Approval of expanded gambling should boost property tax credit fund
Nebraska’s 2020 election results are in and Initiative #431 passed, allowing the state to levy a 20% tax on all gross gaming revenue generated within licensed racetracks. Along with companion ballot measures approving expanded gambling, this means slot machines and table gambling will be allowed along with their respective regulations. The licensed horse racetracks in Nebraska that could host gaming are located in Omaha, Lincoln, Grand Island, Columbus, and South Sioux City.
These new measures will have a to-be-determined impact on the state’s original property tax credit program, adopted in 2007. New property tax legislation enacted this year (LB1107) specified that state laws that direct more revenues to the Property Tax Credit Fund, as Initiative 431 calls for, must add to the current annual floor of $275 million established by lawmakers. This created a statutory requirement that prevents casino funds from simply being used in place of the money that has already been allocated to the property tax relief program, meaning the base amount will get a little boost from gambling tax revenue.
While this is good for those that want more money to be directed towards property tax relief, the fiscal note for LB1107 did not have any estimates on how much this tax would generate.
Proponents of the measure have estimated that the state will garner $65 million annually from the taxes on casino revenue, however, that figure has not been verified. If that $65 million figure is somewhat accurate, that means the property tax credit relief fund will see a roughly $45 million boost from gambling in the upcoming years, but that will depend on the level of business done by future gaming operations in Nebraska in any given year.