Hold all bets: House stalls Katrina relief bill over casinos

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WASHINGTON -- As the Christmas recess loomed last week, House and Senate leaders were still wrestling over a $7.1 billion tax relief bill for Gulf Coast businesses devastated by Hurricane Katrina.

Progress was stalled because of an amendment that would exclude casinos, liquor retailers and certain other businesses from getting relief.

Tourism and gaming officials in Mississippi and Louisiana, along with state government officials, expressed concern that the amendment could keep the aid package in limbo until early next year -- and unfairly discriminate against legal businesses.

The proposed tax relief is in addition to a much larger $35 billion aid package that top government officials from Louisiana and Mississippi were lobbying furiously to get passed before the holiday break.

The Senate should not go home for Christmas until we fulfill our duty to the people of the Gulf Coast, Sen. Mary Landrieu (D-La.), told reporters.

Gulf Coast state officials expressed growing resentment toward Congress and the White House for the slow pace of tax relief, direct aid and other government assistance.

They were especially unhappy about an amendment in the House version of the tax relief bill, offered by Rep. Frank Wolf (R-Va.), to exclude casinos from tax breaks, which drew accusations of playing social politics with the recovery effort.

This diminishes the incentive to re-invest here, said Steve Richer, director of the Gulf Coast Convention and Visitors Bureau in Mississippi. We want to see as much incentive as possible for reinvestment here ... including the casinos.

But social conservatives have bristled at the idea of using tax money to help rebuild casinos, which many of them view as objectionable businesses.

People say casinos supply jobs, said Chad Hills, a gambling research analyst with Focus on the Family, a politically active Christian organization based in Colorado. I think the last thing we need is to rebuild a predatory industry where their job is to take money from other people.

The industry reportedly produces estimated annual tax revenue in Mississippi and Louisiana of about $770 million.

Richer said the tax relief flap is just one of many issues frustrating rebuilding of the regions vital tourism business. Of some 7,000 applications for Small Business Administration loans, only some 400 have been handled so far, he said.

The House version of the tax relief package was passed by a wide margin earlier this month after Wolfs amendment was added. The Senate version, passed earlier, carried no such restrictions on what businesses could qualify. The differences forced the bill into a conference committee, where the debate continued late last week.

In addition to casinos, Wolfs amendment would exclude liquor retailers, race tracks, commercial golf courses, tanning salons and massage parlors.

Wolf, who is not a participant in the conference committee, was unavailable for comment. But his press secretary, Dan Scandling, said the provision is identical to restrictions that are routinely put on economic redevelopment bills in Congress. He said he was not sure if that language had been applied in the past to disaster relief.

Hills said casinos in Mississippi damaged by Katrina have already received relief from state lawmakers who voted to allow casinos to move from floating barges to previously prohibited land-based facilities. Theyve already said they will come back bigger and better than they were, Hills said. So why would they need taxpayer help?

Frank Fahrenkopf Jr., president of the American Gaming Association, labeled the exclusion inappropriate.

Our industrys No. 1 priority continues to be getting our 16,000 employees back to work as quickly as possible, Fahrenkopf said. Calling casinos the economic engine of the region, he said that leaving them out of the relief package certainly goes against the spirit of any recovery legislation.

To contact reporter Dan Luzadder, send e-mail to [email protected].

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