Wednesday, January 16, 2008

The Numbers Don't Work

The Longmeadow Democratic Town Committee held a terrific forum this evening on the topic of casino gambling, specifically in Western Massachusetts. Candy Glazer, chairperson did a wonderful job organizing and moderating the discussion. Richard Fitzgerald, Town Manager of Palmer presented information on the status of the issue in his town. Two pro-casino speakers and two anti-casino speakers were each given approximately six minutes to speak. There was a question and answer period that revealed the high level of interest from the audience with the forum running just over an hour an a half. Jim St. Amand (casino liaison and Palmer resident), Thomas Murphy (casino proponent), Leo Maley (union and political activist) and myself (Selectman in community abutting two potential casino sites).

I have posted my prepared remarks that I had to edit due to the time constraints.

Casino Analysis Regional Impact Considerations:
The Numbers Don’t Work


Thank you: LDTC, PVPC, Edward S. Harrison, Chair Western MA Casino Task Force and all of the other local officials and town employees contributing to our research and dialog on the regional impacts of the proposed legislation to expand gambling in Massachusetts and specifically our region.

Conflict of Interest Disclaimer: I have no financial interest in these proposals except as a Taxpayer and Selectman. I am member of two casino study committees but not here as the spokesperson for either group.

Positive Components
Positive components of the casino bill include: a requirement that if open space is taken that an equal open space must be purchased and placed into conservation. The proposed casinos would be No Smoking facilities (sorry, no cigars!); and arguably most positive beside the profits to the investors and their employees, would be the creation of temporary prevailing wage construction jobs.

Local Casino Study Committee
The Local Casino Study Committee in Monson includes: Chief of Police, Fire Chief, Town Administrator, Highway Surveyor, Water and Sewer Superintendent, Building Inspector, Citizen Representative, Superintendent of Schools and I as a Selectman. Our task is to tabulate municipal and community concerns. Traffic, school enrollment, pollution, housing, development costs/controls, costs to the municipality, legal costs, impact on by-laws and impact on roads/infrastructure have been identified as major concerns. The LCSC is developing a survey for residents and will compile a report for Town Meeting, the Western MA Casino Task Force and Legislators.

The Western Massachusetts Casino Task Force
Western Massachusetts Casino Task Force includes Selectmen and Town Councilors from Palmer, Warren, Belchertown, Ware, Monson, Brimfield, Sturbridge, Wilbraham, Hampden, Ludlow and Holland. The casino task force began meeting in September prior to the Governor’s release of the casino bill. The Monson Board of Selectmen organized the regional task force to study the impacts pro and con of a casino in our region and to analyze the legislation as a pro-active action to ensure local and regional input in the process. The mission of the Western Regional Casino Task Force is:

“To identify all of the potential impacts that a destination resort casino located in Western MA would have on the entire region.

To pursue every avenue to assure that all potential impacts are thoroughly investigated and the proper studies undertaken to guarantee that all of the potentially impacted communities are awarded equitable mitigation/compensation in the event that the Commonwealth licenses Class III Gaming.”

The task force has met five times to date including the initial meeting to discuss the formation of a regional coalition. Discussion has focused on the structure, content, economic and fiscal components of the casino bill. There was a unanimous decision not to debate the pros/cons of casino gambling from a moral or opinion-based perspective.

The minutes of the Western Region Casino Task Force meeting of December 19, 2007 summarized the bill as, “overall the legislation reflects a lack of local representation, lack of transparency and a lack of independent studies.”

The Bill

The Administration produced a casino bill largely in isolation that lacked independent analysis or any regional input. The process and product are flawed. No fact-finding, local discussions, town meetings or regional planning organizations were included in the process. The product is a poorly crafted piece of legislation and I suggest that it should not be supported by any taxpayer, municipal leader or legislator regardless of their position on gambling due to enormity of flaws in the document and proposal.

The following major concerns were noted (form WMCAT minutes)

a) The application process for a casino gaming license provided very little local review and input.

b) There is a need for increased regional representation on the proposed gaming commission.


c) A clearer and consistent definition of region and impact area needs to be formulated and consistently
applied throughout the legislation. Current language is inconsistent with references such as region,
contiguous, surrounding, adjoining, etc. used throughout in similar instances.

d) No clear, substantive and objective criteria exists for the evaluation of applicants proposals. Study
requirements, minimum acceptance level of the provision for local review must be provided.

e) Overall the legislation reflects a lack of local representation, lack of transparency and a lack of
independent studies.

f) The relationship to the MEPA review process was also discussed, including: how the impact evaluation will be assessed; consistency with the MEPA format; and similarity of standards and thresholds. It was also questioned what the implications would be if a local permitting authority denied a local permit (preventing or impacting casino construction) but a state gaming license had already been issued to the developer.


Overview

1. The Administration projects 400million in annual revenues from casinos taxed
at 27%.

2. The Administration projects the creation of 20,000 permanent jobs.

Interestingly the media has reported full-time casino salaries during the
summer ’07 at 35k, 40-45K, during the fall ’07 and January 11, 2008,
Secretary of Labor and Workforce Development, Suzanne Bump told Selectmen
and Mayors last weekend at the MMA conference that casino jobs would pay 50K
with benefits.
There has been no independent analysis to support these rapidly increasing
salaries in the proposed Massachusetts casino industry, and it is troubling
that the figures appear to be based on averages (including executive pay)
rather than median incomes based on job classifications. The 20,000 jobs
are sometimes referred to as “new” jobs and other times not qualified
as “new” jobs. Is this economic development or economic shift?

3. The Administration has projected 30,000 temporary construction jobs.


According the Mass Taxpayer Foundation's report, the revenue will be $300 million or less. Mitigation of the lottery shortfall is estimated between: $120 – $150 million. Michael Widmer, President of MTF vigorously challenged the Administration’s projections at the Mass Municipal Association meeting last weekend. He stated that including casino revenues in the FY ’09 budget was, “fiscally irresponsible”.


The Numbers Don’t Work

Regional Mitigation and Public Health Mitigation at 5% of the gross revenues of $1.5 billion is estimated at $75 million per year. $75 million shared between three regions,
~ 12.5 million for each category for western region.

Additional costs included in the bill but not in the Administrations calculations:

Establishment of the Gaming Control Authority (~75-85 million per year), Attorney General and State Police expanded departments, District Attorney costs, local law enforcement (unknown, not calculated).

Additional costs not included in the bill and not included in the Administrations calculations: Legal costs to the COMMONWEALTH and region, education costs (influx- not accounted anywhere), low income housing demands and social services to support low income families, Bankruptcies, Loss of revenues to local economy and small businesses, Criminal History Systems Board (CHSB/CORI), Prisons and Jails (not accounted anywhere).

The town of Monson current projected deficit is over 1.5 million for FY 09. The figure to maintain adequate services is currently 2.5 million. These figures are prior to additional burdens on public services. Every community in the region is operating a sub-optimal funding and many with structural deficits. $12.5 million does not fill the holes for current fiscal needs prior to additional burden. The additional burdens including public safety, education and housing could meet or exceed the full revenues leaving no excess funds to hold the Lottery harmless or cover the expenses incurred by the Gaming Control Authority. The Numbers Don’t Work.

Who will pay for the shortfalls?

The towns in the Warren/Palmer region do not have full-time health departments and no social services departments. The infrastructure for social services consists of two community hospitals with one in-patient psychiatric wing and two outpatient counseling centers that are understaffed for current demand.

Palmer District Court has historically been one of the lowest funded District Courts in the Commonwealth and serves all of the communities in eastern Hampden County. Palmer District Court has no SAFEPLAN advocate to work with individuals affected by Domestic Abuse. I have worked for twenty years in Hampden County in the field of health education, addiction and mental health services. I co-wrote the successful FY 07 block grant application PRO-BONO for the Town of Palmer to get funding for a domestic violence task force. Two women were tragically murdered by domestic partners in Palmer last year. I am a member of the Hampden County DA’s Domestic Violence Task Force. I know the issues and deficits confronting our communities in the field of social services and education. Casinos will bring increases in social problems, bankruptcies, and pollution.

So the question for all taxpayers, residents, municipal and legislative leaders is:
Who will pay for the shortfalls?

There are two possible scenarios if casinos become legal in Massachusetts.
1. The region will receive insufficient mitigation and the burdens on the municipalities and taxpayers will increase, with a small amount of money going to Boston to fulfill their agenda, or 2. the region will receive appropriate mitigation and all casino revenues will be expended. Scenario 2 is not the likely outcome.

Who will pay for the shortfalls?
Longmeadow taxpayers, my elderly parents on a fixed income in Winchester and every resident of the Commonwealth will pay for the shortfalls.

If the Administration and Legislature respond to the factual mitigation needs of the region, the shortfall in the Lottery (120 million), the cost to run the Gaming Control Authority (80 million) and the health/social costs there would be not ANY net revenue for the Commonwealth. No revenues for roads and bridges, property tax relief or funding of education. An enormous bureaucracy with seriously flawed lack of checks and balances and little controls for oversight will be created. The Numbers Don’t Work.

Longmeadow will continue to send its tax dollars to Boston and receive nothing in return.

The Gaming Control Authority
The regional casino task force has articulated concerns about the structure of the Gaming Control Authority which demand special attention.

The Gaming Authority proposed by the Administration is designed to give enormous executive control without checks and balances with the Legislature and is devoid of regional representation. The Board of Directors would have 5 of 7 appointees by the Governor. The Advisory Committee would have the majority of members appointed by the Governor with redundant positions from labor, public safety and social services with an omission of local/regional appointees. If something like this bill were proposed by our former Governor there would be squealing in the streets about the executive power-grab.
Administrations change (rapidly one might say, in Massachusetts!) and the personalities and politics of future Administrations will change. Do you feel comfortable knowing a bureaucracy has been proposed to manage a cash business that lacks sufficient legislative checks-balances or oversight? I do not.


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I think it is time for a real discussion in Massachusetts about taxation and economic growth and we as Democrats should drive the debate. It is time to use imagination and ingenuity to re-vitalize our towns and cities. We need to address the true problems in our region which are not a simple lack of jobs; they are rural and urban poverty coupled with stagnant wages, skills gap and gender based wage inequality. We have fantastic colleges, natural resources, and historic gems in our region. We need leadership from all levels of government to make changes in how we do business through tax reform and local aid to the towns were we live. The Administration has proposed some positive plans and we should engage and support those that are well conceived and sustainable.

We also need to call the media to task to perform its duty to conduct independent research and accurately inform citizens and taxpayers of the fiscal realities of the casino proposal. It is a bad bill and should die and early death in the House. Regardless of whether you are a gambler or not, you will pay for casinos in Massachusetts.

1 comment:

cdplakeville said...

Excellent analysis. Compliments to the chef. If you think Devalue's plan is bad, you should see Middleboro's. $20,000 for gambling addiction. What a joke?