Doug Kellogg

Read Between the Lines: Low Taxes Pay Off for Sports Betting

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Posted by Doug Kellogg on Friday, April 5th, 2019, 1:45 PM PERMALINK

Another Associated Press article on sports betting in the states, another headline that does not do justice to the reality on the ground.

The latest, “Most states’ sports betting revenue misses estimates”, is correct on the surface, but fails to explain how the states that are coming up short have failed to widely authorize sports betting, and also suffer from high tax rates.

Rhode Island and Pennsylvania are two of four states cited for having lower than expected revenues. But these states suffer from absurdly high tax rates on betting, which the article mentions but somehow fails to connect the dots.

Rhode Island’s tax rate is an unbelievable 51 percent.

Pennsylvania has a massive 36 percent effective tax rate, on top of a $10 million initial licensing fee. The state experienced a significant delay in sports betting getting started because it took months for an operator to even apply for a license and pay the massive fee. The state is also right next door to New Jersey, which enacted sports betting in a more efficient, and taxpayer friendly manner. Consumers can head across the border to place bets in New Jersey (in-person or via an app) instead of paying massive tax rates in Pennsylvania.

These huge tax rates completely ignore the success that Nevada has had for decades with a lower 6.75 percent tax rate. Cuts in the federal excise tax rate on bets decades ago were also necessary to open up Nevada’s sports books for significant growth.

It’s no wonder New Jersey has done just fine on revenues, with an 8.5 percent rate on in-person bets and 13 -14.25 percent online. The Garden State has also allowed mobile bets from the start.

Pennsylvania is awaiting legal mobile betting, as is Rhode Island, both states have passed measures legalizing it.

The AP article quotes a West Virginia lawmaker who complains taxes on betting aren’t high enough to bring in revenue. This misses the point, and would only hurt West Virginia. The state has a competitive 10 percent tax rate on bets, but implementation of sports betting has suffered from delays not necessarily related to public policy, and few operators which has limited availability.

Mississippi is also cited by the AP for missing revenue projections. It is another state without mobile wagering, and unlike Rhode Island and Pennsylvania, Mississippi bills to open up mobile betting have failed this session. Mobile betting only works if you’re at an authorized location.

It is 2019, you can’t expect to reach the broadest market possible if you’re limiting betting to in-person, physical locations.

Despite the headline, the evidence shows low taxes, and free markets work in sports betting just like they work everywhere else.  

A Chance to End the Income Tax in North Dakota

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Posted by Doug Kellogg on Tuesday, March 12th, 2019, 3:37 PM PERMALINK

There could soon be a tenth state with no income tax.

The North Dakota Senate has the opportunity to pass a bill this session that would eliminate the income tax. The legislation, HB 1530, which sailed through the House, is sponsored by Rep. Craig Headland, finance committee chair and Taxpayer Protection Pledge signer.

North Dakota’s “Legacy Fund” consists of oil tax revenue that has been saved over time, and now amounts to north of $6 billion. Headland’s bill would use this fund to cover the estimated $900 million in income tax the state takes in during a two-year cycle, and end the state income tax.   

The state is also seeing revenues come in higher than expected, so dropping the income tax is more than affordable: “A revised revenue forecast released today by the North Dakota Office of Management and Budget (OMB) estimates general fund revenues of $4.3 billion for the 2019-2021 biennium, an increase of $51 million from the November forecast.”

Ending the income tax would be a great move for North Dakota taxpayers and the economy. Recent tax cuts in North Carolina have led to the state outpacing the region in GDP and population growth. No income tax Florida saw record job creation from late 2017 to late 2018, and Texas led the nation in the rate of GDP growth in 2018.

This move is also necessary, as the Legacy Fund is a ripe target for special interests, and politicians looking to spend on various projects. If the fund is not used to eliminate the income tax, it will end up being used for something that either does less for taxpayers, or is downright wasteful.

North Dakotans should be able to keep their hard-earned money. The Senate and Governor Burgum should seize this opportunity to deliver what would be an earth-shaking win for voters, taxpayers, and the state - building on the great success they have already had.

Photo Credit: Flickr - Drew Tarvin

Nevada Should Avoid Bill That Would Drive Up Costs for Car Repairs & Hit the Brakes on Small Businesses

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Posted by Doug Kellogg on Thursday, March 7th, 2019, 11:59 AM PERMALINK

Choice and competition are what drive better options at lower prices for consumers. But a bill in the Nevada legislature would add regulations that would limit competition in the auto parts market, driving up costs for consumers, and crushing small businesses.

The legislation in question, Assembly Bill 173, is up for a vote in committee Thursday. It would stop Nevada residents from benefiting from the savings they can achieve when using non-Original Equipment Manufacturer automotive parts.

The government would get in the way of perfectly happy consumers and businesses who are doing just fine right now by adding hurdles, like permission slips, endless forms, and even outright banning the use of non-OEM parts in various cases.  Lower costs for consumers, healthy market competition, and lower insurance premiums would be placed at risk under AB 173.

Small businesses in the industry already face heavy regulation, and pay a hefty tax burden. Attacking them with even more restrictive regulation threatens their existence, and hurts the Nevada economy.

Nevadans who need to replace a car part should have the same choices and competitive market they enjoy today. Misguided, heavy-handed government regulation would only make their lives more expensive.

Photo Credit: Wikimedia Commons

Fight for $15 Knocks Out Jobs, Hours, Hurting Workers

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Posted by Doug Kellogg, Griffin Namin on Tuesday, March 5th, 2019, 10:53 AM PERMALINK

As many states hike their minimum wages in response to the far-left "Fight for 15" campaign, the evidence is rolling in that this policy hurts the very workers it's supposed to help.


New York City is one of the most high profile areas on the road to $15, and a high cost of living area. One might think it could absorb a radical wage mandate, but even in New York, that is not proving to be the case.


Investors Business Daily reports: “Over the past four years, the minimum wage for New York City restaurants that employ more than 10 workers went from $10.50 an hour to $15. That's a whopping 43% increase. Next year, every restaurant, big and small, will have to pay their workers at least $15 an hour."


These massive increases to wages are backfiring on all levels across the city, "4,000 workers lost jobs at full-service restaurants, Bureau of Labor Statistics data show. By the end of last year, there were fewer restaurant workers in the city than in November 2016. Even though overall employment climbed by more than 163,000."


According to a survey conducted by the New York City Hospitality Alliance, when asking full service restaurants, “74.50% respondents report that they will reduce employee hours; and 47.10% will eliminate jobs in 2019 as a result of mandated wage increases that took effect on December 31, 2018."


In addition, the survey also found that “76.50% of respondents report reducing employee hours, and 36.30% eliminated jobs in 2018 in response to mandated wage.”


The $15 wage is an attack on workers most of all. But it is also hurting restaurants - especially moderately priced restaurants in the city. Rosa Mexicana operates four restaurants in Manhattan and estimates the $15 mandated wage will increase their labor costs by $600,000 this year.


Liberal leaders in states across the nation seem to be rushing to get wage hikes, as if they want to outpace the disastrous reality that these policies will bring. That way they can get headlines and pretend they did something to help workers, before it is obvious that they aren't helping at all.


Well, time is up, and any politicians pushing a radical wage hike are doing so knowing the consequences.


Photo Credit: Flickr - Ronald Ehrl

Everything CT Governor Ned Lamont Wants to Increase Taxes On in Budget

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Posted by Doug Kellogg, Griffin Namin on Thursday, February 28th, 2019, 1:18 PM PERMALINK

New Connecticut Governor Ned Lamont has floated various tax hikes leading up to his formal biennial budget proposal, but now we have the full plan, and it’s not a cheap one for the state’s already-overburdened taxpayers.

His “A Path Forward” plan is filled with tax increases, broken promises, and high fees. The unambitious name is fitting, it’s a path alright, one terrible path to choose among other options – like finally containing Connecticut’s rising spending, and pension liabilities.

The total bill for Lamont’s revenue proposals exceeds $1.06 billion in 2020 and $1.486 billion in 2021.

The massive amount of tax hikes the Governor has proposed is led by sweeping new applications of the state’s 6.35 percent sales tax, and taking away sales tax exemptions that sensibly have been used to ease costs on necessities, like doing your taxes, or buying textbooks. The Governor’s assault on exemptions will also hurt Connecticut residents who belong to non-profit credit unions. Credit unions by their nature return benefits to members who live in the community, and often offer free educational services. And interestingly newspapers will be hit as well, maybe Lamont isn't happy with his media coverage. 

It is incredible how damaging and tone deaf these new sales tax are… Need to take your dog to the vet? That will cost more. Does your child need a bike helmet? That will cost more. Ready to drive your new baby to Mom and Dad’s house? Safety seats will cost more.

If Lamont wants more uniformity in the state sales tax, he should lower the rates for everyone, not discourage people from purchasing necessary products and services, and make it even more unaffordable to live in Connecticut.

Here’s the rundown of notable Lamont’s tax hikes (full list here):

  • 10-cent plastic shopping bag fee
  • Soda tax
  • Text book tax
  • Newspaper & magazine tax
  • Renew corporate tax surcharge
  • Boat sales tax hike
  • Bike helmet tax
  • Child car seat tax
  • Veterinary services tax
  • Credit union tax
  • Hair cut tax
  • Parking tax
  • Garbage tax
  • Camping tax
  • Nonprescription medicine tax
  • Vaping wholesale tax
  • Movie tax

This could get worse if the Democrats’ Senate Bill 475, which would increase the statewide sales tax to 6.85 percent also gains traction.

Senate Republican leaders have put forward a plan that offers no tax increases, no tolls, and lowers costs statewide.

Photo Credit: Flickr

Kentucky Sports Betting Bill with No “Integrity” Fees, Moderate Tax Rates, Heads to House

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Posted by Doug Kellogg on Monday, February 25th, 2019, 12:40 PM PERMALINK

Late last week a House bill to legalize sports betting in Kentucky was voted out of committee unanimously.

The legislation is already the center of attention, and will certainly earn more as debate heats up. It is estimated to bring in $48 million in revenue if Kentucky can beat out neighboring states in legalizing sports wagering - promising to devote that money to the state's struggling pension fund (though the only real fix for the pension fund is significant reform).

How will it get that money? That is the big question for taxpayers and consumers.

Kentucky’s legislation includes a tax rate on in-person bets of 9.75 percent, and a 14.25 percent tax rate on digital bets. These are relatively modest rates. They are higher than Nevada (6.25 percent), and New Jersey (8.5 percent in-person, 13 percent online). However, they are far lower than Pennsylvania’s absurd 36 percent effective rate.

The state’s proposed licensing fees are nothing to scoff at though, with a $500,000 initial fee and $50,000 to renew every year. Still, committee members halved an initial $1 million fee, and Kentucky is avoiding Pennsylvania’s disastrous $10 million price tag that caused a months long wait for an operator to even apply.  

There is room for improvement in their tax rates, but at least Kentucky does not have Dr. Evil throwing out demands like Pennsylvania apparently does.

Kentucky deserves credit for avoiding so-called integrity fees as well. These fees sometimes have different names, and rates, but amount to giveaways to sports leagues that serve no purpose. Government should not be using its taxing power to directly siphon off money for leagues. The leagues will already benefit if and when sports betting drives added interest in their sports. Nevada has done fine for decades without these fees, Kentucky is right to avoid them.

With Anti-Free Speech Push, NJ Pols Try to Tell New Jerseyans to Shut Up

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Posted by Doug Kellogg on Friday, January 25th, 2019, 6:20 PM PERMALINK

A politician gets heat in the media over a non-profit entity that helps promote his agenda. This politician could take responsibility, defend the situation, or disown it and urge it to be shut down.

Or… they could blame “the system”, point the finger, and push sweeping new laws to destroy free speech in the state for citizen groups and advocacy organizations.

Of course, New Jersey Governor Phil Murphy chose the latter option.

After facing critical stories about a non-profit run by Murphy allies, the governor’s efforts to make this about state law, rather than his personal situation, have led to legislation that would drastically limit free speech of New Jerseyans and citizen-groups.

The current front-running legislation is Assembly Bill 1524 (Senate Bill 1500), which sailed through committee unanimously (why the heck are any Republicans supporting this?). However, it is no sure thing that this is the legislation that leaders back for a vote.

The bill would demand donor disclosure by political action groups (even though 527 groups already have to report donors to the IRS), and non-profit advocacy organizations - of course, unions are exempt.

This would create a chilling effect on free speech, as contributors to organizations lose their right to privacy and become subject to political retribution, harassment, and more. In today’s climate of mobs showing up to people’s houses, the risk here should be more clear than ever. Further, these new restrictions would make it next-to-impossible for the average person to start an advocacy organization.

A-1524 would likely be unconstitutional as well since it goes after more than just speech intended to influence a vote within an election timeframe. Fighting a protracted court battle to silence speech would be a waste of state resources.

Further, Murphy’s non-profit may be new and tied to his agenda, but passing laws to stop or limit these non-profits would negatively impact elected officials who work for legitimate non-profit organizations with preexisting agendas.

The landmark Supreme Court case that upheld the right to privacy for donors to non-profits was Alabama v. NAACP, a case that shows how high the takes can be when states attack privacy rights.

It’s for good reason that there is a broad coalition from across the political spectrum, and covering a variety of issues that opposes the push for these anti-free speech policies.

New Jersey needs more debate and advocacy, not less. Trenton has been steering the state in the wrong direction of late, that may make it tempting to politicians to shut down people who speak out on their failures, but that doesn’t make it right.

Don’t Tell the Associated Press, But Sports Betting is Going Well In NJ

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Posted by Doug Kellogg on Thursday, January 3rd, 2019, 6:28 PM PERMALINK

A recent, widely circulated Associated Press (AP) article, entitled “Sports betting will be no home run for state budgets”, takes a negative tone in reviewing the results (so far) of sports betting in states that have recently legalized it, largely focusing on New Jersey.

It’s surprising because there is nothing negative about the results out of New Jersey since legal sports betting began there in June. Here’s a reality check…

1) The AP piece itself included numbers showing that New Jersey is on track to match or exceed the state’s revenue estimate of $25 million over one year. The state took in around $8 million through November from sports betting. Actually meeting a government revenue projection? That is a small miracle in itself.

2) To gloss over this reality, the article highlights that sports betting revenues make up a small percentage of total state budgets. Meanwhile, nobody in their right mind argued sports betting revenue would patch state budgets - especially not for big-spending states like New Jersey.

3) New Jersey sports betting is doing more than meeting projected revenue, but that perspective is missing from the AP piece. Moody’s projected that sports betting would account for 4 percent of gaming revenue, but so far it has already accounted for 8.5 percent.

4) Sports betting seems to be boosting New Jersey gaming industry revenues, which saw a 19.5 percent increase in September this year, compared to September 2017. Government took in $23 million on gaming in September alone.

5) Pennsylvania is referenced as potentially eating into New Jersey’s industry. But Pennsylvania’s tax rate on bets is a whopping 34 percent, plus the state imposes a big licensing fee. This has delayed the rollout of sports betting in Pennsylvania. Jersey’s tax rate could be better, but their Western neighbor is going to have trouble competing.

6) While legalizing sports betting the right way (with low tax rates and no fees) is good for a state economy, consumers, and yes, government coffers, these aren’t the only reasons to do it. Bringing the existing black market into the light, creating transparency for betting, and regulating a currently illegal market are also good reasons for legal sports betting.

7) New Jersey also legalized sports betting to help localities, specifically downtrodden Atlantic City - though the state has a long way to go to reduce the tax burdens, waste, and overregulation that also contribute to their economic woes.

With the right legal framework, no fees for giveaways to sports leagues, and low tax rates, the ceiling for sports betting in the digital age is sky-high. Don’t let straw man arguments distract from the reality.

Photo Credit: Flickr - Tom Lianzi

Wyoming Lawmakers Set Table for Criminal Justice Reform

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Posted by Doug Kellogg on Monday, December 10th, 2018, 5:06 PM PERMALINK

With a new year and new legislative session rapidly approaching, leaders in the Wyoming state legislature got a head start on criminal justice reform.

The state desperately needs additional reforms as the prison population has boomed, overloading the state system, and leading to added costs for holding prisoners in county jails and private facilities.

Without any adjustment, the state would be hit with an estimated $50 million in added costs. To set the table for reform to address the issue, the legislature’s Joint Judiciary Committee endorsed three draft bills to reduce the prison population in a way that prioritizes public safety.

Parole and probation reform are the center of the reforms. Ensuring supervision is used to protect the public and in a way that facilitates reentry to society, rather than tripping up former offenders, would go a long way toward curbing prison population.

One measure advanced by the committee would cap probation terms to avoid wasting limited state resources supervising people who have not broken their probation terms for years. Another would provide more options for judges in sentencing. They could sentence offenders to unsupervised probation, and reduce sentences based on assessments of their risk to public safety.

The high costs are a sign that something is wrong with the system, and an impetus for reform. But the end goals of public safety and stronger families and communities must remain the focus.

NJ Licensing Reform Bill Would Create Jobs, Reduce Crime

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Posted by Doug Kellogg on Monday, December 3rd, 2018, 10:15 AM PERMALINK

One major issue for former offenders who have served their time and are trying to reintegrate into society is finding a job. There is probably nothing more important for rebuilding their lives than being able to find work, contribute, and earn a living. Without that stepping stone, they are more likely to commit a crime again - which adds avoidable costs to our criminal justice system.

The last thing government should do is get between ex-prisoners and a job. Yet, that is exactly what is happening through occupational licensing regimes that are complicated and costly.

This is a problem in many states, including New Jersey. Now, a bill sponsored by Assemblywoman Lopez, and Senators Singleton and Gill (A3872/S1589) would do something about this issue in the Garden State.

Currently, New Jersey has a broad morality requirement that means anyone with a prior conviction can be denied an occupational license even if the crime was not related, happened a long time ago, the person has not committed a crime since, and they can show they are on the straight-and-narrow.

An ex-offender applying for a license can put in time, effort, and money, and be denied for a past unrelated offense with no chance to fix the situation.

To address these issues, A3872 would require that occupational licensing boards consider whether an offense was directly related to the profession an applicant is seeking, and would impact their ability to do the job. Boards would also have to give notice to applicants if their past conviction was going to be a problem. And sex crimes would still be considered relevant for disqualification from any license.

This would go a long way toward making sure people who've committed non-violent crimes, been punished, and applied themselves toward training and a career, are not needlessly barred from working.

People who were denied would be given clear reason, and could take steps to further rehabilitate, and reapply at a later date.

This kind of common sense reform earns broad bi-partisan support for good reason. The vast majority of prisoners will be released one day. The best way to make our criminal justice system more effective and efficient is to ensure they are ready to become productive members of society. That cannot happen without meaningful work.

A3872 would create jobs and reduce crime. It deserves consideration and support in the legislature.