Legislative budget writers are correct to create a Plan B biennium budget that doesn’t include $80 million in casino money that Gov. Maggie Hassan proposed in her revenue and spending plan.
It’s better for the state if lawmakers separate the the casino from the budget.
As proposed by the governor last month, the revenue for the two-year budget that starts July 1 is inexorably tied to the licensing of a casino.
It was a bold initiative in an attempt to bolster revenues to make the state’s university and community college system, as well as hospital care for the poor, whole again after a Republican Legislature took a meat cleaver to the pair two years ago.
While bold, while indeed politically aggressive, the addition of $80 million in casino licensing fees is simply too much of a risk because it assumes too much will happen in too little time.
The budget writers in the House and Senate recognize the risk. Both have said they’ll craft budgets assuming there is no $80 million from a casino.
Democratic state Sen. Lou D’Allesandro, chief architect of legislation (SB 152) to create the structure for casino gambling in the state, recognizes the need to separate the two. He said so during a forum on the pros and cons of a casino last Friday. (See video here.)
A big problem with the addition of the $80 million is the timeline.
There is no way imaginable, unless the state wants to dangerously cut corners, to license a casino within the next four months.
If the governor assumes $80 million will be available for the the fiscal year 2014 that starts on July 1, then a casino would have to pass both the House and Senate, the regulatory structure would have to be created within the Lottery Commission, it would have to advertise and process the bids, the attorney general’s office would have to thorough background checks, the community chosen for the casino would have to give its approval, and there would have to be time to allow for litigation that will likely come from the loser in the bidding process.
Yes, a lot of those steps can happen concurrently. But, realistically, it’s not going to happen by July 1. It may happen, but not in time for this budget cycle.
And there’s the question of just how much an economic benefit a casino would be.
It doubts that a casino would be much of an economic boom - a zero net benefit - given that neighbor Massachusetts is in the process of licensing three casinos, and given the cost of dealing with the social ills that accompany gambling.
Hassan makes the point - rightly so - that New Hampshire already endures some of the social ills of gambling: Her proposal sets some money aside for treatment. She also notes that Granite Staters will be subject to the social ills anyway because of the casinos setting up shop across the border in the Bay State.
She also challenged the center to explain what happens if the state does nothing about expanded gambling.
The center released data assuming that two of the Massachusetts casinos will be located at Suffolk Downs (outside Boston) and Palmer (near Springfield) -- both of which are contenders for the new gambling facilities. The model shows that New Hampshire stands to “lose” roughly $75 million a year under that scenario, if New Hampshire policymakers chose to take no action on gambling.
The continuing revenue from a New Hampshire casino, according to SB 152, comes from a 14 percent tax on table games and a 30 percent tax on machine gaming.
The Senate Ways and Means Committee is likely to recommend approval of SB 152 when it comes up for a vote on Tuesday (March 5).
It will be a tremendous challenge for budget writers to replace the $80 million that might have come from a casino. But they are better off dealing with it now, then assuming the money will be there on July 1 and seeing that it isn’t.
Political promises kept may have to become promises deferred when it comes to colleges, universities and hospitals.
Paul Briand is an editor with the Live Free or Die Alliance, a non-profit, non-partisan organization that encourages the discussion and analysis of New Hampshire policies and politics.