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Why A Repealed Casino Law Wouldn't Affect The Mass. Budget Much
BOSTON
— In recent days, there’s been some grumbling about a state budget that
relies, in part, on gaming revenue that might disappear if voters repeal the casino law this November.
So we
wanted to parse the numbers and offer an explanation.
On
Monday, the last day of the fiscal year, state lawmakers agreed on a $36.5 billion budget. Out of
that sum, $73 million is set to come from casino licensing and slot parlor
revenue.
Before
the vote Monday, Republican state Sen. Richard Ross cautioned his
colleagues.
“I am
concerned about the sustainability of this particular budget from the viewpoint
that we do predicate it on certain anticipated revenue that we hope comes from
something that could be the victim of a citizen petition,” he said. “I do worry
that so much of our budget is relying on gambling revenues.”
Anti-casino
activists also sent a warning about “phantom revenue,” given that voters could
repeal the casino law through a ballot referendum.
But,
in some ways, the issue isn't about dollars and cents; it’s more about the
politics of gaming.
On
Monday, John Ribeiro, chairman of the group Repeal the Casino Deal, said in a
statement: “You'd think legislative leaders would have more smarts than to
balance the state budget on money they know full well might not exist in a few
months.”
But
budget experts say the budget routinely relies on anticipated revenue.
Andrew Bagley, director of research and public
affairs at the Massachusetts Taxpayers Foundation, said the included gaming
money is “minimal,” and will have virtually no impact on the budget.
The
casino revenue — that $73 million — is only 0.2 percent of the total budget.
“It’s
perfectly manageable should those revenues not be available,” Bagley said. “It’s
not going to be a problem to balance the [2015 fiscal year budget].”
Noah Berger, president of the Massachusetts
Budget and Policy Center, agrees. He said there are plenty of
unpredictable risks in calculating a budget. The biggest one being tax
revenue.
“You
build the budget based on assumptions about economic growth and a number of
other factors that affect tax revenue,” he said. “And, if the tax revenue
numbers are off by 1 percent in either direction, that’s a significantly larger
swing than the casino revenue money.”
Both
Bagley and Berger agree $73 million in a $36.5 billion budget is tiny. And if
voters repeal the casino law this November, they say the effect would depend on
what’s happening in the overall economy at that moment. The state could dip into
the rainy day fund to cover the gaps left from the $73 million shortfall. But,
then again, revenue could be greater than expected, so maybe there will be no
shortfall at all. It’s all a bit of a guessing game, and lawmakers regularly
tweak the budget throughout the year depending on revenue growth.
What’s
unique in this $73 million instance is that the voters, not the lawmakers, hold
the purse strings.
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