Commentary; Posted: 4/13/05
Budget bet with gambling is off base
Minnesota has a spending problem, not a revenue problem, Gov. Tim Pawlenty likes to say. Then why does the governor propose to cover nearly half the state budget deficit with new revenue ó from gambling?
Standing firm on his pledge to not increase state taxes, Pawlenty wants to raise $200 million in the next biennium through a licensing fee for a state-tribal casino in the metro area. Thereafter, the state would reap about $164 million annually, say proponents of a casino partnership between the state and the White Earth, Red Lake and Leech Lake tribes of northern Minnesota.
Minnesotans should resist the lure of ìeasy moneyî from gambling, a dubious source of revenue for important public services and a pastime whose hardships usually befall those least able to withstand them.
Two years ago the governor said there are better ways to raise government money than through ìactivity that destroys lots of peopleís lives.î He was right. New taxes or no new taxes, state officials who covet casino riches abdicate their responsibility to determine an appropriate level of public services while ensuring the state lives within its means.
Unfortunately, Minnesota is not alone. Cash-strapped states need revenue, and last year more than 20 state legislatures considered proposals to use new gambling revenues to fund public services.
But thereís no civic virtue in raising money through illusory riches in a rigged game where the house always wins in the end. Even less appetizing is the prospect that the state, in partnership with the tribes, would have to aggressively market its casino product to remain competitive in a region already saturated with gaming.
In effect, the state would be encouraging citizens to gamble more than they otherwise might. Itís especially perverse that proponents often cite education as a chief beneficiary of state-sponsored gaming.
There is ìgrowing evidence that state-sponsored gambling is both inequitable and inadequate as a long-term revenue source ó and that the associated social costs of encouraging destructive gambling behavior may offset much of the revenue gains enjoyed by states in the short run,î states the Institute on Taxation and Economic Policy, a nonprofit, nonpartisan think tank in Washington, D.C.
Another metro casino could have the effect of shifting money around, with patrons spending less money on other recreation or consumer goods, thus depriving the state of sales-tax revenue.
Claims about the social costs of gambling abound. The Minnesota group, Citizens Against Gambling Expansion, quotes a study that claims taxpayers pay $2 to $3 in social costs for every $1 the government gets from gambling. Between 25 and 50 percent of casino revenue comes from problem or pathological gamblers, the group says, and up to 40 percent of white-collar crime is caused by gambling.
Compulsive gambling hits the poor the hardest, said a 1997 Minnesota study of 1,800 Minnesotans in state-run gambling treatment programs. More than half of them had incomes of $20,000 or less. The amount of debt as a proportion of income was found to be highest among the poorest of the gamblers seeking treatment.
In their zeal, groups such as CAGE may be given to hyperbole, but thereís no question that gambling exacts a terrible toll from too many of those who partake in it.
Just donít go there, is our advice to Pawlenty and the Legislature. ó An opinion from the ECM Editorial Board. Forest Lake Times is part of ECM Publishers, Inc.
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