Lt. Governor Tells Mayors: Gambling is the key to success
February 7, 2008
Yesterday, most of the Mayors throughout the State met with the Lt. Governor and several State finance officials concerning the Governor’s casino gambling proposal.
The numbers the Governor outlined to us were compelling: without licensing fees from casinos, State aid to cities and towns will tumble, with licensing fees, State aid will remain level funded, and aid to schools will increase.
The Governor’s proposal cuts local aid to Haverhill by $1.6 million, and then adds it back in a special line item, gambling revenue. This $1.6 million deficit would be in addition to the multi-million deficit we now face.
One the Mayors made an interesting point— here we are in a battle with the legislature, over level funding. This means that if all goes well, if we get our way, that State aid will not keep pace with inflation or with the rising costs of our heating oil, electricity, health care, pensions etc.
(Of course, Haverhill is in a unique position. We received $1 million in additional aid in the Governor’s budget for relief from the Hale debt. Believe me, I had no complaints about the Governor’s budget. )
There was talk at the meeting that the legislature will meet the Governor’s revenue numbers, but will do it without licensing fees from gambling, and will take the money from the State rainy day fund instead.
The problem with that is, as one State official said, the rainy day fund is for a recession, it is for a time when State revenues are falling. Our State revenues are rising, not falling.
The basic gist of the problem is that State aid to cities and towns is tied to the lottery. If lottery receipts are down, then State aid can drop also. This year, the lottery shows a $192M drop from last year as, horror of horrors, people are gambling less in anticipation of an economic downturn.
My position? As I said to the press, I have always been personally opposed to casinos, but I have to represent my city, not just my own personal point of view.
We need the revenues—we certainly can not afford another $1.6 million gap. The Governor’s office made a compelling point– there will be gambling, either the State will license it, the Federal government will license the Indian casinos, or our residents will drive to Connecticut to gamble. The question is, who gets the taxes and licensing fees.
If the legislature does not want to license gambling, then we hope they can come up with an alternative. Cities and towns need the money.
Legalize Casinos?
January 26, 2008
The Gamble on Local Aid
Under Proposition 2 and half, cities depend upon local aid to survive. State aid is based upon lottery receipts. This year, lottery receipts are down, meaning local aid may be in for a fall. If local aid is cut, cities and towns are forced to raise taxes or lay off employees.
The Governor has proposed level funding local aid. Level funding is certainly better than a cut. However, even if State aid is level funded, this creates enormous problems for cities and towns. Our fixed costs for fuel, electricity, heat, pensions and health care are all going up, so level funding means that we have to cut something else to pay for these fixed costs.
To make up the difference between the shortage in lottery receipts and the amount required to level fund local aid, the Governor has proposed making up the difference using $124 million in licensing fees from legalized casinos. [Boston Globe: Patrick says $124m from fees could fill local aid shortfall ]
The problem, of course, is that the legislature has not legalized casino gambling. There are no licensing fees or other fees from casinos. The Governor’s proposal is designed to put pressure on the legislature and is certain to touch off a long and protracted debate.
