May 11, 2004
The slot machines will rise again

I suppose no idea is ever truly dead as long as Lege is still in session. What else can you say about the revived and expanded slot machine proposals now working their way through the Senate?

Sen. Ken Armbrister, D-Victoria, said he is willing to revise his proposed constitutional amendment to allow video lottery terminals at other venues to gain more support. Sen. Jon Lindsay, R-Houston, said he might support the plan if the change is made.

The gambling proposal is part of the Senate's effort to overhaul the school finance system by finding ways to offset any cut in local school property taxes. A similar proposal was killed by the House last week when it passed its school finance bill.


Armbrister said he would support video slot machines at the Astrodome and Reunion Arena in Dallas because taxpayers are paying to keep both facilities open for very few events. He said the Astrodome is mainly used for high school football games and monster truck demonstrations.

Armbrister said Lindsay told him he would vote for the gambling measure only if it includes the Astrodome. He said other senators have made the same demand for their local economies, including a new horse track in Amarillo and sections of Galveston and South Padre islands.

Lindsay said he is prepared to vote against the plan being supported by Perry for slot machines at six tracks and three Indian reservations. But he said he "might come around" if the proposal would be aimed at convention centers such as Houston and Galveston Island.

"Then you give the local convention business a shot in the arm, allow them to lower their room tax, making them more competitive in developing convention business and creating jobs," said Lindsay.

He said Harris County officials he has talked to love the idea but "know the chances are slim to none."

Harris County Judge Robert Eckels said he had not read the bill, so could not comment on the details.

"There has not been a lot of support for video gambling at any location," said Eckels. "I think it is unlikely that it will survive the process."

Last year, Rep. Ron Wilson,D-Houston, proposed transforming the Astrodome into the world's largest luxury casino. But his bill died.

Yes, Rep. Ron Wilson made this wacky proposal back in 2002, and it got the reception it deserved. You might want to check and see what Judge Eckels said about this idea back then, Sen. Lindsay, before you claim support from Harris County officials.

By the way, I notice that estimates of how much those slot machines will rake in are back in the stories about them, though they vary - $1.4 billion here, $1.2 billion here, $1.5 billion here. But what's a few hundred million bucks among friends? It's not as if these numbers mean anything, anyway.

There is one bit of good news, from the DMN story:

Sen. Robert Duncan, R-Lubbock, filed the amendment to overhaul the business franchise tax, explaining there is widespread support in the Legislature and in the business community for making the tax more equitable.

His proposal would address the large number of businesses that are avoiding the franchise tax because of loopholes and exemptions. Experts estimate that only one in six businesses is paying the tax.

"Business leaders I've talked to favor reform of the way we tax business," Mr. Duncan said. The idea is to extend the business tax to partnerships, proprietorships and other entities that now avoid the tax.

"We're looking for a system that is designed to prevent tax avoidance," he said. "This is a better way to treat business as opposed to the current gaming system we have."

That is, by far, the most sensible thing anyone has said since this madness began. Kudos to you, Sen. Duncan. Now don't let any of your lily-livered colleagues in the House mess with this bill.

The other big news from the Senate is a new teacher incentive package.

Sen. Florence Shapiro, R-Plano, chairwoman of the Senate Education Committee, has become the public face of what is reportedly a feverish private process involving her, Lt. Gov. David Dewhurst and other leaders of both chambers. On Monday, Shapiro laid out her 26-page "educational excellence and school reform" proposal as a partial substitute for House Bill 1, the legislation narrowly passed by the other chamber.

It contains a $300 million-a-year teacher incentive package -- equal to about $1,000 per teacher -- that differs from the incentive approach in the House bill.

The House plan laid out a statewide blueprint for how teachers would earn monetary rewards. Shapiro instead would let each district create its own "student performance plan," subject to approval by the state education commissioner, that would set goals for teacher bonuses.

Her bill also includes a much smaller incentive plan for charter schools -- something absent from the House proposal -- that could be used only to build or buy facilities. And it would have the state pay students' fees to take the SAT or ACT, as well as two years' worth of preparation exams.

Today, Shapiro will unveil the "distribution" elements of her legislation: the guts of school finance, from educators' point of view. That language will set the formulas and broad rules for how districts get state money and determine whether the state will retain any of the current system, dubbed Robin Hood by critics, in which districts with greater property wealth share with poorer ones.

Shapiro said most of the 31 members have agreed informally on the first two elements. When taxes come into play, it gets sticky.

Right now, schools' operations and maintenance costs are covered mostly by local property taxes, whose rate is capped at $1.50 per $100 of assessed property value. More than half the state's school systems are at or near that cap. The Senate legislation will almost certainly include a significant cut in that rate, probably even lower than the $1.20 per $100 passed by the House.

The prime candidate for making up the lost revenue, Shapiro said, is a broadening of the franchise tax on corporations. Shapiro and Armbrister said that would mean extending the tax to more than just corporations; many businesses evade it legally now by changing their structure.

I'll wait and see on this, but do note again the importance of fixing the franchise tax, something which could and should have been done in the regular session last year. Sen. Duncan's proposal to extend it would also allow for its rate to be reduced, which really ought to stifle the usual bitching (though of course it won't) and more importantly is in line with the general philosophy of having as shallow a tax on as broad a base as possible. If this can get done, then the Lege can claim a real accomplishment. Let's see if they get any support from the Governor this time around.

Posted by Charles Kuffner on May 11, 2004 to Budget ballyhoo | TrackBack

While I've never been in Houston, I do know that the one word used to describe the Astrodome was "cavernous". With that in mind, how does anyone envision filling the place up as a casino / video lottery terminal parlor/ whatever you want to call the place? You could fit a theme park in there, and have room left over for several thousand slot machines.

Wacky does not begin to describe this idea.

Posted by: William Hughes on May 11, 2004 9:27 AM