A proposal by the governor to raise the tax rate on state-licensed casinos has won little support in the legislature, but casino operators aren’t ready to back off their push against it. The developer of the casino under construction in northwest Iowa , and also the Riverside Casino and Resort, says the proposal shows a need to educate lawmakers about the overall benefits of the facilities.

Dan Kehl says the facilities are more than casinos and in the case of Riverside, as many as 500 employees at the restaurants and golf course could be laid off. “It goes from becoming a destination resort with a substantial tourist component for the state of Iowa to basically a bare bones slot house — which I don’t think anyone wants or was the intent of the gaming laws in the first place,” Kehl says.

Kehl says the increase could force them to shutter the northwest Iowa casino before it opens. The general manager of the Prairie Meadows Racetrack and Casino in Altoona, Gary Palmer, says the tax increase would halt their new 30-million dollar hotel construction.

“That’s just astronomical. I mean, we can’t survive on that,” Palmer says, “I think we would probably end up laying off a couple hundred people. We’d probably have to put our hotel, we’d probably have to stop our construction right now on it,if we had a tax rate like this. It’s pretty devastating to our industry.”

Branstad’s plan would raise the state tax on casinos by about 200-million dollars, which he says would be offset by a decrease in corporate income taxes. Palmer and Kehl say they will continue working to let legislators know all the costs of the idea. The two spoke Monday on the Iowa Public Radio program “The Exchange.”