JACKSON - The question before the House (and the Senate, too) as lawmakers search desperately for money to adequately fund state services is:
Has Mississippi's 12-year-old gaming industry become immune to paying more taxes under the doctrine of "Don't kill the goose that laid the golden egg?"
That doctrine is why spokesmen for the casino crowd say "don't tax me, tax that guy behind the tree" if you absolutely must put more tax money into the state's revenue stream to keep health, welfare, education and many other key services Mississippians need from being badly hurt.
Somewhat surprisingly, it wasn't until the current 2003 legislative session, with the state deep in the red, that lawmakers began to pay attention to raising the state's 8 percent tax on gaming revenues put on back in 1990.
With the Legislature seemingly committed to funding all education programs in one bill that will take 62 percent of all general funds, there'll be slim pickin's left under existing taxes to fund all other government services.
Though lawmakers say not in an election year, you can bet the entire tax structure will have to be put on the table, the gaming tax among them.
Legislative sponsors of Mississippi's 1990 gaming law modeled it closely on the Nevada law, installing a free-market system of gaming licenses and intentionally keeping the state tax rate lower than up-river states in order to attract the Las Vegas industry heavyweights.
Now rattling around in the House Ways and Means Committee are two bills to hike the tax to 12 percent for two years, then scale it back to 10 percent for two years in 2005, restoring the 8 percent rate in 2007. So far neither has gone anywhere. Evidently the gaming industry lobby is content.
A bit of history: Legal riverboat gambling amazingly had slipped under the powerful Mississippi Baptist Convention radar screen in 1990 and found its way onto the state law books - while the powerful Baptist lobby was fixated on killing a proposed state lottery.
For a state considered the buckle of the Bible Belt, legalizing casino gaming had been thought to be as likely as making the Mississippi River run south to north, rather than north to south.
Actually, it was Ole Man River that got this whole thing started: Folks in Natchez were being hard hit by a loss of tourist revenue and in danger of even worse times because Iowa upstream had legalized riverboat casinos.
That argument, when presented to the Mississippi Senate by Sen. Bob Dearing, persuaded the country boys to go along with his "local and private" bill to let gaming boats dock in Natchez. By the time Dearing's bill was given a virtual body transplant in the House, Mississippi had riverboat gaming big time and the boats didn't even have to run.
At first only counties bordering the Mississippi River could get into the floating casino action, but soon the Gulf Coast delegation got lawmakers to come back and give their counties on the Mississippi Sound a piece of the same pie.
Voila! You have Las Vegas South right here in Magnolia Land, and almost overnight we have become the third biggest player in the nation's gaming industry.
Meantime, while Bible-belters out at forks of the creeks - from Hushpuckena to Hot Coffee, from Shuqualak to Soso - are less than happy they have such a big "sin" business inside their state's borders, they expect it to put big bucks in the state coffers.
Invariably, judging from questions that come in on ETV's "Statewide Live" when state finances are discussed, folks think the advent of legal gaming was supposed to pay most of the bill for education. Always they must be told the gaming tax is not dedicated by law to education, but goes into the state's general fund for various uses, education among them.
Still, the public needs to be brought in on the debate on whether or not the $165 million which the state now collects from the state gaming tax is a fair share of the total tax burden for a $3 billion industry, given that gambling is the most grievous of the three "sins" (others - cigs, booze) we tax.
Rep. Joe Warren, D-Mt. Olive, a 24-year legislative veteran who heads the House Education Committee, said he sponsored a hike in the state gaming tax to "give the casinos an opportunity to help us in a time of dire need."
Significantly, Warren added, "Almost 70 percent of the dollars spent at the casinos come from visitors who live outside the state of Mississippi, not from our own people."
Warren said his bill, with Rep. Mike Lott, R-Petal, as a co-sponsor, would raise $96 million per year the first two years, with all but $4 million earmarked for the K-12 education program. When the rate would drop to 10 percent after two years, he estimated it would raise $70 million.
"I pegged $4 million to go to the Bureau of Narcotics, because the agency was cut that much in the current budget, causing a serious shortage of narcotics agents for such rural counties as mine (Covington) where drugs have become a major problem," Warren declared.
Naturally, the casinos oppose any increase in the 8 percent state tax rate. They contend they are actually paying 12 percent in gaming taxes, counting the 4 percent which counties where they are located can add on.
The gaming industry likes to hang its hat on a study two years ago, "Gaming in the Mississippi Economy," put out by the University of Southern Mississippi which contended that a 4 percent increase in the state tax rate would likely put three unnamed casinos, and possibly a fourth, out of business and actually cause a loss in revenue.
Critics of the USM study insist, however, that the report was subsidized by the gaming industry.
Another report called "Biloxi Blues," done by the Working for America Institute focusing on lower-wage workers in the Mississippi Gulf Coast hospitality industry, was much less favorable to the area's gaming industry.
It points out that waiters and waitresses' median hourly wages are 11 percent lower in Biloxi than in Las Vegas, that cooks' wages are 24 percent lower, and maids and housekeepers are paid 33 percent less. One difference is that workers are unionized in Las Vegas, and not in Biloxi.
Danny McDaniel, a Jackson attorney who represents much of the state's gaming industry, contends that the 30 casinos in Mississippi, including their hotel properties, proportionately contribute more in tax revenues than any other corporations in the state.
"I estimate they generate some 30 percent of their gross income into tax revenues," McDaniel declared.
