Allied Charities of Minnesota

News

  • 07 Feb 2019 16:03 | Allen Lund (Administrator)

    Members,

    Today our tax bills SF437 (Sen. B. Anderson), SF845 (Sen. Relph), SF414 (Sen. Eichorn), SF219 (Sen. Nelson), SF549 (Sen. Ruud), SF371 (Sen. Koran), SF578 (Sen. Draheim) were heard in the Senate Tax Committee. All bills were held over for possible inclusion in an Omnibus Tax bill. That is the best that we could have hoped for. At the end of this message were my prepared comments.

    These seven chief authors (along with their respective co-authors) stood up for YOU today. They stood up for the charities in their district and the rest of us throughout the entire state. It is not universally agreed upon that your organization needs relief. These Senators stuck their necks out for YOU. YOU need to thank them. If one of these Senators represent YOU, YOU really need to thank them.

    A large thanks to Tax Chair Senator Chamberlain as well. He is calling attention to our problem. He is showing us what a leader does, taking on issues that need fixing when not everyone agrees it is a problem or needs fixing.

    There were four charities that came to testify. More would have come, but the weather was not conducive to travel. An American Legion, a VFW, a youth group and a group that works with individuals with disabilities all told their stories.

    The Senators on the tax committee listened when I talked, but they really listened when those folks talked. Those are the stories that hit home. Senator Ruud had similar examples from charities in her district that outlined their particular situations and those were quite impactful as well.

    Letting your legislators know how the taxes that you are paying is impacting your ability to serve your community is as easy as: Dear Senator Limmer/Representative Bahner, Al Lund, member of the Osseo Lions and a constituent of yours. Due to charitable gaming, in FY2107 we were able to donate $106,000 to our missions/community and paid $131,000 in taxes and fees to the state. In FY2018 we were able to donate $132,000 to our missions/community and paid $150,000 in taxes and fees to the state. I think that this is wrong, we should not be paying more in taxes and fees than we have for our communities and missions. We need your help to get it fixed. Please let me know if you are willing to be part of the solution or you have any questions of me. Regards, Al

    This is the kind of information that the legislators need to know in order to be prepared to stand up and be counted as supporting us.

    Defenders of the current tax policy are still playing the same old saws: It’s your expenses, especially your wages (this was supposed to be all volunteer labor after all) and only 10% of you pay the high taxes. Ignore the FACT that 340 of us (30% of us) are upside down, paying more to the state than we have for our communities/missions. Ignore the FACT that 60% of us pay at least three times what a for profit business in Minnesota pays. Ignore the FACT that since 2013 our ability to serve on a per dollar wagered basis has declined by 30%. Ignore the FACT that we pay up to SEVEN times what a for profit business in Minnesota pays. If nothing is done this year to deliver relief, next fiscal year we will be sending the state in excess of $100,000,000. Say that our loud, ONE HUNDRED MILLION DOLLARS.

    No news on a House Tax Committee hearing, but requests have been made.

    Regards,

    Al

    Allied Charities of Minnesota (501c6 trade association representing licensed gaming charities) comments:

    SF219 & SF414 would exempt donations from the combined receipts gambling tax.

    SF371 would reduce the combined receipt tax rates for licensed gaming charities from the current 9/18/27/36% to 6/12/18/24%. 

    SF437 & SF845 would eliminate the sales tax on paper games and the electronic revenue share. Chapter 297E (our tax chapter) .02 Subd 1 says: The taxes imposed by this subdivision is in lieu of the tax imposed by section 297A.62 (sales tax imposed). Sales tax takes 3+ million from our mission dollars that is an expense, not part of gambling taxes/fees.

    SF549 would reduce the combined receipt tax rates from the current 9/18/27/36% to 4.5/9/13.5%. Paper bingo, raffles and paddlewheels would be reduced from the current 8.5% to 4.25%.

    SF578 would reduce the combined receipt tax rates from the current 9/18/27/36% to 6/12/18/27%.

     

    It has been reported that charitable gaming will remit over $95 million in gambling taxes/fees to the state in FY2019. That is more than double the $40 million of just six years ago. Without change and even a modest growth rate of 6% we will break the 9 digit barrier and remit more than $100,000,000 to the state in gambling taxes and fees in FY2020.

     

    Since FY2017, as a group, licensed gaming charities pay more to the state in taxes/fees than they have for their communities and missions. The proposed changes would help to ensure that charities do not pay more to the state than they have for their communities and missions.

     

    In the 2012 stadium legislation, we believe that the intent was for gaming charities to continue to pay $36.9 million into the general fund and pay the annual stadium bond payments of $31 million.

     

    If the FY2019 projection of charities remitting $95 million comes to fruition (our business in on track for a 15% increase in FY2019, a seventh year of double digit increases) we will be sending the state $27 million more than is needed for the general fund and stadium bonds.

     

    Since FY2013 our ability to serve our communities and missions has dropped from 5 cents per dollar wagered to 3.5 cents per dollar wagered in FY2018, a 30% decline. If that decline is not reversed, at some point charities will not continue carrying a gambling license.

    Local needs are growing at an alarming rate. Local charities can respond to local needs faster and more economically.

     

    Licensed gaming charities are allowed no deductions of any kind prior to determining our tax liability.

    We pay taxes on our expenses. We have been told that if we were allowed to deduct our expenses we would just grow our expenses.

    We pay taxes on our donations. We have been told that if we were allowed to deduct our donations we would just grow our donations!

    Our effective tax rate can be as high as 72%, over seven times higher than the current state tax on businesses of 9.8%. 

    Per the FY2018 Gambling Control Board Organization Annual Report, 340 charities (30% of us) pay more to the state than we have for our communities and missions.

    495 charities (43% of us) pay at least 40% to the state of what remains after paying expenses.

    687 charities (60% of us) pay at least 30% to the state of what remains after paying expenses.

    Groups such as Jackpot, FanDuel and Draft Kings ply their trade in Minnesota. They add no socially redeeming value to Minnesota. If they pay any state tax at all, they pay the 9.8% business rate.

    While we are not the only group that does good deeds in Minnesota, we are the only one that I am aware of that pays for the privilege of doing so.

    ACM supports all of the efforts to increase the amount of funds remaining in our local communities. Thank you for your time. We ask for your support of these bills.


  • 18 Jan 2019 06:09 | Allen Lund (Administrator)

    Members,


    We have our first bill numbers of the session. See attached. 


    The premise with all of our bills this year is that there is enough money to ensure that the stadium bonds are paid, there is money for the general fund and there is more than enough to give us relief. Our bills are designed to be a win/win for the state and us.


    HF69/SF219 will exempt our donations from the gambling tax. It is projected by the state to be a $30 million dollar reduction in our taxes. I would put it in the range of $20 million, but I will take either one. SF219 chief author is Senator Nelson. Co-authors are Senators Chamberlain, B. Anderson, Kiffmeyer and Ingebrigtsen. HF69 chief author is Representative Dettmer. Co-authors are Representatives Ecklund, Davids, Gunther, Nornes, Pierson, Erickson and Nash.


    HF81 would change the current 8.5% flat rate to 4.25% and reduce the combined receipt rates from our current rates to 4.5%, 9% and 13.5%. Rep. Lueck is chief author. There is currently no senate companion bill. 


    If any of these legislators represent you, make it a point to thank them. 


    I am being told that we are on pace to send in $95 million dollars in gambling taxes this fiscal year. If that number does not get your attention, I am not sure what will.


    If we do not get relief this year, which is a tax bill year, our chances diminish for 2020 as it is not normally a tax bill year. Anything can happen, but we need to make our case this year.


    Contact your legislators. Ask your Representative to sign onto the bills. The Senate side is full, no other authors can be added. Ask your Senator to support the bill.


    Ours is not a political issue it is a community viability issue. We need both sides of the aisle to support our efforts. If we are not around to support our local communities it will fall on the state to do it. 


    There are other bills that will be coming out in the next couple of weeks. After that it will be waiting for our bills to be heard in committee.  


    This is a marathon not a sprint, but we need a good start to create momentum for our initiatives.


    Attached you will also find invitations for the 4th Annual ACM Legislative Reception. It is being held at the Best Western Plus Capitol Ridge hotel on Monday, March 18th from 5 to 7 pm. Invite your legislators to attend. It is a time to talk to them in a social setting.


    Regards,

    Al Lund

    2019HF0081-0ratereduction.pdf

    2019SF0219donationsexemptfromgamblingtax.pdf

    2019HF0069-0donationexemption.pdf

    2019ACM Legislation Invite 1up (1).pdf


  • 11 Jan 2019 05:37 | Allen Lund (Administrator)

    Members,

    Last Saturday I was at the American Legion 10th District Mid-Winter convention, of which my home Post 172 Osseo/Maple Grove is a member. There were 125 or so of us; Legion, Auxiliary, Legion Riders and SAL members. In attendance were people of all ages, but we were predominantly older in age. Most of us had served our country years ago. There were veterans from every conflict since Korea.

    The common denominator among those in attendance was their desire to continue to serve. They don’t do it for the recognition or any profit motive. They do it for their fellow human being. They do it to make their community a better place to live.

    I was asked by our District Commander Paul Orson to say a few words about charitable gaming and what ACM’s goals were for the upcoming session. I talked about the taxes and fees that we pay and how we are now paying more to the state than we have for our veterans and communities.

    The attendees had a look on their faces that was easily recognizable to me. I always struggle to put into words the look on people’s faces when you tell them that the government that they have sworn to uphold is treating them like anything but an ally.  

    We are on pace to send the state $90 million in taxes/fees this fiscal year. The 2012 stadium bill was designed for us to pay $36.9 million into the general fund and to make the $31 million dollar annual bond payment. It was not designed for us to pay off the bonds early, pay for improvements or pay for future building projects. We will be sending in $22 million more than is needed to cover those two amounts this fiscal year. Either having our donations exempt from the gambling tax or lowering the combined receipt rates to 6/12/18/24% would be a remedy for us.

    In short order we will have bill numbers for our tax relief bills. When you get those numbers you need to contact your legislators and tell them that relief needs to be delivered this session and that you want them to support these bills. On the ACM website under Legislation you will find who the state senators and state representatives are for the 2019/2020 legislative years as well as what members are on the Tax and Gambling Policy committees that we need to work through on our issues. You will also find a link to who represents you.

    Those of you that were in Bemidji may remember Mark Irving from Canterbury Park. Mark tells me that Canterbury is holding an open house on Thursday, January 31 from 3 to 7 pm and that all gaming charity members are welcome. Hope to see you there. https://www.canterburyparkevents.com/events/open-house/ to RSVP.

    Regards,

    Al Lund

  • 14 Dec 2018 04:50 | Allen Lund (Administrator)

    Members,

    Attached you will find an article on stadium funding that was published in the Star Tribune this past Wednesday (Dec. 12).

    In the article the current administration recommends moving the annual $20 million in corporate money from the stadium fund back to the general fund. Doing that would leave only our money ($38 million in FY2018) to cover the annual stadium bond payment ($31 million), which would cover the stadium bond payment, but effectively negate our chance for real tax relief.

    Our proposal for dealing with the stadium bonds is to put our first $35 million into the stadium fund, leave the $20 million from corporate and provide tax relief to charities by reducing the combined receipt brackets by 10% a year as long as we maintain the $35 million for the bonds. That would ensure that the bonds are paid for, leave money for future repairs/remodeling, provide the potential for early payment of the bonds and provide us relief.

    Fortunately there is a new day coming in a few weeks. Time will tell what the new administration and democratic house leadership have to say about the issue. We are getting indications from the senate that relief for us will be in their 2019 legislative agenda. We are hopeful that the governor-elect, the house and the senate will be willing to listen to win/win strategies that benefit all parties.

    The past two weeks I have been preparing recaps of FY2018 licensed charitable organization gaming results for each state senate district. I am always humbled and in awe when I see what is going on in over 1100 licensed gaming charities in every corner of our state.

    We are a diverse group of lay people helping those in need in our community. We don’t do it for glory or personal gain as our opponents like to claim. We do it for the right reasons, all designed to make the state a better place to live. As I have previously said, if everyone in the state belonged to organizations like ours the state would be better off.

    As has been pointed out to me by state officials on several occasions, we are not the only folks doing good deeds in Minnesota. But, when looked at as a group there is nobody else that even comes close to making the impact that we do on a statewide basis. I am not saying that as a boast, I am saying that as fact and a point of immense pride.  

    One would think that non government aid would be encouraged by state government, but that is not the case for us. There is very little recognition by state government of the good works that we do and the contribution that we make to the state coffers. We are accused by state legislators of being self serving and of taking advantage of our patrons. There is no apparent quenching of state government’s thirst for the results of our combined efforts. $40 million in FY2013 did not quench their thirst; $80 million in FY2018 is not doing it either.   

    I received a call from an organization this week that is well below the state average in the percentage of their net receipts that goes to expenses that paid 59% of what remained to the state in taxes and fees FY2018. In November they lost money at three of their six sites. They (and I as well) cannot understand why the state would put such a burden on organizations like theirs that are only trying to do good for others.  

    When you think about how we are treated by the state it is hard for me to comprehend. I believe that gambling is an activity that should be taxed. But, I do not believe that groups whose sole existence is to help others need pay the state more than we have for our community and missions.

    There was a day when such taxation would have never been considered yet allowed by our elected officials. I believe it was Ann Landers who said “no one can take advantage of you without your permission”. The state is taking advantage of us. As a group we need to decide if we are going to continue to let that happen.

    While I am disappointed in how the state treats us, I am disappointed in us as well. Getting the state to stop their current treatment of us will take effort on our part. ACM alone cannot make this happen. I hear from charities that ask why they need to get involved as they thought that is why they paid ACM membership dues.

    It is a problem when I talk to a legislator who tells me that no person from their district has ever talked to them about our tax issue. Legislators don’t address issues like ours that their constituents don’t care enough to talk to them about.

    ACM is one voice in a choir of thousands at the legislature, all looking for something from them. Our difference is that we are looking for justice not help. A non-profit paying on average five times (and up to seven times) in taxes what a business pays is wrong. We are not asking what government can do for us; we are saying that we want to be part of the solution to the funding of state government, but asking to be taxed and treated fairly in return. I for one do not think that is asking too much. Do you?

    Find out who represents you at https://www.gis.leg.mn/iMaps/districts/

    Regards,

    startribune20181213120444057.pdf

  • 07 Dec 2018 06:07 | Allen Lund (Administrator)

    Members,

    NEWS FLASH: The budget forecast released on December 6 predicts a $1.5 billion budget surplus, PLUS $2 billion in reserves.

    Next week the senate republican majority will be together at a retreat to discuss issues and plans for the upcoming legislative session.

    If you think that tax relief for licensed charitable gaming organizations needs to be on their agenda and your senator is a member of the republican majority, you need to let them know that right away.

    To find out who your senator is or how to contact them, use this link https://www.gis.leg.mn/iMaps/districts/

    Tell your senator what your organization paid in taxes and fees in FY2018. Tell them the percentage of what you had left after paying your expenses went to the state in taxes and fees.

    Many of you are now working longer for the state than you are for your community and mission.

    Tell them what more you would be able to do in your community if more of the money that you raised locally stayed local.

    ACM is working to educate every legislator on how the licensed gaming charities in their respective districts fared in FY2018.

    All of the education that we do here at ACM rings hollow with legislators if they are not hearing from the members of the organizations in their respective districts.

    Regards,


  • 26 Nov 2018 10:27 | Allen Lund (Administrator)

    Electronic Pull Tabs: The cure for what ails charitable gaming?  

    As I have returned home from Bemidji I have seen several “news” stories on how electronic pull tabs are now saving the day by paying for the Viking’s stadium with the potential of paying off the stadium bonds early.

    As I am wont to say, let us peel that onion back a little further.

    First off I want to reiterate that ACM is not anti electronics. Tools that deliver more profit per dollar wagered are preferred to tools that deliver less profit per dollar wagered.  

    A little fact checking shows that all of our first $36.9 million in charitable gambling taxes goes into the general fund each fiscal year.  After that all charitable gambling taxes go into the stadium bond fund. In FY 2018 we paid $38.1 million into the stadium fund and the corporate unitary tax paid in another $20 million. In total, the stadium bond fund received $58.1 million, almost double the $31 million needed to make the bond payments. The stadium fund resides in the general fund. There is no funding of this type from dedicated accounts. The ability for the state to pay off the bonds early does not come into play until FY2021/22.

    In my initial review of the GCB FY 2018 annual report the following occurred:

                    Sales grew by $300 million ($1.7 billion to $2 billion) +15%

                    Payout grew (83.4% to 84.3%) +1%

    State taxes/fees grew by $9 million ($72 million to $81 million) +12.5%

    Mission dollars grew by $6.5 million ($66 million to $72.5 million) + 10%

    Rent grew by $4 million ($27 million to $31 million) +15%

                    Cost of all games grew by $9.1 million ($34.7 million to $43.8 million) +26%

                    Cost of paper games grew by $1.7 million ($25.7 million to $27.4 million) +7%

                    Cost of electronic games grew by $7.4 million ($9 million to $16.4 million) +82%

                    Paper games provided 72% of our net receipts and represented 63% of our total product cost

                    Electronic games provided 16% of our net receipts and represented 37% of our total product cost

    At the current electronic revenue share rates, if all of our paper games transitioned to electronic games, total product cost would increase by $55 million to $97 million. Mission dollars would drop to $48 million. 

    The number of charities that are now required to conduct an outside annual audit has increased to 630 from less than 500 three years ago.

    Our net per dollar wagered declined from 3.84 cents in FY 2017 to 3.62 cents in FY 2018.

    The GCB Organization Annual report now includes a column of cash on hand. It shows that charities had $52 million dollars on hand at the end of FY2018. That sounds like a lot of money. Organizations saving for big ticket items (fire relief, hockey, snow, conservation and youth) rarely have the funds available to make a sizable purchase, except over time. $52 million divided between all of our organizations is $45,000 per organization. The number is a snapshot in time on a given day of a given year. If all organizations operated on the State’s fiscal year, that number would be vastly reduced. There are safeguards that have been put in place by the state of Minnesota and the federal government to ensure that an organization is not raising funds for the sake of raising funds. In fact, those same safeguards penalize us for holding on to cash beyond the end of our fiscal year. Those of you that have paid state and federal unrelated business income tax (UBIT) know the price imposed for not spending the funds that you have raised.  

    Thanks go out to you that were in Bemidji. I hope that you learned a lot, laughed a lot and thoroughly enjoyed yourself. In 2019 we will be in Rochester November 21 – 23.

    Applications for one year At-Large board members are being accepted until Monday, December 3. Applications can be found on the ACM website www.alliedcharitiesmn.org At-Large board members will be chosen by the ACM Regional Directors at the December 17 board meeting.

    Regards,


  • 20 Oct 2018 06:21 | Allen Lund (Administrator)

    Notice of Intent: notice-of-intent-to-adopt.pdf

    Rules Draft: RD4555 10172018.pdf

  • 05 Oct 2018 08:42 | Allen Lund (Administrator)

    Members,

    Update on Bemidji. There are hotel rooms available. The AmericInn, Best Western and Holiday Inn Express will have their ACM room blocks open until November 2. The Quality Inn and Super 8 will close their room blocks on October 15. See contact information below.

    We currently have 35 seminars being offered. 5 by the Gambling Control Board, 2 by the Department of Revenue, 2 by the Department of Public Service, 2 by ACM Attorney Mary Magnuson, 2 by Tom Horner, 2 by Mark Irving, 8 ACM Group Discussions and 12 by Exhibitors. Seminar descriptions will be out later this month.

    Thursday night we have our pizza welcome party and we also have C Willi Myles entertaining us. We consider C Willi a member of the ACM family. He is a gifted entertainer.

    Friday afternoon we will be having a cash bingo session with a must go $1000 cover-all being conducted by the North Country Snowmobile club. All proceeds are going to the Bemidji area food shelf.

    Friday evening is the banquet and entertainment by the Johnny Holm band. Johnny is a Minnesota legend that is not to be missed.

    If you have not registered for the convention, there is still time to do so. Registration is attached. Additional information can be found on the ACM website (www.alliedcharitiesmn.org) under the Convention & Expo tab.

    Come to Bemidji. You will learn, share, have fun and be entertained. Hope to see you there.

    Regards,

    Al

    AmericInn Lodge and Suites $99.90 per night (tax not included).  218-751-3000. 3.93 miles from the Sanford Center.  Shuttle bus service provided.

    Best Western $99.00 per night (tax not included).  218-751-0390. 4.84 miles from the Sanford Center.  Shuttle service not provided, free parking at Sanford Center.

    Holiday Inn Express $104.95 per night (tax not included).  218-751-2487. 3.92 miles from the Sanford Center.  Shuttle bus service provided.

    Quality Inn $103 per night (tax not included). 218-444-7700. 6.42 miles from the Sanford Center.  Shuttle bus service not provided, free parking at the Sanford Center.

    Super 8 $88.98 per night (tax not included). 218-308-9046. 4.5 miles from the Sanford Center.  Shuttle bus service provided.


  • 28 Sep 2018 04:40 | Allen Lund (Administrator)

    Members,

    My prediction is that when the FY2018 numbers come out they will show that since the passage of the 2012 stadium bill we have had less bottom line dollar growth than the bar, state or distributor/manufacturer.

    If you had told me that a charitable, need based community safety net would be changed in such a way as to benefit others more than the charity, I would have said “Not in Minnesota, no way, no how. That is not who we are”. But yet here it is.

    Our legislators are being told that we are not good stewards of the dollars that we receive, that we are self serving and keep dollars for our own use that would otherwise go to the needy.   

    Those that want to keep the status quo are saying “It’s their expenses; they pay their sellers, they pay their gambling manager, they don’t comparison shop their paper games and they have more dollars than they had six years ago”.

    There is no explaining away that the reason for charitable gaming, helping those in need, is the lowest rung of the profit ladder since the passage of the stadium bill. Six years is a long time. The numbers are not an anomaly; they are a trend that needs to be addressed.

    We are being made out to be less than honorable. Our character and integrity is being called into question. As a whole you are the most caring, selfless group of people that I have ever had the privilege to be associated with. I have seen your good works. I know your dedication and the sacrifices you have made.

    I understand the reluctance to get involved. Many of us believe that it will not do any good, that nothing we say or do is going to get our legislators to come to our aid. I am not telling you that contacting your legislators will bring about change. I am telling you that if you are not willing to defend your honor, nobody else will either.  

    Take time to review your own numbers from FY2013 through FY2018. See who benefited the least and who benefited the most. Share that with your legislators.

    Find out who represents you at https://www.gis.leg.mn/iMaps/districts/ Talk to them about the difference that you make in your community, what more you would be able to do if more money stayed in your community.

    Below are the contact links for the Walz and Johnson campaigns along with a link to a recent Forbes article on the worth of NFL franchises.

    https://walzflanagan.org/contact/

    http://www.johnsonforgovernor.org/contact

    https://www.forbes.com/nfl-valuations/list/#tab:overall

    Regards,


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