MINDSETTER ™ Matt Amorello: How Casinos Could Have Saved Our Roads
Thursday, February 23, 2012
Matt Amorello, GoLocalWorcesterMINDSETTER™
Now on a more local level when there was a chance to improve state spending on infrastructure development and maintenance without a gas tax hike or fare increases we dropped the ball. I am speaking of Chapter 194 of the Acts of 2011 establishing casino gambling in the Commonwealth.
The state legislature commissioned the firm Spectrum Gaming Group to analyse the potential revenue that could be derived from casino gaming and slots ("Market Analysis, Gross Gaming Revenue Projections: An Update. March 31, 2011). The report projected gaming revenues at $1.6 billion by 2016. The legislation established a 25% tax rate on these casino revenues. Doing simple math 25% of $1.6 billion is $400 million. Just an estimate on figures provided by the study but a good place to start a discussion on investment needs of Massachusetts and the use of these revenues.
And obviously the state legislature used these projections to prioritize how these revenues would be spent. So how did Chapter 194 allocate the revenue from casinos, well they did this: 2% Massachusetts Cultural Council, 1% tourism fund, 6.5% community mitigation fund (assistance to hosting city/town for public safety, infrastructure improvements associated with hosting, etc), 4.5% local capital projects, 20% Gaming local aid fund, 10% Commonwealth stabilization fund, 14% education fund, 9.5% gaming economic development fund, 10% debt reduction (pension fund payments), 5% public health trust fund, 2.5% race horse development, and finally 15% Transportation and Infrastructure Development fund.
Looking at this distribution we see how the state seeks to address some of the impacts of casinos on the Commonwealth and how to best deal with them. Hence $10 million dollars to the horse racing industry which may be impacted by the casinos drawing patrons away from the state's "many" horse tracks and assistance to numerous thoroughbred farms located in Massachusetts. Another $12 million dollars to cultural councils and tourism not sure of this one either, I imagine the casinos are going to spend millions of dollars to bring people to their facilities which will bring them to our state and like most folks who travel to casinos they like to "take a break" from the action and see the local sites, ever wonder why the Hoover Dam on the Nevada Arizona border is one of the most popular tourist attractions in the West.
The distribution continues along this vein more money for the state health care law, additional money for the unfunded pension liabilities, and assistance to cities and towns anticipating impacts on lottery revenues which are devoted to local aid. The one area that could have been addressed more effectively and yes at the expense of the aforementioned allocations was transportation and infrastructure needs statewide.
The roads, bridges, rail network (commuter and subway), and Regional Transit Authorities (RTA) all are in need of increased spending to provide the services we expect both from a safety perspective and convenience of use. These functions of state government are critical to the success of our economy. I believe the most important function of state government. The maintenance needs of the state highway network, the rail system and the aging bus fleet of the RTAs are all reaching a critical stage. The likelihood of the legislature passing a gas tax increase, establishing border tolls on I-93, fare hikes, and other revenue increases are pretty remote. And yet there is universal agreement on the needs of our transportation network.
The casino legislation was the first bill in a long time and probably will be for a long time that will bring new revenue into the state without a tax hike a fare increase or a change in fees. It is too bad that so little of these new revenues are going to such a critical area of state government that has such a huge impact on our overall economic heath.
As the state legislature begins to debate the new budget it would be a good time, as my son would say, to do a "Redo" on the allocation of casino revenues away from the ponies and back to the bridges and roads.
Matt is currently President of the Mayo Consulting Group. Mayo provides consulting services to engineering, construction, and manufacturing firms both in the United States and overseas. He was the former Chairman/CEO of the Massachusetts Turnpike Authority, Commissioner of the Massachusetts Highway Department and a four term State Senator for the Second Worcester District. He is a graduate of Assumption College, holds an MPA from American University in Washington, DC and a JD from Suffolk University Law School. He may be reached at [email protected].
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