NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
Website. The Adobe PDF version includes
all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be
obtained from the LFC in
SPONSOR: |
Rawson |
DATE TYPED: |
|
HB |
|
||
SHORT TITLE: |
Race Track Cost Deductions |
SB |
162 |
||||
|
ANALYST: |
Neel |
|||||
REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
$1,900.0 |
$1,900.0 |
Recurring |
General
Fund |
|
($1,900.0) |
($1,900.0) |
Recurring
|
Race
Tracks |
(Parenthesis
( ) Indicate Revenue Decreases)
No
Responses Received From:
Taxation and Revenue Department (TRD)
Responses
Received from:
State
Racing Commission
SUMMARY
Synopsis
of Bill
Senate Bill 162 would eliminates the 2%
pari mutuel capital improvement tax credits at all
Significant
Issues
Currently
improvements to their facilities, and in cases of Class A racetracks, to offset certain marketing expenses. During FY02, racetracks generated $1.9 million in capital improvement tax credits.
FISCAL IMPLICATIONS
According to data provided by the Racing Commission, elimination of tax
credits would yield approximately $1,900.0 to the general fund.
The pari-mutual tax, less allowable offsets is deposited in the general
fund; except that up to $50.0 of the amount generated from a track located
within a municipality may be transferred to the that municipality. The amount of the municipal transfer is
determined by TRD.
OTHER SUBSTANTIVE ISSUES
According to the Racing Commission, racetracks made over $44 million in approved capital improvements to their facilities since the inception of the legislation. The average payback period for the racetracks ranges from two to five years
It should be noted that the four racetracks have turned into profitable enterprises with net income of $4.3 million and $5.6 million for tax year 2000 and 2001 respectively. For tax year 2002 net income based on two of the four racetracks reporting was in excess of $14 million.
POSSIBLE
QUESTIONS :
Are tax incentives for profitable businesses the most efficient use of public funds?
SN/njw:prr