July 05, 2006
Let's get ready to gamble

I didn't get around to this before the holiday, so let's catch up: The next big issue in the governor's race may well be gambling, as the realities of HB3 are forcing everyone to look around for the revenue to make up the shortfalls caused by the property tax cuts.

"It has already been stated that the economy has to grow at least about $2 billion a year just to meet the property tax reduction requirements," said Bill Stinson, president of Let The Voters Decide, a group of real estate developers that favors bringing in casinos. "And that doesn't start to address the needs for school finance and health care and transportation and prisons and all the other areas that the state provides for the citizens.

"The only thing that's left is increasing the sales tax, which is one of the highest in the nation, or an income tax, or to allow the voters to decide whether or not they would like to allow full casinos to come in that generate jobs and bring in revenue to Texas," Stinson said.

You know, if we spent one-tenth of the time and effort discussing an income tax as we have gambling over the past few years, we might not need to be talking about gambling. If everybody could get past the ick factor long enough for us to have a productive debate on the subject, we might just come to realize that it's not such a bad idea after all.

Big casino companies working through the Texas Gaming Association envision fancy destination resorts in cities, including San Antonio. They say their proposal ultimately would bring the state $3 billion a year.

Tommy Azopardi, president of the racing-industry-based Texans for Economic Development, said VLTs at tracks could provide at least $1.2 billion annually.

Before anyone starts counting chickens, please be aware that the horse racing lobby has been pushing itself as Texas' economic savior for years now. As of last year, the state's race tracks have been a big fat zero for the state's coffers. When you hear a horse racing lobbyist say that VLTs "could provide" some amount of money for Texas, what you should think is that they could also provide free ice cream and ponies for all of us, too. You won't be any less grounded in reality than they are.

Perry in 2004 supported VLTs as a way to help pay for public education but backed away after it failed to win over the GOP-majority Legislature and as the economy brightened. He had suggested his proposal would help control gambling by leading to the elimination of illegal eight-liners.

The governor flatly opposes casino-style gambling and has no intention of offering VLTs again, spokesmen for the governor said.

"The notion of a massive expansion of gambling in Texas to answer the challenges of Texas is not realistic, because the Texas Legislature isn't going to pass it," spokesman Robert Black said.

Three gunning for Perry's job think an expansion is realistic enough to talk about.

Democratic candidate Chris Bell is open to casinos with local approval and to slot machines at racetracks to raise money for education. He strongly opposes VLTs in convenience stores or other venues outside of what he calls the "controlled environment" of a track or casino.

"I don't want to offer casino gambling as any kind of cure-all, but ... it could be a steady source of new revenue for the state, and I think we should at least keep it on the table," Bell said Friday.

Comptroller Carole Keeton Strayhorn, an independent running for governor, supports slot machines at existing tracks, with the revenue dedicated to property tax cuts and public and higher education.

She said voters should be allowed to consider casino gambling - and other issues - through referendums.

"We are conservatively sucking 1 to 2 billion dollars a year out of our Texas classrooms that's going to Louisiana, New Mexico, Arkansas, now Oklahoma," she also said Friday after speaking to a convention for Texas teachers. "I want to repatriate those dollars, those ponies and those jobs back to the schoolchildren and our Texas teachers."

Independent hopeful Kinky Friedman is for slot machines at tracks and casinos, with the revenue going to education. He calls it "Slots for Tots."

"Half the people in Vegas are from Texas. We fuel the economy of five other states, folks. I want to get that money reversed. I want it coming back to us," Friedman told the Texas Classroom Teachers Association on Friday.

I might be persuaded to go along with some expansion of gambling in Texas. I don't like it, and I don't believe it's going to be a windfall in any sense, but I'm libertarian enough to believe that most activities should be allowed unless there's a real good reason to forbid them. Gambling doesn't quite make the cut for me on that score, dumb as I think it is. Having said that, I believe that if the state insists on allowing more gambling, it should take heed of what it's learned from years of the Lottery and horse and dog tracks, which is that gambling revenue should be considered found money, and not a dependable source of income. Anyone who proposes using projected revenue from gambling to reduce or replace an existing income stream is deluded or dishonest. Watch what's being said carefully here, because this is going to be a major component of the 2007 legislative session.

Link via Aaron Pena, who very much sees the writing on the wall.

UPDATE: Two views on whether or not Governor Perry really opposes expanded gambling or not:

"I have talked to the governor about it. I truly do believe he was sold a bill of goods. I believe he strongly opposes what he had for a while not fully understood," said Cathie Adams, president of the conservative Texas Eagle Forum.

But Sen. Jeff Wentworth - who favors video lottery terminals at race tracks as a way to raise money for state efforts that people want but for which they don't want to be taxed - has a different view.

"I guarantee you if we passed it, he'd sign it," said Wentworth, R-San Antonio. "He was for them before. I think the only reason he's now saying it's a non-starter is that we just didn't get it out of the Legislature last time."

I tend to agree with Sen. Wentworth here. Just a gut feeling on my part, so take it with an appropriate amount of salt.

Posted by Charles Kuffner on July 05, 2006 to Budget ballyhoo | TrackBack