Texas Business Report: Lege Your Bets

Some think the state should lessen its 14 percent tax on mixed drinks for bars that present live music more than four times a week.
Fri March 29, 2013 3:00 pm
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Lege Your Bets
Texas lawmakers are considering a constitutional amendment that would pave the way for casino resorts in several cities, potentially generating as much as $50 billion in new revenue for the state. The Austin Business Journal reports the proposed bill would do this by “creating the Texas Gaming Commission and authorizing and regulating the operation of casino games and slot machines by a limited number of licensed operators and certain Indian tribes.”

Specifically, the measure would authorize three resorts in Dallas, Fort Worth and San Antonio, and three smaller casinos in Corpus Christi, Galveston and South Padre Island, according to the ABJ. The $50 billion economic windfall would come in the form of development, tax revenues, and about 100,000 new jobs.

The Bottom Line : Legalizing casinos is a perennial issue in the legislature, and previous bids have failed due to concerns over crime, gambling addiction and financial issues. But public support seems to be gradually rising: A recent poll by Austin NBC affiliate KXAN indicated that 64 percent of voters now support casinos in Texas, 28 percent are opposed, and 8 percent are unsure.

Gig and Take
Longtime Austin City Limits producer Terry Lickona called upon Texas music fans this week to support new legislation that would provide a financial boost to venues that regularly host live performances. The three bills would reduce taxes on alcoholic beverages and sales of sound and lighting equipment , which Lickona says would “create an incentive for venues to book more live music, thus contributing to the economy and culture of our state.”

At issue is the state’s 14 percent tax on mixed drinks, which the legislation proposes to cut in half for venues that present live music at least four times a week. Austin Music People, a music community nonprofit in Austin, wrote on its Facebook page that the tax break would allow venues to “pay artists or sound guys, invest in decent sound systems, fix an old stage, hang lights, maybe even add additional nights of music.”

The Bottom Line : The bills have been referred to the Senate Committee on Fiscal Matters and the House Ways and Means Committee, respectively, pending further discussion.

Scootin’ and Hollerin’
Looking to crack down on unnecessary Medicare spending, government officials have honed in on the nearly $1 billion market for motorized scooters and other mobility devices, the Associated Press reported this week. Doctors and Washington lawmakers are accusing companies including The Scooter Store, the industry’s top retailer, of running advertisements that cater to people who don’t qualify to receive the devices under Medicare.

In February, the company’s New Braunfels headquarters was also the target of a government raid investigating Medicare and Medicaid fraud.

The federal health program is “only supposed to pay for scooters when seniors are unable to use a cane, walker or regular wheelchair” as prescribed by a doctor, but health providers have accused The Scooter Store and others of marketing the devices as “a convenient means of transportation rather than intended as a medical necessity,” according to the AP.

The Bottom Line : The government estimates that as many as 80 percent of all motorized mobility devices subsidized by Medicare are sold to customers who don’t medically qualify—and the unnecessary spending could total in the hundreds of millions of dollars. The Scooter Store says it disqualifies nearly 90 percent of customers who request Medicare reimbursement for failing to meet requirements.

Winners of the Week: Air Traffic Controllers
Control towers at 13 small- and medium-sized Texas airports will remain open after Gov. Rick Perry stepped in this week to replace funding that was slashed as part of the federal budget sequestration. Perry sent a letter to the Texas Transportation Commission on Wednesday requesting that the state provide “emergency assistance to keep the control towers open for the next 90 days, calling them a ‘vital safety network,’” The Austin American-Statesman reports. The next day, The Texas Department of Transportation agreed to pick up the tab.

Faced with a mandate to cut $600 million from its budget, the Federal Aviation Administration will stop funding 149 towers nationwide in April—including the 13 in Texas. In the next three months, state officials will work on a long-term solution to come up with the $7 million in annual costs needed to keep the towers open, according to the Statesman. 

Loser of the Week: Tom Horton
Outgoing AMR Corp. CEO Tom Horton may not get the $20 million parting gift he was expecting as part of the merger deal between AMR-owned American Airlines and US Airways, The Wall Street Journal reports. A federal bankruptcy judge this week called the exit package “inappropriate,” and a Justice Department official accused the company of attempting to skirt federal laws that limit executive compensation at bankrupt firms.

The court did approve the rest of AMR’s proposed merger plan, sending it along to the company’s creditors for a vote. But according to the Journal, Horton’s severance packaged could eventually be reconsidered.

 

 

 

 

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