JOHNSTON, Iowa — The Iowa Legislature isn’t likely to expand gambling to generate more tax revenue and help cover a large budget gap, the Senate majority leader said Friday.
Michael Gronstal, a Council Bluffs Democrat, said there is little interest in an idea floated by some legislators to allow taverns to install gambling devices.
He said the idea sounds a lot like the debate over the lottery’s TouchPlay machines, which were in about 3,200 stores and bars before the Legislature banned them in 2006, prompting numerous lawsuits.
“A couple of years later we’re going to go reverse that and go back?” asked Gronstal. “I think that’s unlikely.”
Gronstal, speaking during a taping of the Iowa Public Television program “Iowa Press,” said most of the legislators who decided to change state policy and ban the machines are still in office.
Proponents of the effort have suggested limiting the machines to taverns, which would respond to criticism that they had quickly become so prevalent.
“Instead of 6,000 locations in Iowa, maybe you’re down to 4,000 locations,” said Gronstal. “It’s not that limited.”
Also Friday, a group of state agency directors recommended overhauling the state’s system of tax credits, including putting a $185 million ceiling on business credits and eliminating a tax credit for moviemakers. The movie credit became a hot topic after allegations it had been poorly managed by and abused by some film companies.
Gronstal said there was interest in changing the tax credit system but that the movie program might be retained.
“It’s hard to say whether we eliminate it,” said Gronstal. “I think it’s 50-50 that it survives.”
The Legislature that convenes Monday will likely be consumed with cutting state spending to cover a budget shortfall that some think could reach $1 billion. Critics warn that those cuts could force increases in property taxes that finance local schools and governments.
Gronstal said lawmakers are crafting a measure that would restrict those increases and force use of cash reserves.
“We’re dipping into our cash reserves in a fairly significant way,” said Gronstal.
“We think it’s appropriate for school districts and local governments to do that as well, as opposed to raising property taxes,” he added.