Vermont’s Governor wants to insulate 80,000 homes in the Green Mountain State and he wants the taxpayers to pay for it. Governor Peter Shumlin outlined his proposal in his State-Of-The-State address to the people of Vermont last month. He also explained how he hopes the state legislature will approve his plan of slapping a 10% tax on so-called break-open tickets to raise between six and 17 million dollars to pay for it.
At American Legion Post #19 in Bristol, Vermont Gov. Shumlin defended his plan, but it met with stern opposition by the local American Legion Post Commander. A reporter for the Addison Independent newspaper filed this report:
“..Shumlin said he supports the weatherization program, which he proposes to support with another controversial tax — a 10-percent surcharge on break-open tickets, which he believes will generate $6 million annually.
VT Governor Peter Shumlin (D)
“The proposed tax on break-open tickets has drawn sharp criticism from various civic clubs and veterans’ organizations that use proceeds from the sale of the tickets to assist various community causes.”
Break-open ticket come in various sizes, with varying degrees of money available to lucky winners. This is just one example of hundreds of different games.
In some states, substantial prizes are available. Of course, the odds of winning the top prize are quite low.
“Ron LaRose, commander of Bristol American Legion Post 19, displayed a box of 3,079 break-open tickets that he said cost the Legion $53, on which the organization paid a state sales tax of $3.18. He said the built-in profit on the box of tickets is $474 at sales of $1 per ticket. The Legion, he said, will make a net profit of $417.82 for charity.
LaRose said he believed the proposed surcharge would result in the state leaving the Legion with a net profit of only $109.82 for that box of break-open tickets, money used to help veterans, Boy Scouts, baseball and basketball teams, Bristol’s July 4 fireworks, scholarships, American flags and various charitable endeavors. (Editor’s Note: These numbers apply ONLY if every ticket in a given box is sold.)
“When you take the profit from us … all of those organizations are going to be without us,” LaRose said.
Shumlin disputed LaRose’s calculations, saying the impact of the surcharge will be on the producer/vendor of the break-open tickets. He said he suspects the vendors themselves are reaping a substantial profit that does not go to charity. He promised to have Vermont Department of Liquor Control Commissioner Mike Hogan speak with Legion officials about the plan.
“Our proposal in our view, will strengthen your ability to give money to nonprofits you are supporting and will give you a percentage of the take to help with the administration of this club and other clubs across the state,” Shumlin said. “What we are suggesting is that by joining Massachusetts and Connecticut in charging the seller or producer of the games a 10-percent tax, we will be able to fund some important programs and get (the Legion) a better share of administrative cost that you are currently absorbing.”
The governor’s stated plan, of course, is not how the proposal is worded, nor is it accurate. The plan calls for new fees to be placed on the ticket producers/vendors, but it calls for that 10% tax to be recouped at the point of sale, which – in the opinion of most organizations – is not only unworkable, but it could be the death knell for their entire fundraising efforts. It’s no secret that service organizations thrive on break-open tickets, but most agree that the tax itself, along with significant changes in the way sales are handled, will render them useless – all things considered.
Shumlin says that charities are losing money because some sellers don’t sell every single ticket from every box of tickets offered for sale. His proposal would require that to happen.
In Vermont, some ticket sellers already follow the governor’s suggestion, but most refuse to lie to their customers. If most of the big winners have “come off the top” of a given box, the seller will take the loss on that box and throw out the remaining tickets in favor of a new box.
From experience, sellers suggest that once the biggest winners have been sold from a box, no one is foolish enough to keep buying from that box. The ideal scenario would have at least one big winning ticket still in a box with only a handful of tickets left to sell. That happens, and when it does the organization realizes maximum profit.
Shumlin says his law will “fix” that problem. Sellers will not be allowed to cross off or announce how many winners have come out of a given box, so no one will know until the very last ticket is sold. If asked “what’s left to win” from a given box, the ticket seller is not to answer.
Again, the governor is wrong.
His proposal will only encourage sellers or their agents to quietly advise ticket players (friends?) as to how many big winning tickets are left and when they should or should not play them. Regular ticket players have reported this fact numerous times over the past several years and refuse to frequent the outlets that function in this fashion. For non-profit organizations such as the American Legion and VFW, the result would be financially devastating.
Oh, and one other thing….The 10% tax would be collected at the point of sale, requiring the payment of ten additional cents for every ticket sold. Currently, most tickets are sold for one dollar. Under the governor’s tax proposal, each ticket would cost $1.10 and all transactions would have to be recorded on a cash register tape to ensure that the charities these organizations support get every penny.
The governor is suggesting that non-profit Veterans organizations are cheating the charities they support and that suggestion didn’t set well with Dell Hill, Adjutant of American Legion Post #33 in Morrisville, Vermont. “Taxing non-profit Veterans organizations? Just how low can a government get?” Hill asked.
“Our American Legion Post sponsors events almost weekly to earn money that goes directly to our Veterans and their families, as well as dozens of other local charities, which help the needy and those adversely affected by natural disasters such as Hurricane Irene and Hurricane Sandy. We handed out over $22,000 of such help in 2012. While most break-open ticket players hope to win, they know they’re helping support all of our charitable work. For the state to step in and tax us only means fewer dollars will be available for those in need”.
Stay chipper, Mr. Hill. Two states currently tax Girl Scout cookie sales and others are considering doing the same.
What’s next? A tax on “Buddy Poppy” sales? (Don’t give them any ideas!)