Allied Charities of Minnesota

News

  • 24 May 2018 08:55 | Allen Lund (Administrator)

    Attached are an article on sports book and an op-ed submitted to the Star Tribune.

    sportsgamblingarticle05222018.pdf

    Op-ed sports book 05222018.pdf

  • 24 May 2018 08:52 | Allen Lund (Administrator)

    The 2018 Legislative session in review:

    As I grow older, I pay less attention to what men say.  I just watch what they do.  Andrew Carnegie.

    The 2018 legislative session is now over.  There were several bills passed in the last days that are now on the governor’s desk.  He has fourteen days to either sign or veto them.  Charitable gaming is not included in any of these bills. 

    This year charitable gaming had nine bills in play; 3 tax relief related and 6 policy related.  Not one made it to the governor for his signature.  The house and the senate both have republican majorities.  Watch what they do.

    The legislature provided more than one billion dollars of tax relief in the 2017/2018 biennium without one dollar going to charitable gaming.  Not even our sales tax relief of $2 million dollars made it to the governor’s desk.  Governor Dayton did not indicate that he had an issue with sales tax relief for us.  How do I know that?  Because the fiscal note on sales tax relief was realistic.  When a sitting governor (no matter which political party) has no issue with or supports a proposal, the fiscal note is realistic or even low balled.  When the governor does not support the proposal, the fiscal note comes back highly inflated.  That is what happened with the fiscal note on our donations being exempt (HF226/SF419), our fiscal note was double what the real cost would have been.  Watch what they do.

    I thank the house, specifically Chair Knoblach for authoring and Chair Davids for putting the sales tax relief in the house omnibus tax bill.  Thanks to Chair Dettmer for all of his support in the house.  You need to ask your senator the reason that they did not put relief for us in their omnibus bill.  What (or who) is the hold up?

    Even the task force bill to study our tax structure went nowhere.  Those that do not want change for us could ill afford a study saying that we are being taken advantage of.  Watch what they do.

    This was a frustrating session in the sense that we could not get traction on our bills.  Getting authors was difficult and getting hearings was even more so.  I tried repeatedly to find out what was going on and was met with silence.  Eventually I pieced together the story that the republican majority was not pleased with our rabble rousing for tax relief as they believed that we were blaming them for not getting relief.  I was told by the republican majority that the governor was the one stopping relief for us.  I found that hard to believe.  I do believe that the governor would have liked nothing better than to veto one of our bills, but the republican majority never gave him that chance.  It would have been political genius to send the governor a bill (as in HF226/SF419) with tax relief for us knowing that he would veto it.  Think of the hay that the republicans could have made with that this upcoming election cycle.    

    The message was that the limited action on our bills and none getting to the governor’s desk was our reward for biting the hand that feeds us.  The inference was that if we would have just kept quiet we would have gotten relief.  If you believe that I have a bridge in Brooklyn that I would sell you at a reasonable price.  This behavior is what happens on elementary school playgrounds, it has no place at the legislature.  It is my job to advocate for you and I will do that as long as I possibly can.  I have very few friends among the politicians at the Capitol.  I count you all as my friends, folks that work their tails off for three cents on the dollar to make their communities a better place to live. 

    There were three positives that did come out of the 2018 session:

    • 1.       We stopped the Daily Fantasy Sports bill.  Giving the keys to the state to for profit companies based outside of Minnesota did not pass. 
    • 2.       For five years we were told that there could be no relief for us as the stadium bill was locked up tighter than Fort Knox.  We now know that was a big fat whopper. 
    • 3.       We now know that the stadium reserve fund is cash rich and legislators are not afraid to spend it, just not on us to date.    

    We made a difference.   We stood up for ourselves.  We did the right thing for our missions and our communities.   While it did not yield tax relief we made progress. 

    From a few days after the 2018 legislative session concludes until the day before the 2019 session begins next January there will be hundreds of fund raising events for legislators and their respective parties.  The price to play in this arena is hundreds of dollars to thousands of dollars per event.  Lobbyists, PACs and for profit companies will contribute millions of dollars in anticipation of favorable outcomes in future legislative sessions.  ACM will not be at any of these events as it is against the law for us to give money to legislators.  Even if it were legal, we could never compete with for profit companies.  I have never seen a study (and probably never will) that cross references donations with favorable legislative action (either policy, bonding or tax relief), but that would be an interesting piece.

    Our greatest strength is also our Achilles’ heel.  We persevere no matter what the odds.  We will cinch our belts a little tighter and lean a little more into the wind.  We will not give in, we will not give up.   Government knows this and uses it against us.  Watch what they do.

    A politician’s Achilles’ heel is that once elected they soon come to believe that they are untouchable.  They take to heart what the lobbyists tell them about how smart and above average they are.  Accompany that with money and more money and most of us would also succumb.  Those that inhabit 44.952 degrees north/93.1022 degrees west come to see themselves as something quite special.  Our legislators are not royalty, they are not more important than you or I.  They are there to represent their constituency.  They do not need to agree with everything that you think needs to be done, but they need to be able to articulate a cogent argument as to why not when they don’t. 

    I am coming to believe that we are seen by our government as a competitor.  No other explanation for our poor treatment by government makes any sense.  Our legislators stand idly by as our seventy three year old state wide safety net dissolves in front of their very eyes.  Why would legislators keep taking more money from us than is needed when our only reason for existing is to help the less fortunate?  Legislators can tell us all they want that they care about what we do, but giving us no relief for our confiscatory tax burden is the true indication of what they really think of us.  Watch what they do.

    We were used in 2012 to get a stadium built.  Our message to government is that the stadium is built, you got what you wanted.  The stadium reserve fund balance shows that it is now time to lighten up on the charities.  Not doing so makes you appear to be mean and spiteful.  Not a legacy to strive for. 

    Closed circuit to LBV of BWI.  Time to tell you know who to lighten up.  Cannot believe that this is what you want.  Call me when you are not busy.    

    This summer we will work on legislative initiatives for the 2019 session.  I believe that having our donations exempt and changing the combined receipt brackets to 6/12/18/24% are two things that are worthy of our consideration and long overdue.  I hope that you agree.

    I would never tell you who to vote for, but you will have the opportunity this November 6 to decide who represents you.  I urge you to exercise that right.

    Fate whispers to the warrior “you cannot withstand the storm”.  The warrior whispers back “I am the storm”.  Author unknown.

    Be the storm.


  • 11 May 2018 07:51 | Allen Lund (Administrator)

    Members,

    With ten days to go before the end of the 2018 legislative session here is the current situation as I see it:

    I was at a House State Government Finance committee hearing on Wednesday regarding the funding of veterans homes out of the stadium reserve account.  A report (see attached report) shows that the available stadium reserve fund balance in FY2021 will be $120 million dollars, $80 million more than is needed to pay the bond service.  I had prepared to testify (my remarks are attached), but was informed that no public testimony would be taken.  The Vikings were invited to testify, they did not attend, but sent a letter (see attached).  As I have said previously if we had a vote we would have voted for a lot of other items before we voted to pay for a billionaire’s stadium, but we did not get a vote.  The excess funds should be returned to the charities.  There was no discussion of lowering our gambling taxes along with the funding of the veterans homes.  

    Our sales tax relief bill did make the House omnibus tax bill (HF4385).  The Senate did not include it in their omnibus tax bill (SF3982).  The bill is now in conference committee.  Time will tell if we make the final bill.  Sales tax relief would certainly be welcomed, but it is not the answer to our tax issue.  Sales tax relief would lower our overall taxation/fees from 27% to 26%.  The answer for us lies in our donations being tax exempt and changing the combined receipt rates to 6/12/18/24%. 

    Our donation exemption bill (HF226/SF419) did not make the House or Senate omnibus tax bills.  This is what needs to be done and needs to be done this year.  The legislature has admitted and the revenue projections show that there will be more than enough money coming in to pay for the stadium bonds.  The longer we go without relief the less likely relief is going happen for us. 

    Target paid $105 million (.001% of income) in state tax to our $72 million (27% of income) in 2017.  Their income was 256 times greater than ours ($71 billion v $277 million).  I wanted to highlight what the Vikings pay, but that is not public information.  Ask your legislators why they don’t tax Target like they tax us.  If they did Target would have paid $25 billion in state tax, erasing any revenue shortfall immediately.  Bad idea?  Of course.  Target would not be able to survive such taxation.  The real question for legislators is why would you hold for profit companies to a lesser standard and hold not for profit charities conducting philanthropy in their communities to a confiscatory standard?  One is in business to increase shareholder equity and we exist to help meet community/mission needs.

    Our income (sales minus prizes) in FY2018 will approach $300 million.  We will get more to the bottom line for missions than in FY2017, but the state, e-tab manufacturer and bars will increase their take more than we do (in both percentage and dollars).  Our missions should not be the bottom rung of the profit ladder.  Without a healthy host all of those depending on the host for their existence will ultimately suffer.  If the golden goose succumbs so will all of those who were dependent on the goose.  We have lost sight of what charitable gaming is supposed to be about, helping the less fortunate, not the more fortunate.  It has morphed into who can get the most out of the goose.     

    Republicans are in control of both the House and the Senate.  They blame the Governor for not giving us tax relief, but they have never given the Governor a bill to veto or sign with relief for us.  I totally agree that the Governor has no time for us or what we do, but he signs all kinds of bills that have provisions in them that he does not like.  If the roles were reversed I would call out the Democrats.  Ours is not a partisan issue.  The party in control of the House/Senate cannot blame the party that is not.  We do not have relief because the House and Senate majority currently don’t want us to have it.  It is as simple as that.  Your legislators need to explain to you why they are taking money out of the stadium fund while not giving us any gambling tax relief. 

    No charity should every pay more to the state than they have for their community or mission.  Donations exempt, combined receipt rates of 6/12/18/24%.  End of story. 

    Find out who represents you and how to contact them at https://www.gis.leg.mn/iMaps/districts/

    Regards,

    stadiumfiscalanalysis05082018.pdf

    vikingsletter05082018.pdf

    stategovcomments05092018.pdf


  • 04 May 2018 08:15 | Allen Lund (Administrator)

    Members,

    Attached is an article from the Star Tribune this past Wednesday and my response that was the lead letter to the editor on Thursday.  The goal of those that want to keep the status quo is to use numbers such as sales that only serve to confuse the public and legislators as they equate sales with income.  Ours is a much harsher reality.       

    As the 2018 legislative session winds down I wanted to calibrate your expectations as to what the chances are for tax relief of any kind.  I have been told that my constant carping on tax relief and unfair treatment is not well received at the legislature as it is upsetting to legislators.  I still hope that we will get the sales tax relief (House omnibus tax bill HF4385) as two powerful House members (Davids and Knoblach) are pushing for it.  Our sales tax relief bill did not make the Senate omnibus tax bill (SF3982).  See attached for what did make the Senate omnibus tax bill. 

    We need to remember that if legislators thought we needed relief they would have provided relief.  We now know that the stadium fund is not sacrosanct, that cat is out of the bag.  Using the stadium as cover for not being able to give us relief is no longer an option as the House has shown (what we already knew, but nobody would confirm) that there is more money in the stadium fund than is needed to pay for the annual bonds and that legislators are willing to use it, just not on us. 

    I predict that this year we will send the state right at $81 million in taxes/fees.  Target Corporation paid $105 million in state taxes last fiscal year on sales (money in the bank for them) of $71 billion (per www.stock-analysis-on.net).  That’s right billion.  We will pay 77% of what Target paid in state taxes on .004% of their income ($300 million is my projection of sales minus prizes, money in the bank for us this fiscal year).  We pay 27% of what we get to the bank in state tax and Target pays .001%.  I am not picking on Target, but only as an example of how differently we are treated by government.  

    CONVENTION NEWS: At the Friday evening banquet in Bemidji THE Johnny Holm Band will be the entertainment.  Remember to pack your dancing shoes!

    Regards,

    2018senateomnibusbill.pdf

    startribuneetabs05022018.pdf

    0503lettertoeditor.pdf

  • 02 May 2018 09:24 | Allen Lund (Administrator)

    Members,

    There were two welcomed pieces of news this week.

    The House tax committee included HF3384 which excludes sales tax on our e-tab revenue sharing and purchases of our paper games.  It was passed out of House Tax committee to House Ways and Means, passed out of Ways and Means to the House floor for a vote on Monday.  Thanks to Chair Davids of the House tax committee for including us in the bill.  There is still a long way to go before this becomes law, but without being included in the bill our chances would have been very slight.  The Senate has not released their tax bill as of yet.

    HF1415, the Daily Fantasy Sports bill went down on a 48 yes to 74 no vote on the House floor on Tuesday of this week.    We objected to this bill in its current form.  We asked you to contact your legislators and ask them to vote no on this.  A big thank you to those that did contact your legislators.  You made a difference!  Those seeking to compete with charitable gaming should not expect to come into Minnesota and be extended more favorable treatment than we currently get, especially for profit competitors.  Attached is who voted for and against the bill.  If your legislator voted no, please make sure to thank them. 

    There has been an increase in fund losses across the state.  Please make sure that you are doing what is necessary to protect your employees and your funds.  If you have questions regarding your current security measures you can ask local law enforcement to review your operation to see if they have any suggestions.  Remember, if you have a fund loss follow these steps (from the Gambling Manual): Notify local law enforcement IMMEDIATELY, AND notify Board within 60 days When a fund loss is discovered, report it to local law enforcement officials: • within 24 hours for a fund loss from a paper pull-tab dispensing device, or • within five days of the discovery for all other forms of gambling. The Board will not consider the fund loss request if the loss is not reported: • to local law enforcement officials within the above timeframes; or • to the Board within 60 days, even if you do not yet have a copy of the police report. If the organization fails to meet these reporting requirements, the organization will be required to: • reimburse its gambling account with funds from a non-gambling source for the amount of the loss; and • provide documentation of the reimbursement to the Board within 60 days of the loss.

    Attached is a letter from Tracy Henry, President of the Irondale Youth Hockey Association to her Representative in regards to the House proposing to use the stadium fund for funding veterans homes.  Tracy has graciously agreed to let me share it with you.  This is a great example of letting your legislators know where you stand on an issue.  We are not saying that the funding of veterans homes is a lower priority than tax relief for charitable gaming.  What we are saying is that excess money in the stadium fund needs to be used to reduce our confiscatory tax burden. 

    hf1415rollcallvote (1).pdf

    letter on stadium issue (2).pdf


  • 10 Apr 2018 11:08 | Allen Lund (Administrator)

    Members,

    Attached please find a letter that I sent to Senator Kiffmeyer in regards to SF1402.  She is the chair of the Senate State Government Finance and Policy Committee.

    Owners of the two largest Daily Fantasy Sports (DFS) organizations (DraftKings and FanDuel) include major league sports owners and professional sports leagues themselves.

    Little used rules and procedural moves at the legislature have been used to position these bills for committee hearings and floor votes. 

    These bills in their current form would legalize DFS with almost no regulation and little oversight.  They also make no provisions for the taxing of for profit DFS vendors, other than the presumed corporate tax.

    My instincts are telling me that there is more to this than meets the eye.  Sports book legislation in draft form is out there and the two major for profit DFS players are looking to be the drivers of sports book if the Supreme Court strikes down the sports book ban.  There is too much being done for these two bills to believe otherwise.   

    Removal of the federal ban would be great for our sports themed tip boards, but I believe bad for us overall.  I am told that the NBA (a DFS co-owner) says that any sports book legislation must include their cut of the proceeds from the states plus it needs to be in app form.  24/7/365 legal gambling all within easy reach.  No need to actually go anywhere to gamble.  What can possibly go wrong?

    Charitable gaming is not anti competition.  We are anti unfair competition.  If billionaire owner companies that have no skin in benefiting Minnesota or its citizens are able to come in without any real regulation or taxation it will be a very sad day indeed.

    We have no money, but we still have our voices and votes. 

    You need to contact your legislators and tell them that no more keys to the state are to be handed over until charitable gaming is taken care of.  Our confiscatory tax structure needs to be fixed prior to further enriching those that do not really need our help.  Legislators need to stop HF1415 and SF1402 before it is too late.  Also, any bills dealing with DFS or sports book need to have regulation/oversight/taxation similar to charitable gaming.   

    Senator Kiffmeyer04092018.pdf

  • 30 Mar 2018 09:16 | Allen Lund (Administrator)

    Members,

    This week HF3018 (tax structure task force bill) was heard in House Government Operations (Thank you Chair O’Driscoll for hearing the bill) and passed out to House State Government Finance (Thank you Chair S. Anderson for hearing the bill).  It was laid over for possible inclusion in an Omnibus Finance bill.  Thanks again to chief author Bliss for all of his work on the bill.  No further action on this bill is required in the House.

    This week HF3384 was heard in House Taxes (Thank you Chair Davids for hearing the bill).  Jon Grell and I testified in support of the bill.  The bill was laid over for possible inclusion in an Omnibus Tax bill.  Thanks again to chief author Knoblach for all of his work on the bill.  No further action on this bill is required in the House. 

    Last week I failed to mention that Jim Probst of the South Robert St. Business Association testified in support of HF3511 (Electronic wheel bill).  The bill was offered as an amendment to HF3018, but was pulled by the author (Rep. Smith) after the testimony.    Many thanks to Jim for his testimony.  An electronic version of the manual wheel/table is needed.  It is an evolution of a game, not a revolution or a direct expansion of gambling in the state.  It would provide us with another tool that would be taxed at 8.5%, not combined receipts. 

    On the ACM website you will find an excel spreadsheet that includes all of our 80,818 Lawful Purpose Expenditures in calendar year 2017 by license number.  Great reading.  I try to get through every one of them each year.  I am always in awe of the work that you each do.  Take the time to look at yours and pass them along to your state legislators.  It helps them to see what you are doing with the money that you do get to the bottom line.

    The legislature is in recess for the next ten days, returning on Monday, April 9. 

    Blessed Easter,

    Al


  • 12 Mar 2018 17:17 | Allen Lund (Administrator)

    See the two attachments that are great examples of working with your community, organization members and your elected officials in letting them know what your organization has been doing in your community.  Thanks to Gary Dawson from the Backus American Legion for his work and sharing of this information.

    2017CharGamNewsRelease.pdf

    2017 BL Charitable Donaations.pdf

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