This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SJR 037 - Authorizes excursion gambling boats in artificial basins created prior to date amendment is adopted
SJR 37 - Fiscal Note

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3072-04

BILL NO. SJR 37

SUBJECT: Constitutional Amendment: Gambling

TYPE: Original

DATE: March 9, 1998

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED FY 1999 FY 2000 FY 2001
General Revenue $3,496,680 to $7,035,253 $6,066,128 to $12,132,254 $6,066,128 to $12,132,254
Gaming Proceeds for Education Fund $27,012,596 to $54,025,191 $46,307,307 to $92,614,614 $46,307,307 to $92,614,614
Gaming Commission Fund $8,402,050 to $16,804,101 $14,403,515 to $28,807,030 $14,403,515 to $28,807,030
Blind Pension Fund $25,375 to $50,750 $43,500 to $87,000 $43,500 to $87,000
School District Trust Fund $371,975 to $743,949 $637,671 to $1,275,341 $637,671 to $1,275,341
Conservation Fund $46,497 to $92,994 $79,709 to $159,418 $79,709 to $159,418
Parks, Soil, and Water Funds $37,197 to $74,395 $63,767 to $127,534 $63,767 to $127,534
Total Estimated

Net Effect on All

State Funds

 $39,392,370 to $78,826,633 $67,601,597 to $135,203,191 $67,601,597 to $135,203,191



Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 6 pages.





ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED FY 1999 FY 2000 FY 2001
None
Total Estimated

Net Effect on All

Federal Funds

 $0 $0 $0



ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED FY 1999 FY 2000 FY 2001
Local Government $16,928,736 to $33,857,472 $29,020,691 to $58,041,380 $29,020,691 to $58,041,380



FISCAL ANALYSIS

ASSUMPTION

The Office of Administration, Budget and Planning assumes this proposal would not fiscally impact their agency.

The Attorney General's Office assumes unknown costs resulting from this proposal due to the possible future litigation.

The Gaming Commission (GAM) estimates that under a worst case scenario, five properties, with a total of ten riverboats, could be forced to close if this constitutional amendment is not approved. GAM estimates these riverboats would generate total tax revenues of $193,244,571 in FY98, which includes $102,905,127 in adjusted gross receipts tax, $57,614,060 in admissions tax, $8,306,231 in income tax, $7,301,328 in sale and use tax, and $17,117,825 in property tax. GAM notes that they are unable to predict the exact amount of adjusted gross receipts tax that could be lost because it is probable that some of the losses would be replaced by an increase in market share and revenue for the remaining riverboats.

GAM further notes there would be a loss of 8,422 jobs, and their estimated fiscal impact does not ASSUMPTION (continued)

include costs for those persons seeking unemployment compensation. Additionally, no consideration was given to the multiplier effect of dollars recirculating through the Missouri economy, and the reduction in sales for businesses that supply the riverboats with goods and services.

Oversight assumes this proposal would require the Secretary of State's Office to certify the proposal to local election authorities for inclusion on the November 1998 general election ballot and to publish full text of the proposal in selected newspapers throughout the state. Costs are estimated at $1,330 per inch, which is based on actual publication costs that were incurred for the November 1996 election, for 3 printings, or $3,990 per newspaper column inch. Oversight estimates 10.5 column inches would be needed for the publications at a total cost of $41,895.

Oversight further assumes that if this constitutional amendment is adopted, the state could avoid losses of revenue of up to approximately $193,244,571 annually. However, such amounts are speculative due to the fact that riverboats could be relocated to fall within legal boundaries or current customers of the properties in question could choose to patronize other riverboats. Due to these uncertainties, Oversight has reflected continued revenue of $96,622,286 (50% of Gaming's estimates) to $193,244,571 as an anticipated fiscal impact of this proposal.



FISCAL IMPACT - State Government FY 1999 FY 2000 FY 2001
(7 Mo.)
GENERAL REVENUE
Income
Income tax $2,422,651 $4,153,116 $4,153,116
to $4,845,301 to $8,306,231 to $8,306,231
Sales and use tax $1,115,924 $1,913,012 $1,913,012
to $2,231,847 to $3,826,023 to $3,826,023
Cost-Secretary of State
Newspaper Advertisements ($41,895) $0 $0

ESTIMATED NET EFFECT ON

 $3,496,680 $6,066,128 $6,066,128
GENERAL REVENUE FUND to 7,035,253 to 12,132,254 to 12,132,254
FISCAL IMPACT - State Government FY 1999 FY 2000 FY 2001
(7 Mo.)
GAMING PROCEEDS FOR EDUCATION
Income
Gaming Tax $27,012,596 $46,307,307 $46,307,307
to 54,025,191 to 92,614,614 to 92,614,614

ESTIMATED NET EFFECT ON

GAMING PROCEEDS FOR $27,012,596 $46,307,307 $46,307,307
EDUCATION FUND to 54,025,191 to 92,614,614 to 92,614,614
GAMING COMMISSION FUND
Income
Admission Fees $8,402,050 $14,403,515 $14,403,515
to 16,804,101 to 28,807,030 to 28,807,030

ESTIMATED NET EFFECT ON

 $8,402,050 $14,403,515 $14,403,515
GAMING COMMISSION FUND to 16,804,101 to 28,807,030 to 28,807,030
BLIND PENSION FUND
Income
Property tax $25,375 $43,500 $43,500
to $50,750 to $87,000 to $87,000

ESTIMATED NET EFFECT

 $25,375 $43,500 $43,500
ON BLIND PENSION FUND to $50,750 to $87,000 to $87,000
SCHOOL DISTRICT TRUST FUND
Income
Sales and use tax $371,975 $637,671 $637,671
to $743,949 to $1,275,341 to $1,275,341

ESTIMATED NET EFFECT ON

 $371,975 $637,671 $637,671
SCHOOL DISTRICT TRUST FUND to $743,949 to $1,275,341 to $1,275,341
FISCAL IMPACT - State Government FY 1999 FY 2000 FY 2001
(7 Mo.)
CONSERVATION FUND
Income
Sales and use tax $46,497 $79,709 $79,709
to $92,994 to $159,418 to $159,418

ESTIMATED NET EFFECT

 $46,497 $79,709 $79,709
ON CONSERVATION FUND to $92,994 to $159,418 to $159,418
PARKS AND SOIL AND WATER FUNDS
Income
Sales and use tax $37,197 $63,767 $63,767
to $74,395 to $127,534 to $127,534

ESTIMATED NET EFFECT ON

 $37,197 $63,767 $63,767
PARK AND SOIL AND WATER FUNDS to $74,395 to $127,534 to $127,534
FISCAL IMPACT - Local Government FY 1999 FY 2000 FY 2001
(7 Mo.)
POLITICAL SUBDIVISIONS
Income
Gaming Tax $3,001,400 $5,145,257 $5,145,257
to 6,002,799 to 10,290,513 to 10,290,513
Admission Fees $8,402,050 $14,403,515 $14,403,515
to 16,804,101 to 28,807,030 to 28,807,030
Property Tax $4,967,324 $8,515,413 $8,515,413
to 9,934,648 to 17,030,825 to 17,030,825
Sales and use tax $557,962 $956,506 $956,506
to $1,115,924 to $1,913,012 to $1,913,012
FISCAL IMPACT - Local Government FY 1999 FY 2000 FY 2001
(7 Mo.)

ESTIMATED NET EFFECT

 $16,928,736 $29,020,691 $29,020,691
ON LOCAL GOVERNMENT to 33,857,472 to 58,041,380 to 58,041,380
FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

This proposed constitutional amendment would authorize excursion gambling boats in artificial basins created prior to the date the amendment is adopted which are located within one thousand feet of the closest edge of the main channel of either the Mississippi River or the Missouri River. Facilities located within an artificial basin on the date the amendment is adopted may be expanded within that basin as authorized by law.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Gaming Commission

Office of Administration

Budget and Planning

Attorney General's Office







Jeanne Jarrett, CPA

Director

March 9, 1998