Posted on 01/17/2004 2:05:59 PM PST by calcowgirl
Proposed gambling initiative wouldn't help state budget
Cardrooms, racetracks could get slot machines
SACRAMENTO – A proposed ballot measure that could expand casino gambling in California would generate at least $1 billion a year, but none of that would go to help close the state’s massive budget deficit, according to the nonpartisan Legislative Analyst’s Office.
The initiative targeted for the November ballot asks all of the state’s Indian casinos to give 25 percent of their gross winnings to the state.
If any tribe refuses, a select group of horse racetracks and cardrooms would get to divide 30,000 slot machines. The tracks and card clubs would pay a 33 percent tax on their slot winnings.
Under either scenario, the measure would generate more than $1 billion a year, concluded the Legislative Analyst’s Office. But, in either case, “These funds primarily would be provided to local governments to increase funding for firefighting, police and child protective services,” the office said.
The state would collect up to 1 percent for administrative costs of the initiative and $3 million for “responsible gambling” programs.
The tracks and cardrooms are bankrolling the initiative. Its introductory language suggests that the measure was inspired by, and is offered as a partial solution to, the state’s ongoing financial troubles.
“As a result of California’s budget crisis, the state needs to find new ways to generate revenues without raising taxes,” the initiative declares.
The initiative’s backers seized on the legislative analysis as confirmation of their revenue projections.
“We think $1 billion is the floor,” said Barry Fadem, an attorney who drafted the measure. “The ceiling could be as high as $2 billion.”
Fadem predicted that it will matter little to voters that most of the money will go to local governments, not the state.
But it could matter to Gov. Arnold Schwarzenegger, who so far has taken no position on the measure.
Schwarzenegger has asked gambling tribes to pay their “fair share” to the state. In his new budget, he included $500 million that he hopes to collect from Indian casinos.
Howard Dickstein, a tribal attorney spearheading at least one group that has formed to oppose the initiative, said he was disappointed the analysis did not attempt to quantify a broad tax benefit the initiative would bestow on the affected tracks and cardrooms.
In exchange for the 33 percent cut of slot winnings, the tracks and cardrooms would be shielded from almost any new taxes, fees or levies.
“It gives with one hand and takes with the other,” Dickstein said.
The ballot measure earmarks 50 percent of its revenues for county programs that serve abused children and those in foster care. An additional 35 percent would be distributed on a per capita basis to cities and counties for law enforcement. Fifteen percent would be distributed to local governments for fire protection.
If tracks and cardrooms ultimately get slots, the cities and counties in which those facilities are located would receive an additional 2 percent and 1 percent, respectively, of gross slot winnings.
Card clubs on the list include Oceans Eleven in Oceanside. But the Del Mar Thoroughbred Club was not included among the tracks in line to receive slots.
The attorney general is expected to clear the measure for circulation next week. Fadem said signature gatherers will hit the streets as soon as possible.
As a proposed amendment to the state constitution, the measure needs nearly 600,000 valid signatures by early summer – a fairly tight timeline – to qualify for the November ballot.
However, I'm confused, why should Indians have a monopoly on slots?
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