IA Tax Hike Could Jeopardize Lyon Co. Casino
February 10, 2011, 6:06 PM
LYON COUNTY, IA -
The developers of the Grand Falls Casino have a meeting scheduled with Iowa's governor next week to talk about a proposal they say would jeopardize their project in Lyon County.
Newly-elected Republican Governor Terry Branstad wants to increase taxes on all casinos in the state.
Governor Branstad's office says he is committed to his campaign promise of cutting corporate taxes in half to draw more businesses and jobs to Iowa.
But, to make up for that lost revenue Branstad wants to increase taxes on casinos from 22 percent to 36 percent. Grand Falls developers say the proposal would throw a wrench in their plans, and would not only kill the project but also the hundreds of jobs it would bring.
"It could have a dramatic affect on it if there's a suspension on construction activity," project manager Steve Leavitt said.
The casino is now less than four months from opening, but Grand Falls executives say a tax increase on gambling income would add up to an extra $8 million a year, which seriously jeopardizes their business plan and the project.
"It's a huge difference in the financial proforma of a facility, and a lot different than what the investors looked at when they made their decision to invest in the property in the first place," Leavitt said.
Iowa casino owners will meet with the governor next week, but since this is just a proposal crews will keep working while state leaders work out the details in Iowa's capitol.
"We're still going full steam at this time unless something changes. This proposal hasn't passed yet. If it would it may change something dramatically. I hope not," Leavitt said.
When KELOLAND News asked Governor Branstad's communications director about the claims that the tax increase will kill the Lyon County project, he responded by saying Iowa's casinos will do just fine even if they are taxed at 36 percent.
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