May 25, 2006 - 02:08:31 CDT
Ron Gibbens said there's a "very strong likelihood" two charitable bingo halls will close because of a statewide anti-smoking law, yet he is not asking legislators for an exemption to the law.Gibbens, who founded the North Dakota Association for the Disabled 30 years ago with his wife, Faye, has dismissed the idea of asking for a smoking exemption because of the nature of the organization.
"As an organization that provides for the health of citizens, we don't want the NDADto be portrayed as being pro-smoking," Gibbens said.
Instead, Gibbens, the president and CEO of NDAD, is asking legislators to consider granting tax relief to charitable gaming organizations.
The state currently charges a 5 percent tax on the first $200,000 of adjusted gross gaming proceeds, 10 percent on the second $200,000, 15 percent on the next $200,000 and 20 percent on proceeds of more than $600,000.
One of Gibbens' suggestions is to set the tax at a flat 5 percent rate regardless of the amount of proceeds collected.
Another option he presented to a group of legislators and nonprofit executives in Bismarck on Wednesday was to eliminate the sales tax on bingo sales. Gibbens said if the sales tax is eliminated, bingo halls could maintain their current prices but keep the amount they would have normally collected for sales taxes.
Gibbens estimated that the state would lose about $1 million a year if either one of those proposals passes but that the state risks even more losses if two bingo halls in eastern North Dakota - one operated by the NDADin Grand Forks and another by the Plains Art Museum in Fargo - close.
Since the statewide ban on smoking in most public places went into effect in August of last year, bingo halls have blamed it for lagging sales.
The eastern bingo halls are more susceptible to closure because customers cross the border to Minnesota, where they can smoke in bingo halls there, Gibbens said.
Legislators at Wednesday's meeting were open to the idea of looking at the tax structure or making other changes to help charitable bingo.
Sen. Bob Stenehjem, R-Bismarck, suggested that charitable gaming organizations could lobby cities to ban smoking in all bars that conduct bingo games so that a level playing field is created. He also said legislators could consider a flat tax rate that is higher than 5 percent.
"Coming up with a big tax break is probably going to be hard to do,"Stenehjem said.
Rep. Dwight Wrangham, R-Bismarck, said he was surprised the NDADdoesn't want an exemption to the smoking ban. Wrangham said people should be allowed to smoke in bingo halls, but the age to enter a bingo hall should be increased to 21.
"We should allow those people to exercise their right to smoke," Wrangham said.
Rep. George Keiser, R-Bismarck, said the Legislature needs to re-examine taxes on all gaming revenue and could consider a flat tax that is revenue neutral to the state.
According to Gibbens, the NDADcollects 70 percent of its revenue from gaming. To make up for lagging bingo sales, the NDADhas eliminated their medical equipment budget for 2007 and other budgets and has put a freeze on raises for staff. The NDADprovides medical equipment, drugs, transportation and attendant care for people across the state with a variety of disabilities.
Gibbens said the NDAD bingo hall in Grand Forks lost $27,800 from October 2005 to this March, and he presented a report showing a combined 74.4 percent decrease in net income for NDAD bingo halls in Grand Forks, Minot and Williston from that time period compared to the previous year.
John Harris III, president and CEO of Prairie Public Broadcasting, which operatesDakota Skies Bingo in Bismarck, said the bingo hall will survive if no changes are made, but the lost revenue will affect the services the company provides to the public. Harris said Dakota Skies Bingo made about $211,000 less from October 2005 to April 2006 compared to the same period of time a year ago. Harris said bingo income is about 12 percent of the company's total income.
Ed Pauley, president and CEO of the Plains Art Museum, said the museum has reduced staff by 16 at the museum and has made other cuts.
"We will have to consider closing altogether if it doesn't turn around," Pauley said.
(Reach reporter Tom Rafferty at 223-8482 or tom.rafferty@;bismarcktribune.com.)
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