In the first post of this series (http://tiny.cc/BMG-Reason1) I suggested why expanded gambling is more appropriately described as economic cannibalism, and not economic development. In this post I want to suggests at least one alternative — and faster — way of creating the jobs that Mass. residents desperately need. The full list of reasons is at http://tiny.cc/FiveReasons-NoO…
Reason #2 – If the goal is to create and sustain decent jobs, there are more efficient mechanisms.
Thousands of out-of-work Massachusetts residents need and deserve jobs as fast as possible. Casinos and slot machine warehouses are not the answer. Even under the most optimistic scenarios, casino developers wouldn’t be ready to put shovels in the ground for 12 to 18 months. The desperately needed construction jobs that casino development could create will disappear after two years. And, as per Reason #1, the jobs operating the casinos come at the expense of jobs lost at existing retail, restaurant, and entertainment businesses.
To make matters worse, predatory slot machine gambling is one of the most regressive taxes possible, given the socioeconomics of its customer base. That is, the revenue to fund the creation of these jobs comes from those who can least afford it.
By comparison, the gas tax increase that died last year (19¢per gallon) would have raised $500 million to pay for necessary infrastructure repairs and improvements, creating between 10,000 and 13,000 jobs paying $15-20/hour with benefits. These jobs — and the thousands of indirect jobs they would spawn — would begin almost immediately, and wouldn’t end in two years like casino construction jobs, but would continue indefinitely to address the ongoing need for maintaining our infrastructure.
The cost to the average Mass. household of the proposed gas tax increase would be between $8-10/ month — an amount that someone playing the slots could expect to lose in 10-20 minutes at $.50-1.00 per play. [www.massbudget.org/documentsearch/findDocument?doc_id=660]
The gas tax died because it is politically easier to rely on gambling addicts to blow their paycheck or exhaust their monthly Social Security than to pass a broad-based tax, where everyone shares the burden. (To make a gas tax more progressive, the State could sacrifice 10-15% of potential revenues and raise the income tax exemption level and/or increase the amount of the Earned Income Tax Credit. In contrast, there is nothing the State can do to turn predatory casino/slot machine gambling into a progressive revenue source.)
How ironic that fiscal conservatives who worry about the State spending beyond its means are lining up to partner with an industry whose business model depends on the success of gaming technology to transfix and addict customers, to get them to keep pushing that “play” button until they’ve exhausted their credit card limit, until money set aside for retirement, tuition, car payments, rent, or mortgage goes down the toilet that is modern day slot machine gambling. We can do better.
Casinos vs. Gas Tax: A Tale of the Tape
Shovels in the ground
Casinos: 12-18 months
Gas Tax: Immediate
Number and duration of construction jobs
Casinos: 10-15,000 construction jobs plus ripple effect jobs lasting 2-3 years
Gas Tax: 10-13,000 construction jobs plus ripple effect jobs lasting indefinitely.
Long-term economic impact
Casinos: Ongoing operation of casinos cannibalizes existing retail, restaurants, theaters, entertainment businesses. Minimal net economic development.
Gas Tax: Sustained construction and ripple effect jobs; sustained increase in income tax revenues; repaired and modernized roads, bridges, tunnels, and dams enhance Mass. business climate.
Cost of new infrastructure to administer
Casinos: Millions of dollars
Gas Tax: None
Costs resulting from increased crime, criminal prosecution, incarceration, alcohol and drug addiction, family violence, suicide, bankruptcy, etc.
Casinos: Millions of dollars
Gas Tax: None
It’s interesting to compare how the sides of this debate are argued. From the proponents, I hear largely soundbites that are asserted as if we’re supposed to take their truth for granted. From the opponents, we get well-reasoned arguments, empirical data, and a holistic analysis from people who have clearly done their homework. The pro-slot-machines argument reeks of parochialism and wishful thinking.
That’s why it’s not GAMBLING, but Gaming. It’s not a slot parlor. It’s Destination Resort or the more recently coined phrase to disguise the importance of slots to their revenue stream.
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p>Professor Goodman in “The Luck Business” correctly pointed out that the studies, statistics, reports and research presented by opponents is routinely dismissed as ‘biased,’ while reports from the Gambling Industry are believed, supported and promoted.
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p>It’s a disappointing commentary on elected officials incapable of critical thinking or more interested in committee chairmenships than the future of the Commonwealth.
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See Today’s listing of unemployment statistics by state which makes clear that gambling is no job engine. Casinos are no job engines either and, in fact, have dropped more than 20% in revenue nationwide, with large numbers in bankruptcy, three in Atlantic City alone.
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p>Using Casinos as a “revenue fix” is buying the Brooklyn Bridge from a Con Man.
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p>Now, cutting back on giveaways, 50% potential revenue is lost due to “giveaways, tax breaks for corporations, and grandfathered incentives” – THAT has potential. The so-called “tax expenditure budget”, see details revenue the Commonwealth could have had, but gave away due to current and past lobbyist efforts. The Tax Expenditure Budget lists all these giveaways, give backs, loop holes, and exemptions They come to 50% of the potential revenue that our state might have had.
Closing those tax loopholes for big businesses is the way to go, regardless of what happens with casinos.
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p>Now, sales tax is 6.25% for everyday people. They did it because they needed money, and it was the simplest to raise.
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p>If all of us have to pay an extra 1.25% on purchases, then these fat cats should have to cough up more $$$$$$$ for the state.
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p>And why is revenue down at casinos?
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p>Because, when most people don’t have money to spare, they are not going on a trip to Las Vegas or Foxwoods or wherever.
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p>At the state level, getting rid of these tax breaks and giveaways for the wealthiest will get money for the state from those few who can afford it.
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p>Do it, whether there are Casinos, Dancing Bears, Lotsa Drummers Drumming, or whatever, or not.
Thanks for enlightening!
…but you won’t attract me with a gas tax argument either. We should pay for infrastructure with general revenues, not an ad hoc tax. I’m also not looking forward to artificially hiking the price of gas any more as it adds up for people who need to watch every penny and dollar.
And we aren’t “artificially” hiking the price of gas, the price of gas is artificially low and taxing it would be making it cost closer to its true cost.
There are ways to reduce the impacts of the gas tax based on income and having lived in Europe, there is no comparison with their public transportation system.
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p>Who wants to drive in Boston?
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p>There are other options available if Beacon Hill would listen instead of accepting vague promises.
is to at least acknowledge that there is a distinction to be made between obligatory revenue sources (taxes, gas or other) and voluntary revenue sources (gambling, lottery or casino). I quite agree that gambling revenue has a coercive look and feel when you watch pitiful gamers in action. Still, the act is understood as voluntary by most people. Paying a gas tax is not understood as voluntary. Taking people’s money “by force” (evil taxation) is frowned upon by many. Giving people an entertainment choice that coincidentally funds government, even if it is mostly the poor who choose it, is not “forced” and is therefor unobjectionable. This is not my position, but it is a common position and it should be acknowledged here rather than simply equating taxes with gambling revenue as this poster has done.
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p>I’m not saying you have to agree with the above distinction, but I think it is stronger to acknowledge it and deal with it in some fashion. It would make the post less susceptible to a “moonbatty” accusation.
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p>There is naturally also a practical reason why sin taxes and gambling are so popular among legislators. It is actually because they are regressive and take advantage of the payers acute weakness to addiction and/or financial incompetence. People who have shameful addictions and are poor have little wherewithal to complain about being taxed excessively. That makes them very tempting targets for out-sized taxes, like the cigarette tax, or awful illogical gambling opportunities, like the lottery with its heavy skim to the house (state). Given the choice between taxing the dis-empowered or taxing the well organized and vengeful interests of big business or even middle/upper middle class voters, the government would rather exploit the dis-empowered. It’s easier to get reelected that way.
I would prefer that it simply raised revenue and reduced consumption. The revenue it raises should replace the revenue that it loses, through contracting the economy. I don’t think the revenue it raises would be extra money to spend on shoveling anything.