CIVIC GROUPS ARE UPSET OVER NEW BINGO TAX

The state may have thought it had hit the jackpot with a new bingo tax. But civic and fraternal groups that sponsor bingo games say the new tax will mean cutbacks in donations to local charities.

Bingo sponsors across the state want the tax repealed. Locally, petitions calling for repeal of the tax have been circulated at bingo games.

Legislators are already getting the message. State Reps. Mary Kasten of Cape Girardeau and Dennis Ziegenhorn of Sikeston said Wednesday that they have received numerous telephone calls from members of area organizations which sponsor bingo. The callers want the tax repealed.

Both Kasten and Ziegenhorn said they would consider voting to repeal the new tax if the issue surfaces in the next legislative session.

"My constituents have let me know they are unhappy about the amount of money they are going to have to pay, which will detract from the charity that they are contributing toward," said Kasten.

The state currently levies a 2.5 percent tax on bingo game receipts, plus a tax of $10 per box on pull-tab cards. The tax generates about $5.3 million annually, which goes into the state's general revenue fund.

Under a measure approved by lawmakers last session, an additional 3 percent tax will be levied, beginning with the start of the new year on Saturday. The tax will be in effect for five years, expiring on Jan. 1, 1999. The additional tax will generate an estimated $5.7 million statewide annually, money which will be earmarked for construction or remodeling of Missouri's veterans homes.

"It more than doubles the tax," said Floyd Patterson, bingo chairman for VFW Post 3838 in Cape Girardeau. The organization holds weekly bingo games. About 200 people generally attend the organization's weekly bingo night.

Patterson said the veterans organization donates at least $50,000 to $75,000 annually to charitable and community groups -- from the Boy Scouts to senior citizens.

Bingo proceeds also go to various projects to assist the Cape Girardeau veterans home. "We donate quite heavily to the veterans home," said Patterson.

"We spread it around to everybody," he said.

But Patterson said he and other VFW members don't want an added tax on bingo, even if it's earmarked for veterans homes. "Taxing something that automatically goes back to the community in general, to me, is not a good idea."

The existing tax and the new tax apply to gross receipts, which includes the prize money.

"We give out $3,600 in prize money a night," said Patterson. "That's the maximum allowed by the state's bingo law."

Other local organizations, which sponsor bingo games, also give out the maximum amount in prize money.

Patterson said the new tax will take a significant slice out of the bingo proceeds, which go to community and charitable organizations and projects.

"It basically is going to cost the VFW anywhere from $700 to $1,000 a month in additional taxes," he noted.

It's not practical, he said, to raise the price of bingo cards. If that were done, bingo players would buy fewer cards and that would ultimately mean there would be less money put back into the community, said Patterson.

Although the new tax takes effect Saturday, Patterson said his organization has yet to receive any written notification from the Missouri Department of Revenue.

Ziegenhorn said he's surprised at the opposition to the new tax from veterans groups, which he thought would have supported a tax earmarked for veterans homes.

"I think there is a total misunderstanding," said the Sikeston Democrat. "They don't understand it is for five years and that it is definitely earmarked for them."

Said Ziegenhorn, "We obviously needed to find some money to upgrade the veterans homes."

Kasten said, "It's a good, worthy cause. I just think we got too ambitious."

The Cape Girardeau Republican said she would like to see the law amended at least so the tax would apply to net rather than gross revenue.

"It's a hot topic," said Kasten. "We need to do something about it."

Ziegenhorn said bingo was viewed by lawmakers as an attractive revenue source because it's a "volunteer tax" in that no one is required to play bingo.

But many people do. The Elks Lodge in Cape Girardeau hosts bingo games each Wednesday night. "Bingo is the only place that we as a fraternal organization can make money to give away to charities. Basically it is our only means of getting funds," said Ron Bollinger of the Elks' bingo committee.

"Whenever we have to pay an additional tax that just cuts down on what we can give back to the community," he said.

The Elks raise about $45,000 to $50,000 annually, with the money going to various civic and charitable organizations and projects.

Bollinger said his organization would be "cutting its own throat" if it raised the price of bingo cards and passed the tax on to the players.

"We have a lot of retired people, people on fixed incomes. This is really a source of entertainment to them," he said.

Terry Crowell, president of the Kiwanis Club in Cape Girardeau, said that with the added tax, his organization will be paying bingo taxes in the mid-$20,000 range as compared to less than $10,000 now.

The Kiwanis Club's weekly bingo night is the largest in the area, drawing over 300 a week on average.

Crowell said the added tax will mean less money can be plowed back into the community for various charitable projects, including college scholarships.

"What I think most people are complaining about is that it was done very quietly through the state legislature," he said.

It's only been within the last couple of months that most bingo sponsors have learned of the new tax, he said.