My Turn: Props 94 thru 97: Smoke and mirrors
We have recently been bombarded by television ads and fliers admonishing us to approve (or disapprove) Propositions 94 thru 97 on the Feb. 5 ballot.
These propositions, if approved by the California voters, would ratify an amendment to an existing compact between the state and four Native American tribes to increase by more than a factor of three the numbers of now-approved slot machines from 8,000 to 25,000.
As a result, the state hopes to realize an increase in casino taxes by $9 billion over a 20-year period. Initially, I was skeptical of this promised “bonanza”; after all, how can anyone make an accurate prediction for a 20-year period?
The Official Voter Information Guide (Supplemental) provided some insight to the validity of the proposed concept, but it left many unanswered questions.
Consequently, I turned to the Internet, which proved to be a fountainhead of information on Native American casinos, the impacts of gambling and slot machine economics, much more information than I can report herein. Nevertheless, below are a few highlights of what I learned.
First, the $9 billion “windfall” being promised is a highly optimistic “guesstimate.”
The Legislative Analyst in the Voter Guide lists six possible scenarios, any one of which could significantly make the $9 billion unreachable. It appears to me, and perhaps to the Legislative Analyst, that the $9 billion is an illusion as is the “pot of gold at the end of the rainbow.”
Secondly, the idea that the $9 billion realized over the 20-year period would have any material impact on the state’s budget woes is flawed. In a Jan. 13 editorial, the San Francisco Chronicle stated, “the new slots would amount to, at best, perhaps one-tenth of one percent of the state’s budget.”
Obviously, that “budget bailout” argument for the propositions is, at best, an exaggeration.
Thirdly, the implied “idea” that the Propositions will bring $9 billion of “new” money into California from other sources is patently nonsense. Actually, if it ever exists, the $9 billion will be largely “local” money “diverted” by the casinos from expenditures that the casino patrons would otherwise be making for food, clothing, shelter, education, various services, health care, recreation, etc., etc., thus decreasing the economic viability of the local communities.
Since most of these local expenditures are taxed by some government entity, their absence will reduce governmental income. Logic indicates that any local spending by the casinos for labor, supplies and services will significantly offset the “displacement” losses to the communities.
It would appear that the Governor’s plan merely takes money “from one pocket”, i.e. the local economy and taxes, and “puts it into another”, i.e. the state’s General Fund.
Another aspect of the social and economic costs to individuals and the communities is that a significant number of casino patrons become “problem or psychological gamblers.” The costs of compulsive gambling include employee theft and embezzlement, debt, bankruptcy, illness, suicide, family disruption, social service costs, etc. These are not minor considerations when approving the introduction or expansion of gambling facilities in any community.
Although I have empathy for the desire of the Native American community to improve the standard of living for tribal members, I believe that they must curb their greed (and that of their non-Native American management firms) and strike a happy medium that satisfies their needs while minimizing the negative aspects of gambling on their adjoining communities and the state.
All in all, I view the Governor’s proposal to be an ill-conceived, poorly researched, and inadequately evaluated concept for solving the state’s fiscal problems. However, perhaps the greatest deficiency of the proposed propositions is that they will expand a socially-questionable industry that results in the debasement, economic disaster and criminality of many of its patrons in addition to those labeled problem gamblers.
Now is not the time to award millions of dollars to a few at the expense of many more.
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