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Rep. Marjorie Smith: Why the casino bill really failed in the House

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June 02. 2013 4:15PM

The pundits and the analysts have told us why the New Hampshire House of Representatives voted "no" on SB 152, the casino bill. Two of their favorite reasons are hostility to Gov. Maggie Hassan (wanting her to look bad) and moral objections to gambling. As someone who actually voted, I thought it might be helpful to shift the discussion from imaginative theory to fact.

I have enormous respect for the governor because of her position as chief executive of the state and because of her vision for a state where we recognize our obligations to those who need some help. I share that vision and would like to work by the governor's side to achieve it. I was elected to legislate, not to apply my own moral standards to others whose perspective might differ from mine, so I leave the questions of morality to others. If people want to gamble, that is their choice. But it is the state's obligation to ensure that if we are giving one out-of-state company a monopoly, it should be a fair bargain for the state.

When I considered the casino bill I had a number of questions, but foremost was, "show me the money." I pretty much don't care about where the money comes from, although I wish property taxes were lower, and I worry about business taxes being too high. What I do care about is where it goes.

I want to make sure that we are able to meet the needs of those of us who depend upon the state for their and our survival: those who are sick, those who struggle to overcome disabilities, those whose sound education now can shape their future and ours. Money isn't the only thing we need, but it's right up there near the top of the list to meet our social, educational and environmental needs.

My question on pretty much every revenue bill is "Show me the money."

You might know that I sat on Finance for 12 years, four as chairman. I know the budget process. A few years ago, when I chaired the committee of conference on the budget bills, there was, as there always is, a keen interest in revenue alternatives, including gambling. Gov. John Lynch had created a commission to study gambling. Headed by Andy Leitz and made up of a broad mix of members, the committee came down with a number of recommendations. One that was most compelling addressed the infrastructure that should be in place before we approve any expansion of gambling. The commission said:

"New Hampshire needs to review its regulation of gaming, with or without an expansion of legalized gaming. To insure integrity and public confidence, this review should be completed and necessary changes implemented before any expansion is enacted."

We put $250,000 in the budget, and three years later nothing has been done to put a regulatory or enforcement system in place. What we have are provisions for a marketing agency to take on this complicated responsibility. We could have taken a chance and passed this bill. But, I ask, "Show me the money."

Even the ardent supporters of SB 152 acknowledge that the earliest we could expect to receive the $80 million is June of 2015. And a Millenium Gaming spokesman who appeared before the joint committee conjectured that it could be 2017 but would likely be 2019 before the state share of the gambling take would reach state coffers.

But what about jobs — construction and casino employment jobs? Nothing in the bill would guarantee that our New Hampshire construction workers would be employed. One labor leader talked with sadness about a major construction project recently where out-of-state workers were brought in when we have so many qualified workers looking for jobs.

If this bill were to pass, there would be no revenue to the state for two years, and since this Legislature cannot control what future Legislatures will do, it would take a fortune teller to predict how any hoped for revenue would be spent.

OK, you say, you're willing to wait. But just what are you willing to wait for? SB 152 called for 30 percent of net machine income distribution going to the state. In 2012, HB 593 called for 49 percent and SB 182 called for 40 percent. In 2010, the bills called for 39 percent. In 2009, 49 percent, in 2008 50 percent and in 2004, 55 percent.

The total tax revenue from 3,000 slot machines — video lottery terminals to those in the know — over 10 years, is predicted to be $489.5 million at the rate called for in this bill. At the 55 percent in the 2004 bill, the estimate would be $897.4, almost $330 million more. And the 55 percent rate is close to what Millenium pays in Pennsylvania.

The best way that I can explain the finances in this bill would be to say that Millenium is offering a payday loan to the state. Eighty million dollars that we may or may not get by the end of the next biennium has to be paid back by the state, taking a lower rate in future casino taxation than in any other casino/gambling bill that has ever come before the Legislature. It is barely over half the percentage that goes to Pennsylvania.

Meanwhile, The budget that passed the House without the $80 million casino licensing fee provided more funding than the governor's budget for some of the areas that matter most to you and to me, and in other areas the cuts were minimal. Since then additional revenue has become available. I am not saying we do not need more money. I am not saying that we can meet all our needs with what we have now. I am saying that the money in SB 152 will not be there to help us in the next biennium, and it is too little, too late for us to tie ourselves into a bad financial deal for the state.

Rep. Marjorie Smith is a Democrat from Durham.

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