Expanded Gaming: Now or Never

After coming close last year, the Massachusetts Legislature seems poised to legalize casino gaming this session. If approved, Massachusetts would join Connecticut (two casinos), Rhode Island (two slot parlors) and Maine (one slot parlor) as New England states that permit this type of gaming. And Maine residents will vote later this year on proposals for a casino in Lewiston and a combination racetrack and casino for Biddeford or Washington County.

Currently, there are two New Hampshire gaming bills that are expected to come up next year – one in the House of Representatives and one in the Senate – both of which were retained by their respective Ways and Means committees. We did this because we didn’t want to be distracted from our mission to balance our budget in a manner that responsibly lived within our means and didn’t raise taxes. But now is once again time that the legislature and Gov. Lynch should take quick and decisive action and correct a long-standing mistake or lose this revenue opportunity to Massachusetts. Below is an editorial I wrote during last year’s debate on gaming (April 25, 2010). My arguments remain relevant, while others are prophetic:

On Wednesday, my colleagues in the New Hampshire House of Representatives continued their long standing opposition to expanded gaming when they killed Senate Bill (SB) 489 that would have authorized licensed gaming for the Rockingham Park race track in Salem, as well as the old dog track in Seabrook. Many had hoped that during these tremendously difficult economic times Governor Lynch and the House would keep an open mind, reconsider their staunch opposition, and work toward a bipartisan gaming proposal. As a member of the House Ways and Means Committee, which deals exclusively with state revenue, I have a unique perspective on New Hampshire’s historic budget deficit, one that could reach $900 million by July 2011. I am also acutely aware of the subsequent hardships this will cause the families in our state.

When the dust settled following an extended debate, the House decided to take a pass on potentially $200 million in additional state revenue as well as thousands of new jobs. It clearly did not help that Governor Lynch threatened to veto the legislation if it reached his desk. The Governor stated that he will not consider supporting any gaming proposal until his hand-picked commission that was assembled to study the issue last year, renders its report in May. Critics of gaming cited a broad range of opposition ranging from the assertion that it would “destroy our quality of life” to the absurd claim that gaming revenues could ultimately “fund terrorist organizations.”

Quite frankly, not all of the opposition was unfounded. The legislation as originally drafted allowed expanded gaming only at pre-selected sites with no opportunity for competitive bidding. Such a policy decision deeply troubled me, as it runs counter to my belief in the virtues of competition and the free-market system. I am more than confident that Rockingham Park, with superior facilities and organizational schematics would easily have secured a license in a competitive bidding process. However, legislative process does not dictate that legislation must be passed as originally drafted. I strongly believe that we should have stayed at the negotiating table to work toward an amended bipartisan plan to address any flaws or concerns. While I urged my colleagues to continue the conversation, unfortunately that did not happen and the proposal was defeated.

The essential question becomes: what happens now? We continue to struggle with a substantial state budget deficit and our unemployment rate continues to hover between seven and eight percent, a historically high number for New Hampshire. With gaming no longer a reasonable option for this year, the legislature now faces the unwelcome task of cutting state spending further or raising taxes. Last week, Democratic leadership offered a glimpse of some potential new taxes, including an electric generation tax, a capital gains tax and a pet shop tax. Governor Lynch has also proposed raising the tobacco tax for the fifth time in six years.

Other Democrats have publicly hoped that with gaming off the table and our continued hemorrhage into deficit that the time is ripe to implement an income or sales tax.

Conversely, Republican leadership has correctly refused to raise taxes that would further hurt those who least can afford it during this difficult economic period. To deal with our budget deficit we have offered a series of spending cuts and government consolidations that while critically necessary are painful. However, leadership requires difficult choices. The reality is that the only permanent solution to address our budgetary problems is to work together and make the difficult spending cuts that will force state government to live within its means. In the end, New Hampshire is likely to face a combination of further spending cutes and higher taxes. Expanded gaming would not have solved all of our problems but it certainly would have made these difficult economic times a little less painful and provided additional revenues for future budgets.  It was a mistake to take this possible solution off the table.