For Hassan and Expanded Gaming, the Time is Now!

With expanded gaming being a topic of great interest to Salem, I thought Patch readers might find my analysis on Governor Hassan and expanded gaming interesting:

Among the most highly anticipated items in Governor Maggie Hassan’s upcoming budget address is whether she will include expanded gaming as a major piece of the next state budget. For the first time New Hampshire has a governor that is genuinely supportive of expanded gaming but just how deep her support runs is undetermined.

Should Hassan choose to include gaming her rationale for doing so will be understandable. Despite demonizing the 2012-2013 Republican budget and revenue estimates as unnecessarily harsh, the state’s economy continues to recover slowly and revenues continue to underperform. With no money for additional spending, Hassan is facing the possibility that she will not be able to deliver on campaign promises to replenish spending in the areas of higher education and social programs. In fact, if the current trend continues the existing budget will need a slight shave.

Unless you have intimately experienced the tough choices and emotion involved with crafting a state budget it is hard to fully appreciate its difficulty. This is especially true during slow economic times when spending cuts become necessary. For both lawmakers and the public, spending cuts are always more popular in theory than in practice. Many cuts are taken personally and every agency that is asked to sacrifice feels that they have been unfairly targeted. While the 2012-2013 budgets arrested a $900 million budget without new or increased taxes, it was painful and subjected legislative leaders and budget writers to harsh criticism. Hassan, with a state-wide constituency to contend with, is unlikely to subject herself to a similar hot seat. Thus, it is likely that she is looking for additional revenues while avoiding unpopular tax increases. Enter expanded gaming.

As always, the House of Representatives will remain the biggest roadblock to expanded gaming. If Governor Hassan does include gaming in her budget she must be prepared to flex her political muscle in the House Democrat caucus. Any successful proposal must have several key ingredients: a competitive bidding process for a limited number of licenses, highly regulated operations, some revenue allotment to host cities and problem gambling programs.

One glaring challenge she must tackle is the diverging opinion over how gaming revenue is allocated. Many Democrats want the revenue earmarked to education, while Senate Finance Chairman Chuck Morse wants it dedicated to infrastructure, while others hope to fund social programs. Reaching consensus and pacifying disappointed expectations is critical. Making matters trickier, Hassan must also address some Democrats who fear that gaming revenue will kill their hopes that New Hampshire will accept an income or sales tax for additional revenue.

The best plan was crafted by House Republican leadership last session. In a nutshell, gaming revenue from two facilities would be used to lower the Business Profits Tax and Business Enterprise Tax. Currently, New Hampshire has some of the highest business tax rates in the country which stifles our economic growth. This ensured that gaming would expand our economic base and stimulate existing revenue sources by lowering taxes and not used to simply enlarge state government. Such a plan is likely the only one that could gain wide conservative support.

Should Hassan choose to include gaming in her budget, the facts will be squarely in her favor. While expanded gaming is not a silver bullet, New Hampshire could reap $200 million in new revenue as well as thousands of new jobs depending on the proposal. However, this assumes that New Hampshire acts before Massachusetts can implement its expanded gaming plan. It’s been a little over a year since Massachusetts authorized the creation of up to three resort casinos and one slot parlor. While they are still a few years away from the first bet being placed, the clock is ticking.

Keeping Granite Staters, and their money, in New Hampshire rather than going to Massachusetts is critical for two big revenue reasons: First, our lottery revenue will hemorrhage since most individuals purchase their lottery tickets where they are already gambling. Second, other discretionary income spent while in Massachusetts at restaurants and retail will hurt our Rooms and Meals and related revenue. This says nothing of the hundreds of millions of dollars in potential economic development and thousands of private-sector jobs that will be squandered if there is no action this legislative session.

Whether expanded gaming is successful will depend on Governor Hassan’s willingness to spend political capital with House Democrats. She can begin that process by doubling down and making it part of her budget.

D.J. Bettencourt served as a State Representative in the New Hampshire House of Representatives from 2005 to 2012 and was the House Majority Leader for the 2011-2012 legislative term. He currently works as a special education advisor and is the Volunteer Coordinator at the Salem Animal Rescue League.