional $1.5 million.
It will take effect after Oaklawn is granted a casino license, entitling the city to 19.5 percent of the tax levied on net gaming receipts. A 13 percent tax will be applied to the first $150 million of net gaming receipts, increasing to 20 percent on annual receipts of more than $150 million. The state will receive 55 percent of the tax, and Garland County will get 8 percent.
The city projects its distribution will exceed $3.5 million annually. Development of an infrastructure fund supported by the distribution is one of the objectives the Hot Springs Board of Directors adopted for the 2019-20 term. Ingram's bill allows the tax revenue to secure debt issued for broadband internet deployment, which cities can now participate in as a result of a bill the Legislature passed last month.
Local on 03/15/2019
Print Headline: Bill allows cities to use casino tax to secure debt