New Study Reveals Proposed Casinos' Adverse Effect on Local Schools
SIOUX CITY, Iowa, March 6, 2013 /PRNewswire-USNewswire/ -- The Strategic Economics Group (SEG), an Iowa based research consulting firm, today released the first of a series of studies comparing the different economic effects that four proposed Woodbury County casinos would have on local governments and communities.
According to the study, two of three casinos that have been proposed for Sioux City would divert millions of dollars of new property taxes that normally would help fund local schools to instead cover debt service costs arising from the tax increment financing (TIF) incentive packages being requested by the developers from the City of Sioux City.
The report explains, "Over the 20-year life of a TIF district established in conjunction with the development of either the Hard Rock or the Warrior casino and hotel a portion or all of the property tax revenue that results from the growth in property valuation within the TIF district would be diverted from other taxing authorities to the City of Sioux City for TIF related purposes."
As a result of this diversion, the Hard Rock's proposed terms would result in a net diversion of over $14 million dollars over 20 years for local schools. If the Warrior Casino were to be chosen, diversion from Sioux City schools would be even larger— over $20 million.
In contrast, the proposed "Hollywood Casino" for downtown Sioux City would divert no money from local schools, as neither of Penn's two Woodbury County casino proposals would require TIF financing. Instead, the Hollywood proposals would provide $41 million and $34 million for their downtown and county proposals, respectively and to the respective school districts.
Hard Rock's developers are requiring a $22 million TIF financing package in order to build their proposed casino while Ho-Chunk Inc. has asked local taxpayers for $25 million in TIF financing to build its Warrior Casino.
The study can be found here.
The authors of the study are Harvey Siegelman, President of SEG and former State of Iowa Economist (1982 – 2001) and Mike Lipsman, senior economist at SEG and former Research Manager for the Iowa Department of Revenue. To arrange an interview with the authors, please contact: Harvey Siegelman at 515-246-0764.
SOURCE Strategic Economics Group