The Lacey City Council Thursday night threw a lifeline to Hawks Prairie Casino, agreeing to lower the city's gambling tax rate for social card games to 7.5 percent from the current rate of 10 percent on gross revenues.
Jim Kerzie, the landlord for a nontribal business that has been in Hawks Prairie for 14 years, said he was pleased with the results after the council voted 6-1 to amend the tax rate.
“It’s great,” he said after the council meeting. “It saves jobs and the tenant,” Kerzie said, adding that the business was at risk of leaving the area. It employs about 140, he said.
Kerzie also has stated a willingness to reduce lease payments on the building, with the expectation that the business will renew its lease for another five years.
This is the second time that Hawks Prairie Casino at Interstate 5 and Marvin Road has benefited from a reduction in its gambling tax rate.
City Manager Scott Spence explained to the council that it was lowered from 2007 to 2011, and then returned to 10 percent.
Thursday night’s decision will be phased in over time, cutting the rate to 9.17 percent in April, 8.33 percent on Jan. 1, 2015, and then again to 7.5 percent on Jan. 1, 2016.
That schedule eventually will reduce the city’s gambling tax revenue on social card games to $337,500 in 2016 from $450,000 in 2014.
Although the lower tax rate won approval from the council, Deputy Mayor Cynthia Pratt expressed her reservations and councilman Jason Hearn voted against it.
Pratt pointed out the importance of added revenue at a time when local governments continue to struggle with generating revenue.
“Our revenue is not so great,” she said.
Hearn was largely opposed to lowering the tax rate because the city has already lowered it once before.
Councilman Gadman shared Pratt’s concerns, but he, councilman Lenny Greenstein and councilman Virgil Clarkson also said the lower tax rate protects jobs, and that some revenue for the city is better than no revenue at all.
Mayor Andy Ryder and councilman Michael Steadman also voted to approve the amended tax rate.
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