Toledo resident Pamela Deschene was appointed to a Toledo City Council vacancy during the council’s regular meeting on Monday, March 16, by a vote of 2-1, with Councilor Jillian Niles abstaining from the vote.
Deschene was one of two candidates who were interviewed at the previous meeting for the vacancy, with the other being Zackaree Verhei, whose nomination failed by a vote of 2-1. Niles abstained from both votes as she knows Verhei personally.
Mayor Cherie Devore was not present at the meeting due to a family emergency, leaving Mayor Pro Tem Rebecca Duerst to run the meeting and act as the tie-breaking vote with Niles abstaining. Deschene will be sworn in at the next Toledo City Council meeting, scheduled to start at 6 p.m. Monday, April 6, at Toledo City Hall.
During Monday’s meeting, councilors also discussed the possibility of adopting a gambling tax for sales of pull-tabs. No formal ordinance establishing a gambling tax was on the agenda for approval.
“This is something that other cities do. We’re not voting on it tonight, just looking for a direction to go in,” Toledo City Clerk-Treasurer Rachel Campbell said.
Pull-tabs are a form of lottery ticket made up of two layers of cardboard, with the top layer having perforated tabs the player removes to see if they won.
Per state law, any municipality may establish gambling taxes within its jurisdiction. Campbell explained other cities comparable to Toledo usually have an established gambling tax rate between 3% and 5%.
While not present in person, Donna’s Place owner Denise Shero wrote a letter to the city concerning the possibility of a pull-tab gambling tax. If such a tax is established in Toledo, Shero said it would likely mean the end of pull-tab sales at Donna’s Place.
“To my knowledge, Donna’s Place is currently the only business within the city limits conducting gambling activities that would be subject to this tax,” Shero said. “If that is correct, the burden of a new city revenue source would fall on a single business. In general, tax policy works best when it applies broadly across a community rather than falling on only a few.”
According to Shero, pull-tab gross sales at Donna’s Place average about $9,700 a month, with around $6,700 being paid back out to customers in prize money.
Aside from being able to tax up to 5% of gross sales, or up to 10% of net sales receipts after prizes are redeemed, Shero estimated tax revenue generated from her business to be $485 per month under the gross sales tax, or $300 per month with the net sales tax.
“The remaining receipts must still cover the cost of purchasing the pull-tab games themselves, along with other supplies and operational expenses. Pull-tabs are not the core of our business, but they are an activity our customers enjoy. If the tax makes the activity no longer practical to operate, I will likely discontinue offering them to our patrons,” Shero said. “... I appreciate the work the council does on behalf of our community and respectfully ask that you consider whether pursuing this tax currently achieves the intended outcome.”
During discussion at Monday’s meeting, Toledo City Councilor Jamie Scalise was the first to comment on the potential new gambling tax.
“I’ve read her letter and my contention is, they’ve been getting away with no tax for years,” Scalise said. “So that’s actually a bonus, and we may have businesses in the future that decide to do pull-tabs or whatever, so I think we need to get it in place.”
Duerst concurred with Scalise’s sentiment and wanted to get something in place, but also wanted to get more information on what other cities were doing from Campbell.
“There’s a lot to read up on this. There’s a variety of ways and percentages to collect the tax. We may start out small, and move on depending on what we find,” Duerst said.
Scalise added she used to work at a bar which sold pull-tabs, and “people will spend a lot of money on pull-tabs. Even if they’re just sitting there nursing a drink all night, they’ll play those pull-tabs.”
The Toledo City Council voted unanimously to get more information on a potential gambling tax.
