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THE MICHIGAN CHRONICLE
May 23-29, 2012
Page B-14
A good bet for new
Michigan jobs and investment By George Strand
I
Michigan Voters Will Decide The collection of the required 322,609 voter signatures statewide is underway to determine if the casino initiative can be placed on the November 6, 2012 general election ballot. If successful, the ballot initiative will amend the Constitution of the State of Michigan allowing the addition of the eight casinos. The deadline to collect and verify the signatures is July 9th.
t’s hard to get a large group of people to agree on anything these days. One thing Michiganders seem to share agreement on is the importance of jobs, revenue and investment growth to the state’s recovery efforts.
So it’s not surprising that ever-present discussions and debates on what will help grow the state’s economy now include questions regarding not only whether casino gaming should be expanded in Michigan, but how many additional locations should be approved, their location and the structure under which they should operate. Casino supporters reference the growth of the gaming industry nationwide and, with expansion, its ability to play a major role in revitalizing and transforming Michigan. Proprietary economic and demographic impact studies reviewed by the Michigan Chronicle Newspaper seem to validate the supporters’ premise that casino gaming has room to compete in Michigan’s casino market. Of course, not everyone agrees, including James Nye, a spokesman for a coalition of tribes and Detroit casinos preparing to fight the Michigan First effort. The group, Protect MI Vote, is fighting the effort to expand casinos. According to Nye, the casino expansion would circumvent state voters’ approval of the 2004 constitutional amendment requiring both statewide approval of non-tribal casino expansion and approval of local voters where a casino would locate. Jobs, Jobs, Jobs New jobs and increased state and local revenue are among the primary benefits to adding eight new casinos proposed, according to the state-wide developer group, Citizens for More Michigan Jobs (CMMJ). Michigan currently has 22 tribal casinos in addition to three in Detroit. The proposed CMMJ casino locations are Detroit, Pontiac, Romulus, Macomb County’s Clinton Township, Grand Rapids, DeWitt Township (near Lansing), Birch Run Township (in southern Saginaw County) and Clam Lake Township (near Cadillac). CMMJ has conducted extensive economic and demographic impact analysis on the state’s growth projections to support local gaming to include hotel, retail, dining and entertainment offerings as well as auxiliary businesses that will benefit from the gaming establishments. Their proposal represents planned economic and community development that will contribute to the quality of life in the state where residents live, work and raise their families. The eight CMMJ casinos will create an estimated 16,000 permanent jobs in the state including approximately 4,200 high paying union jobs in Detroit comprised of 3,000 permanent full-time and 1,200 construction jobs, according to a CMMJ spokesperson who emphasized that Detroit residents will have the first opportunity for the Detroit casino jobs, and Wayne County residents outside of Detroit will have the second opportunity to be hired. Proposed Expansion Promises New Revenue Reported projections point to significant state and local tax benefits with the proposed casinos. In 2010, the twenty-two tribal casinos contributed $61 million in state and local taxes; the three Detroit casinos paid $100 million in state taxes and $164 million in taxes to the city of Detroit. CMMJ estimates that the new casinos will contribute an additional $300 million annually to the state and local governments, funding which will benefit schools, police and fire, public safety and road repairs. Tax revenue generated from the new fourth casino in Detroit is estimated at $226 million according to the 2010 Innovation Group’s Study.
Adding the eight casinos rests with Michigan voters. By state law, the majority of the voters in the state must vote “Yes” to approve amending the state Constitution. In addition, a majority of the voters in the eight proposed casino sites must also vote “Yes” to approve the amendment before a casino can be built in that community. For any of the individual casinos to go forward, the proposal would need to have a majority of “Yes” votes in that community in addition to statewide approval.
The Detroit Casino Partnership at a glance: ■T he Detroit Casino Partnership (DCP) was formed to promote the development of a fourth private casino and entertainment establishment and hotel in downtown Detroit via a coalition sponsoring the Citizens for More Michigan Jobs (CMMJ) ballot initiative in the November 2012 general election. If successful, these casino operators will join the three privately owned casinos in Detroit and the 22 Native American-run operations throughout the state. ■ I ncrease Tax Revenue: Detroit has one of the lowest tax rates on gaming in the country, which is currently at 19%. CMMJ’s proposal would increase the tax to 23 percent, which will directly benefit Michigan schools, roads and bridges, police and fire services and local government ■S upport Job Growth: DCP is dedicated to K-12 education and creating thousands of good paying union jobs in Detroit and Michigan.
Casino Tax Structure in Detroit Brings Investment With a formula that increases Detroit’s tax distribution, the new casinos would have a major impact on their local residents and community, according to supporters. All casinos authorized under Michigan Law will pay a wagering tax on their adjusted gross receipts in the amount of 23%. Adjusted gross receipts are minus the winnings paid to wagers. Revenue generated by the wagering tax from casinos within the city of Detroit will be distributed as follows: • 60% to fund police and fire services in the city of Detroit • 20% directly to fund K-12 schools throughout the state of Michigan • 20% to the state of Michigan to fund road repairs and construction throughout the state Tax Structure Benefits Other Casinos With the exception of casinos located within the city of Detroit, revenue generated by the wagering taxes will be distributed as follows according to the proposal: • 30% directly to K-12 public schools state-wide
■E ntertainment Destination Support: The DCP believes the city of Detroit deserves a more competitive gaming and entertainment destination. DCP’s goal is to offer local, regional, national and international customers a “best-of-class” gaming, fine dining, shopping and entertainment experience in Detroit.
• 20% directly to all municipalities including counties throughout the state to fund public safety police and fire services
The statewide signature drive is the first step to creating new jobs and increasing revenue in an under-tapped entertainment and gaming market. While much is being written and discussed on whether the state is already at full capacity for gaming, people needing jobs and living in communities faced with shrinking revenue for core services will decide.
• 5% to the state of Michigan to fund road repair and construction throughout the state
Increased Gaming Tax Contributions Will Shore Ailing Economy CMMJ’s proposal increases the state’s Gaming Tax rate from the current 19-percent to 23-percent with a formula that increases Detroit’s distribution to sixtypercent and decreases the State’s to forty-percent. This would mean an estimated $56 million annually for Detroit’s fourth casino and as much as $50 million in additional tax revenue from the three existing casinos, with tax revenue dedicated to Detroit’s police and fire. Additionally, the state taxes are dedicated to K-12 education and road repair. The seven Casinos outside of Detroit have a different gaming tax formula for the 23 percent that includes the host city, host county and additional state-wide funding for K-12 education, police and fire, and gaming addiction.
• 20% to the city, township or village in which the casino is located • 20% to the county in which the casino is located
• 5% to the state of Michigan to fund gambling addiction and prevention programs throughout the state Detroit Casino Partnership With more than one hundred local investors, Citizens for More Michigan Jobs includes the local development team of the proposed fourth casino in Detroit, the Detroit Casino Partnership (DCP). “DCP ownership is local and the revenue we generate here will stay here in Detroit,” according to its key investors, who include Detroit funeral director O’Neil Swanson, Four Tops singer Duke Fakir, boxing promoter Emanuel Stewart, radio personality, Cablevision Executive and DCP Manager Wade “Butterball Jr.” Briggs and DCP CEO Andrew McLemore, Jr. The Detroit Casino Partnership’s plan will “raise the bar, creating a much broader entertainment experience for the customer,” say its members. “Tourism is Michigan’s second largest industry, and yet Detroit has not realized its full potential as an urban entertainment destination. Assets like sports teams and events, our international border, and a long music history can be leveraged to make Detroit more of a destination. We see the job growth for Detroit extending far beyond the walls of our facility.”
“DCP ownership is local and the revenue we generate here will stay here in Detroit.”