LA CENTER — An ordinance to give a temporary tax break to the two remaining cardrooms in La Center didn’t come to vote at Wednesday night’s city council meeting.
Councilor Elizabeth Cerveny put a motion up to vote on the ordinance, but none of the other three councilors seconded it. Councilor Joe Valenzuela was absent from the meeting.
The ordinance would’ve cut the tax rate for the cardrooms from 10 percent to 5 percent for Oct. 1 through Dec. 31. That would’ve allowed the cardrooms to keep an estimated $225,000 instead of giving it to the city, according to a presentation by Paul Lewis, a financial consultant for the city, at the meeting.
“I was very disappointed it didn’t come to a vote (Wednesday) night,” La Center Mayor Greg Thornton said. “It was very unfortunate the council let that motion die.”
The cardrooms have out-performed estimations for the year, bringing in around $1.9 million to La Center so far, according to a third-quarter financial report from Suzanne Levis, finance director, at the meeting. That’s roughly the amount the city was expecting to get from the cardrooms for the entire year. The cardrooms have recently brought in anywhere from $2.6 million to $3.4 million to the city in tax revenue throughout the last decade.
The city is also looking at an estimated surplus of between $300,000 to $500,000 after the year, another reason the council was talking about giving some respite to the cardrooms.
“It’s disappointing,” said John Bockmier, a representative for the cardrooms. “We’re not going to get any relief. We’ll find another way to survive.”
Councilor Al Luiz said he couldn’t consider lowering the tax rate because it felt like rewarding a business for struggling. He said it didn’t make business sense to go through with the temporary cut, and that money belonged to the residents of La Center.
Thornton said he was surprised the vote didn’t happen, and he hopes the city and cardrooms can work together to find a solution that works for both sides.
“The cardrooms and city have been in a partnership for 30 years,” Thornton said. “Essentially, the cardrooms have been great partners. They’ve provided the city with a great tax base for many years that has allowed us to provide high levels of service.”
Cardroom update
During the public hearing Wednesday night about the temporary tax reduction, Bockmier told councilors that fall and winter are historically the strongest months for the cardrooms. He said September was the worst September the cardrooms have ever had, and that October will be worse.
“We are in serious trouble,” Bockmier said.
He said that in 2013, the four cardrooms had 624 employees. Currently, the two cardrooms have 399 employees.
Lewis gave a few possible reasons for the cardrooms’ struggles, the biggest being the nearby Ilani Casino Resort opening earlier this year. Bockmier called that the “tipping point,” but said other issues were already hitting the cardrooms.
Lewis said La Center Road construction has affected the cardrooms, along with rising labor costs due to an increased minimum wage and the Affordable Care Act. There have been years when cardroom revenue made up around 70 percent of the city’s revenue, Lewis said. In the proposed budget for 2018, it makes up less than 50 percent.
Lewis said city officials raised the projected revenue coming in from cardrooms from $1.1 million to $1.6 million in the 2018 proposed budget because the cardrooms have out-performed expectations so far this year.
Still the cardrooms are underperforming when compared to previous years. Morgan Wentworth, facilities manager at the Last Frontier, spoke at Wednesday’s meeting, and said the cardrooms have been adapting to new laws for years, dating back to things like the smoking ban.
“We always have to tighten our belt,” he said. “We’re running out of holes in the belt.”
