Casinos rally against a higher tax

Much to their dismay, four mini-casinos suddenly find themselves smack in the middle of the Metropolitan King County Council's swirling budget negotiations.

Councilwoman Jane Hague, R-Bellevue, wants to nearly double the county tax on the only four nontribal casinos in unincorporated King County and use the proceeds to restore some of the funding County Executive Ron Sims has proposed be cut from county arts programs.

Cardroom operators say it will force them to lay off workers, perhaps even shut down. They packed the council chambers with protesting employees yesterday and won a test vote.

But as council members and Sims negotiate feverishly in anticipation of Monday's final vote on the 2002 budget, Hague's tax proposal remains in play. There's a chance she could be the seventh vote on the 13-member council for a budget Sims would accept.

For now, at least, Sims isn't taking sides on the casino tax, his lobbyist said.

Hague said yesterday that her vote on the budget didn't necessarily hinge on acceptance of her tax proposal. She said she was open to a smaller tax increase.

But she also made it clear that restoring funding for the arts is a top priority.

"They have probably taken the largest hit of any of the executive agencies," Hague said.

To help close a $45 million general-fund shortfall, Sims has proposed a cut of $1.4 million — 70 percent — for the county's Office of Cultural Resources, which supports organizations ranging from Seattle Opera to the Snoqualmie Valley Historical Museum.

The county now levies an 11 percent tax on the gross revenues of the four mini-casinos, in unincorporated Skyway, Boulevard Park and Fairwood. That's expected to bring in $1.7 million this year.

Hague wants to raise the tax to 20 percent — the maximum allowed under state law. She says that would restore most of Sims' proposed cut.

But casino owners and employees said their businesses were operating on thin margins. A tax increase would probably reduce county revenues, they said, and almost certainly put people out of work.

Betty Newhart, a floor manager at the Skyway Park Bowl and mother of three, said she was on welfare for 10 years before beginning work at the casino.

"Some of us are going to starve," she told the council. "Some of us are going to have to go back on welfare."

Jack Spitz, owner of Cascade Bowl in Fairwood, said he would probably close his casino and almost certainly stop offering medical and dental benefits to his employees. He said he hadn't turned a profit since his casino opened in February.

Jim Routos, owner of the Royal Casino in Skyway, said he would move his business, probably to nearby Renton, where the tax is only 10 percent.

Hague said later that she was suspicious of the casinos' tales of financial woe: "I think they're telling us a partial story."

Most arts leaders who addressed the council yesterday stopped short of endorsing Hague's plan. But all opposed Sims' cuts, saying they would harm not just the county's cultural climate, but its economic health.

Carol Borgmann, who chairs the Eastside Arts Coalition, said Eastside arts organizations generated $40 million in business activity and $19 million in labor income last year. "To eliminate this vital (county) support would be devastating," she said.

On another revenue matter, the council yesterday tentatively approved an increase in the annual surface-water management fee in unincorporated areas. Most homeowners will see a $17 increase, from $85 to $102.

Backers said the additional money would pay for more flood-control projects and restore funding for some county environmental programs that had been targeted for cuts.

Eric Pryne can be reached at 206-464-2231 or epryne@seattletimes.com.