A penny in your pocket or purse is trash. A penny on the sales tax or property tax rate or at the gas pump or in a slot machine is treasure.
Big treasure. Pennies have never been in the news more than they are now. The reason, of course, is that the penny figures into the taxes that fund the new Unified Shelby County School System, the city budget, and the county budget. Reporters and elected officials have pennies on the brain, and never mind that the fastest way to lose readers and voters is to make them do arithmetic.
Truth in advertising would compel us to label stories “contains math” the way gas pumps say “contains ethanol.”
Which is as good a place as any to start. Gas prices are going up this summer because that is what gas prices do in the summer. There is no reasonable explanation, it just is, like rising temperatures and headlines that say “pain at the pump.”
If one gas station is selling regular for $3.35 a gallon and the one across the street is selling it for $3.36, the savings on a 20-gallon fill-up is 20 cents. Drive around Memphis a bit and you can probably find price variations of 20 cents or more, which works out to saving a few bucks each fill-up and a few hundred bucks a year.
The sales tax in Memphis is 9.25 percent. Some city council members want to raise it to 9.75 percent, matching the new rate in the Shelby County suburbs. The proposed increase, which was defeated in a referendum last year, would cost consumers $5 on every $1,000 worth of purchases.
Call it a sandwich or a lottery ticket worth of added expense, but don’t bet your pennies on the referendum passing if it gets that far. If it did pass, it would raise more than $40 million in Memphis. The add-on in the suburbs is enough to satisfy the legal requirement for funding municipal schools.
The Memphis City Council met Tuesday to clarify the impact of a penny — actually only a fraction of a penny — on the $3.40 cent property tax rate. Finance director Brian Collins told them the city gets $1,052,000 for each penny on the tax rate. From a property owner’s point of view, a penny on the city tax rate on a house appraised at $100,000 is $2.50. Call that a cup of coffee and a donut. The council has been meeting for months to try to set the tax rate, going through entire kegs of coffee, as has the Shelby County Commission, which still has not finished the job.
We watch our pennies at the grocery store, one of the few places where the jar of pennies and coins on your dresser is worth anything. The Coinstar machines charge a 9.8 percent “processing fee” to convert them to cash or grocery credits. A sack of 1,000 pennies buys about $9 worth of groceries. The truth is that I would pay 20 percent or even 30 percent to get rid of them. My bank won’t even take them, preferring to impose fees of $1 or more at every opportunity.
Nowhere has the penny exerted greater power than at the Mississippi casinos. When the casinos came in 20 years ago, the cheapest slots accepted nickels, and the places that installed such machines were derided for catering to poor people.
But a few years ago, coins and plastic coin buckets and the sound of silver dollars clattering into a metal tray beneath blinking lights and whining sirens disappeared. Coins were replaced by bill acceptors, and the penny slot machine became the most popular game in the casino. You don’t actually drop in a penny at a time, but you can play a penny at a time or several dollars worth at a time. Pick your poison. Speaking from experience, the thrill is not all that different, considering that I play Vegas solitaire on my computer for nothing.
According to Mississippi Gaming Commission reports, there are 21,090 penny slots in the state. There are only 62 slots that play $50 at a time and exactly one $500 slot machine.
The amount of “coin in” wagered on penny slots in the month of May this year was just over $1,202,000,000.
If you want to know how many pennies that is, and I know you do, we must resort to the language of astronomers. The answer is more than 120 billion, or 120,200,000,000 pennies. Enough to support nine casinos in Tunica County and 31 in the state of Mississippi or build a stack of pennies halfway to the moon.
