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Advocacy Executive Director's Reports Revenue sharing is not a gamble
Fixing the fiscal woes confronting our communities must be a number one priority for the Commonwealth, regardless of whether we become a casino destination.
It is painfully clear that cities and towns are in fiscal distress, as evidenced by the service cutbacks and increased reliance on property taxes that we see all around us. This is a major challenge that must be solved for the good of our economy and quality of life, and cannot be predicated on whether the state decides to legalize casino gambling.
Adjusting for inflation, communities receive $600 million less in local aid today than in 2002, and this number undercounts the extent of the problem, as municipal costs grow faster than inflation. Localities and their state government partners need to find a way to restore this lost aid, and commit to a revenue sharing plan that ensures that cities and towns can maintain and restore the local services that make our economy competitive, while reducing reliance on property taxes.
The MMA, with the support of experts such as the Massachusetts Taxpayers Foundation and the Center for Urban and Regional Policy at Northeastern University, is pressing hard for a revenue-sharing compact that would eventually devote 40 percent of the Commonwealth’s tax revenues to fund municipal and school aid. Phased in over several years, this plan would re-establish a viable and effective municipal aid revenue stream to buttress the stagnant and insufficient state Lottery, and provide a framework broad enough to fund a renewed Chapter 70 program to address the adequacy and formula issues that persist.
The plan, endorsed by local officials from every corner of the state at our Annual Meeting in January, reflects the essential investment that is required for the Massachusetts economy to grow and compete in the years ahead and reverse the Bay State’s dismal economic performance since 2001.
Last month, the governor announced his intention to locate three casinos in Massachusetts, and now billion-dollar private casino operators are landing on Beacon Hill jostling for attention and advantage, joining the Mashpee Wampanoags and three existing racetracks as advocates for “temporary casinos,” “resort casinos,” and perhaps “racinos” for legislators to ponder. All of this action may, in the words of several State House observers, “suck the oxygen” out of all other issues for the rest of the fall legislative session and into next year.
The governor is still drafting his legislation to bring casino gambling to Massachusetts, yet the debate has begun in earnest. Advocates want the talk to focus on how to allocate the money that could be generated, but it is premature to start spending any of that money now. Talking about dividing up casino profits even before the administration’s plan has been fully reviewed will deflect attention from important questions, including how to protect the traditional state Lottery and the growth of that revenue source from the negative drains caused by slot machines and other expanded gaming activity, and how to mitigate any negative impacts on regions, including traffic, congestion and increased policing needs.
Based on the governor’s estimates, expanded gambling may bring in $450 million a year by 2012, with additional one-time licensing fees collected earlier. The administration says its preference is to divide the money in half, using $200 million a year to fund transportation maintenance and $200 million a year to fund an expanded state income tax credit to offset property taxes paid by almost a million homeowners (about $4 a week for those who qualify). The rest of the money would go to mitigate regional impacts and, presumably, offset the decline in Lottery proceeds that would be inevitable. Few specifics have emerged so far.
The MMA will be pushing hard to protect the Lottery and to ensure adequate resources for host and regional impacts. Regardless of whether the Commonwealth embraces casinos, though, there are serious and larger issues to address, and those issues cannot wait until 2011 or 2012.
The state has a $1 billion structural budget gap that will carry over to next year, in spite of talk of a left-over “surplus.” The transportation funding gap is $15 billion to $19 billion over the next two decades, as reported by the Transportation Finance Commission. The new investments in revenue sharing, in communities, in biotech and life sciences, in education, in workforce development, in infrastructure are all necessary for our economy.
If all of this is true, and it is, we must have a direct and full discussion about state and local revenues. That’s right, taxes. The major unasked question is whether we can lurch from year to year without an adequate revenue stream to make the investments that we all want.
The question is unasked because this leads to an unpopular topic: taxes.
Clearly the investment needs facing the Commonwealth are greater than any revenues that would come from casinos. Whether you are for or against gambling as an economic development strategy, entertainment opportunity, or revenue generator, the greatest disservice that could result from this debate is if the high-stakes political drama diverts attention from the most important issues and decisions that we must address.
We may want to believe that $400 million will fix all that ails us as a Commonwealth. But there’s a difference between wanting to believe, and actually believing.
The bottom line is that cities and towns are the building blocks for our economy, and as such must receive the support and resources necessary to prevent further crumbling and attract and sustain the additional investment and growth we all want and need.
The reality is that Massachusetts needs to establish a revenue-sharing compact with communities regardless of who wins the casino debate. And if we have three casinos or none at all, the larger and more consequential issues must have the oxygen and attention they need.
Advocacy Executive Director's Reports Revenue sharing is not a gamble
Revenue sharing is not a gamble
Fixing the fiscal woes confronting our communities must be a number one priority for the Commonwealth, regardless of whether we become a casino destination.
It is painfully clear that cities and towns are in fiscal distress, as evidenced by the service cutbacks and increased reliance on property taxes that we see all around us. This is a major challenge that must be solved for the good of our economy and quality of life, and cannot be predicated on whether the state decides to legalize casino gambling.
Adjusting for inflation, communities receive $600 million less in local aid today than in 2002, and this number undercounts the extent of the problem, as municipal costs grow faster than inflation. Localities and their state government partners need to find a way to restore this lost aid, and commit to a revenue sharing plan that ensures that cities and towns can maintain and restore the local services that make our economy competitive, while reducing reliance on property taxes.
The MMA, with the support of experts such as the Massachusetts Taxpayers Foundation and the Center for Urban and Regional Policy at Northeastern University, is pressing hard for a revenue-sharing compact that would eventually devote 40 percent of the Commonwealth’s tax revenues to fund municipal and school aid. Phased in over several years, this plan would re-establish a viable and effective municipal aid revenue stream to buttress the stagnant and insufficient state Lottery, and provide a framework broad enough to fund a renewed Chapter 70 program to address the adequacy and formula issues that persist.
The plan, endorsed by local officials from every corner of the state at our Annual Meeting in January, reflects the essential investment that is required for the Massachusetts economy to grow and compete in the years ahead and reverse the Bay State’s dismal economic performance since 2001.
Last month, the governor announced his intention to locate three casinos in Massachusetts, and now billion-dollar private casino operators are landing on Beacon Hill jostling for attention and advantage, joining the Mashpee Wampanoags and three existing racetracks as advocates for “temporary casinos,” “resort casinos,” and perhaps “racinos” for legislators to ponder. All of this action may, in the words of several State House observers, “suck the oxygen” out of all other issues for the rest of the fall legislative session and into next year.
The governor is still drafting his legislation to bring casino gambling to Massachusetts, yet the debate has begun in earnest. Advocates want the talk to focus on how to allocate the money that could be generated, but it is premature to start spending any of that money now. Talking about dividing up casino profits even before the administration’s plan has been fully reviewed will deflect attention from important questions, including how to protect the traditional state Lottery and the growth of that revenue source from the negative drains caused by slot machines and other expanded gaming activity, and how to mitigate any negative impacts on regions, including traffic, congestion and increased policing needs.
Based on the governor’s estimates, expanded gambling may bring in $450 million a year by 2012, with additional one-time licensing fees collected earlier. The administration says its preference is to divide the money in half, using $200 million a year to fund transportation maintenance and $200 million a year to fund an expanded state income tax credit to offset property taxes paid by almost a million homeowners (about $4 a week for those who qualify). The rest of the money would go to mitigate regional impacts and, presumably, offset the decline in Lottery proceeds that would be inevitable. Few specifics have emerged so far.
The MMA will be pushing hard to protect the Lottery and to ensure adequate resources for host and regional impacts. Regardless of whether the Commonwealth embraces casinos, though, there are serious and larger issues to address, and those issues cannot wait until 2011 or 2012.
The state has a $1 billion structural budget gap that will carry over to next year, in spite of talk of a left-over “surplus.” The transportation funding gap is $15 billion to $19 billion over the next two decades, as reported by the Transportation Finance Commission. The new investments in revenue sharing, in communities, in biotech and life sciences, in education, in workforce development, in infrastructure are all necessary for our economy.
If all of this is true, and it is, we must have a direct and full discussion about state and local revenues. That’s right, taxes. The major unasked question is whether we can lurch from year to year without an adequate revenue stream to make the investments that we all want.
The question is unasked because this leads to an unpopular topic: taxes.
Clearly the investment needs facing the Commonwealth are greater than any revenues that would come from casinos. Whether you are for or against gambling as an economic development strategy, entertainment opportunity, or revenue generator, the greatest disservice that could result from this debate is if the high-stakes political drama diverts attention from the most important issues and decisions that we must address.
We may want to believe that $400 million will fix all that ails us as a Commonwealth. But there’s a difference between wanting to believe, and actually believing.
The bottom line is that cities and towns are the building blocks for our economy, and as such must receive the support and resources necessary to prevent further crumbling and attract and sustain the additional investment and growth we all want and need.
The reality is that Massachusetts needs to establish a revenue-sharing compact with communities regardless of who wins the casino debate. And if we have three casinos or none at all, the larger and more consequential issues must have the oxygen and attention they need.
Written by MMA Executive Director Geoff Beckwith
