Fine To Equalize - On The High Side

Of all the taxes the city of Spokane imposes, which one should be reduced first?

The 17 percent utility tax, one of the highest in the state? The business license tax, increased just last year? Property taxes?

Nope, the city is considering a cut in its tax on gambling.

This, at a time when the city doesn’t have enough money to fix all the potholes in its streets.

This, at a time when gambling in the city has exploded and police have not yet assessed the impact, which may be expensive. From Deadwood, S.D., to Mississippi’s Gulf Coast, gambling booms elsewhere around the country have been followed by costly increases in social dysfunction and crime. Costly in dollars and costly in family stability.

The pressure for a cut in the gambling tax comes from City Councilman Jeff Colliton, who works for a pull tab distributor. Colliton has said he won’t vote on the proposal, given his link to the industry, but that didn’t stop him from sending a memo soliciting the support of council colleagues.

Colliton notes that tax rates on gambling are lower outside city limits. He wants city tax rates lowered to the county’s level.

A level playing field is a good goal in tax policy - assuming the industry taxed is one the community wants. While gambling does create jobs and tax revenues, its social impacts raise a question: Should a socially healthy community promote gambling with low taxes or keep a lid on it and tax it heavily?

Regardless, the city of Spokane’s current tax on gambling has not caused the gambling industry to wither or leave. Beginning this year, thanks to state legislation that allowed cardrooms to expand so they could compete with Indian casinos, the gambling business has boomed in the city of Spokane. Outside city limits, where tax rates are lower, gambling has not grown as rapidly - although that may change.

So, there is no evidence the city’s taxes have unduly crippled the gambling industry. Indeed, the gambling boom made the city’s gambling tax a needed blessing to the city’s barren treasury. The city expected $150,000 from the tax this year but instead revenue is pouring in at a pace that could exceed $800,000 by year’s end.

That’s enough to fill more than a few potholes. It’s enough to help deal with an increase in larceny and drunken driving, if such problems materialize as gambling grows.

As for Colliton’s request that the playing field be leveled, there’s a better way to do so: Raise the county’s gambling tax, to match the city’s. County government, like the city, has a list of unmet needs. Gambling taxes should be fair - and, they should be high.