Governor Proposes Tax Cut for One Racetrack Casino
By Barry Massey/
Associated Press
SANTA FE — Gov. Bill Richardson is proposing a tax reduction that will benefit one of the state's horse racing tracks and casinos.
The governor is backing legislation to lower the state's tax rate on the smallest track casino. Currently, only Ruidoso Downs would qualify for the tax cut. The track and its owner have been political contributors to Richardson.
The state imposes a 26 percent tax on the net win of track casinos.
Richardson proposes a lower tax rate for any track with a net win of less than $14 million a year. Of New Mexico's five track casinos, only Ruidoso Downs has a net win — slot machine wagers less payouts — under that amount.
The proposed rate would be 10 percent on net win of up to $10 million and 26 percent on proceeds above that amount, according to Jim Nunns, director of tax policy in the Taxation and Revenue Department.
The Richardson administration estimates the tax cut, if enacted, would cost the state $708,000 in reduced revenues in the next budget year — the amount of tax savings for the track — and almost $1.5 million in the 2010 fiscal year.
"The governor is supporting the idea of a lower tax burden for smaller race tracks that generate less revenue,'' Gilbert Gallegos, a spokesman for Richardson, said in a statement.
"The governor believes a tiered tax structure for race tracks will encourage track owners to continue to operate in rural areas of New Mexico, where horse racing and breeding has a rich history.''
Providing a lower tax rate for the smallest track casino is similar to the payment system for casinos operated by Indian tribes. Under compacts approved last year, tribal casinos with slot machine net win of less than $15 million pay the state 3 percent of the first $5 million and 9.25 percent on the rest.
Ruidoso Downs faces fierce competition for gambling dollars in southern New Mexico. The Mescalero Apache Tribe operates a nearby casino. There also are racetrack casinos in Hobbs and Sunland Park.
Track casinos are limited to slot machines. Tribal casinos can offer a broader range of gambling, including card games such as poker.
The horse racing, casino and gambling industries, including Ruidoso Downs, were significant donors to the governor's 2006 re-election campaign — giving about $478,000, according to the National Institute on Money in State Politics.
The owner of Ruidoso Downs and track officials also contributed to Richardson's just-ended presidential bid.
Ruidoso Downs gave $13,000 to the governor's 2006 re-election campaign. Track owner R.D. Hubbard and his wife contributed $4,600 to the presidential campaign, and other track executives gave $4,600, according to federal campaign finance records through September. The campaign also paid to use a Hubbard company airplane for travel by Richardson last year.
Richardson has said campaign contributions do not influence his decisions on state business. "I don't even know who contributes to my campaigns,'' Richardson said last year.
The racetrack casino proposal is among a handful of tax measures Richardson is asking the Legislature to approve in its 30-day session. The proposals were outlined in an administration budget document.
Another tax proposal would expand a tax credit for employers that create "high wage'' jobs. Administration officials say the change was developed as an economic development incentive to help attract a financial services company, Fidelity Human Resources Services Company, to New Mexico.
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