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Itís the economy, stupid
Yes, the state should legalize casino gambling. And no, the state didnít spend its way into the current budget deficit.


PLENTY OF ARGUMENTS can be made against legalizing casino gambling in Massachusetts: it can lead to increased crime in the vicinity of casinos; it can lead to increased gambling addiction; and state revenues raised via casino gambling may siphon money away from the state lottery (which raises approximately $860 million per year). But the potential benefits the state could reap by legalizing casino gambling easily outweigh these concerns.

A report from the 19-member gambling-study commission appointed by Governor Jane Swift last October doesnít come out for or against the legalization of casino gambling in Massachusetts. But it paints a persuasive picture nonetheless of why Massachusetts should take advantage of the revenues that casino gambling could raise. Approximately 40 percent of revenues from gambling facilities in Rhode Island and Connecticut come from spending by Massachusetts residents. By allowing a casino (or casinos) to be built in the state, the Commonwealth could keep this money (about $822 million) in the Bay State. Even if that figure is inflated, casino gambling in Massachusetts presumably could attract people who think Rhode Island or Connecticut is to far to travel to have fun.

The report also found that casino gambling could raise between $200 million and $1 billion per year. While thereís good reason to believe that casinos and other gaming facilities would take money away from the state lottery, the state would still net an overall gain in revenue from gambling.

Playing the lottery and gambling ó whether on sporting events or in a casino ó are mainstream activities. Gambling no longer takes place on the margins of our society. It seems silly for the state to say no to the opportunities the extra revenue would afford us ó especially now.

Legislators have been debating whether to allow casino gambling in Massachusetts for some time. And thatís why Swift appointed the commission last fall. Thereís no question that itís an important discussion ó but itís one thatís gone on long enough. And the answer, it seems, is clear: allow casinos to be built in Massachusetts.

So why has Governor-elect Mitt Romney signaled that heíll do his own study on the issue? Why isnít this one good enough? Members of the Swift commission included Herbert Wilkins, a former chief justice of the state Supreme Judicial Court; Kathleen Scanlon, executive director of the Massachusetts Council on Compulsive Gambling; Geoffrey Beckwith, executive director of the Massachusetts Municipal Association; and Richard McGowan, of Boston College, who is a nationally recognized expert on legalized gambling.

Itís interesting that Romney, who mocked State Treasurer Shannon OíBrien during the gubernatorial debates as belonging to the political class that likes to study issues to death rather than take action, is now saying that casino gambling needs further study.

As Romney might put it, the question of whether to allow casino gambling in the state has been studied to death. Itís time to act and bring casinos to the state. We quite simply canít afford to wait any longer. Some lag time will elapse between legalizing casino gambling and realizing revenues. And weíve waited long enough.

ON SATURDAY, the Swift administration conceded for the first time that the state budget for this fiscal year is still unbalanced ó by about $600 million. In the final months of her term in office, Swift has made some tough decisions regarding the budget. Through news coverage of this, as well as of the incoming administrationís take on the budget, a picture has emerged of a state government out of control when it comes to spending. A perception seems to exist that the state squandered its gains in the boom years of the 1990s by spending wildly on social programs.

Nothing could be further from the truth. As we deal with the loose threads of this yearís budget and tackle the expected deficit of $2 billion ó some say $3 billion ó in next yearís budget, it might be instructive to look at just what sucked up the gains of the mid-to-late 1990s: corporate tax breaks, capital-gains-tax cuts, increased medical-care costs, education reform, and the Big Dig.

Skyrocketing health-care costs are nearly impossible to control. And the state has an obligation to help those who canít help themselves. So the past few yearsí 20 percent annual spending increases on Medicaid, while expensive, havenít been profligate. Neither has the $500 million annual line item for education reform. We can debate whether former governors William Weld and Paul Cellucci mismanaged the Big Dig (our answer: yes, they did). But the money spent (and borrowed) to pay for the Central Artery/Tunnel Project hasnít been a big, liberal spending party.

The only questionable spending that took place in the 1990s was done by Weld and Cellucci on behalf of corporations and wealthy citizens. In 1994, Weld shepherded an extraordinary capital-gains-tax cut through the legislature that eliminated the tax on the sale of any assets held for longer than five years. In 1995, the Weld administration masterminded millions of dollars of tax breaks for corporations like Raytheon, Fidelity, and BankBoston. In all, these tax cuts amount to an annual billion-dollar commitment by the state. Whatís particularly galling about these cuts is that this money was intended as compensation for a tax hike, and as such was supposed to be returned to the taxpayers ó that is, all of them. Not just to those who own billion-dollar corporations or who pay capital-gains taxes.

In 1990, former governor Michael Dukakis ushered in a $1.3 billion tax hike (raising the state income tax to 5.95 percent from five percent) to deal with a horrendous state budget deficit. It was done with the understanding that once things got better, the state income tax would be reduced back to five percent. But when things did get better, Weld spent the approximately $1 billion raised annually through the 1990 income-tax hike on the corporate and capital-gains breaks. As Dukakis said to the Phoenix in 1998: "How do you justify eliminating taxes on capital gains while in effect saying, ĎIf you make your money by the sweat of your brow, weíre going to tax you and tax you good?í"

A few months ago, House Speaker Tom Finneran pushed through a $1.2 billion tax increase to deal with the budget deficit. That increase is on top of the increase pushed through in 1990 ó an increase thatís yet to be eliminated. No wonder voters sent such a strong anti-tax message in November.

The coming budget debate will be painful. But we should keep in mind that the state hasnít been throwing its money out the window. Recent history provides a guide as to just where the money has gone. The notion that the looming budget deficit can be closed without raising taxes or cutting services is ridiculous. Unlike private businesses, the state canít shutter its doors when it runs out of money. It has to stay open for business. And the stateís business, in part, amounts to providing services for those in critical need: the mentally ill, the mentally retarded, the elderly, the very young.

We need to seek out new revenues to deal with those weíve lost in the economic decline. One way is through the legalization of casino gambling. Another is by raising taxes on those who still have money to pay them.

What do you think? Send an e-mail to letters[a]phx.com

Issue Date: January 2 - 9, 2003
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