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Our Opinion: State taking too much tax from charitable gambling

"Charitable Gaming in Minnesota is dead at 72."

That was the headline of an emailed "obituary" sent out Wednesday by Allied Charities Minnesota, the association that represents charitable gambling in the state.

The email explained why it made such a statement: "Details are not yet fully in, but indications are that on June 30, 2017 Charitable Gaming in Minnesota crossed the Rubicon. Reports are that in fiscal year 2017 sales were up 12 percent, but taxes were up 16 percent. As a result, more money went to the state than there was for local needs."

If true, it's a sad statement on the state's desire for tax revenue over the needs of local organizations.

The obituary for charitable gambling might have been intended as a tongue-in-cheek delivery of dour news, but for Allen Lund, executive director of Allied Charities Minnesota, the writing was on the wall when he visited the Dispatch editorial board in late May.

Lund said it all started in 2012, when the Legislature tied taxes on charitable gambling to stadium funding. The result was charities paying more in taxes than they give out in donations.

Now, Lund noted, charitable gambling is taxed at seven times the rate as a corporation and about three organizations a month are dropping charitable gambling.

"If we don't do something, (charitable gambling) will go away, and some of those receiving the charitable donation will be hard-pressed to survive," Lund said.

Charitable gambling tax reform was brought up to the Legislature this past session, but neither Republicans or Democrats appeared to want to fix the system. Sandy Johnson of the Baxter Lions and regional director for Allied Charities Minnesota told the editorial board an exception was Rep. Josh Heintzeman, R-Nisswa.

Essentially, the Legislature is sending a message that it wants to help billionaires who own sports teams more than helping organizations who depend on charitable donations to operate. If true, that's sad. And it's a disgrace that the state sees the money it receives from the taxes as more important for a stadium than its intended purpose, which is to help those groups who help people in need.

We truly hope the reports of the death of charitable gambling in Minnesota is greatly exaggerated and our local legislators will take up the cause next session. The bottom line is proceeds that nonprofit groups raise from charities stay in our communities, helping out local people.

And who would know better how such funds should be spent. The locals who raise the money and know of the needs or the state who collects too much of it?