EDITOR'S LETTER: Ill, baby, ill
by James Rutherford
July 1, 2010
New
Jersey is an interesting study in how politics is responding to the ravages of
this recession.
New
Jersey is an interesting study in how politics is responding to the ravages of
this recession.
As I write this the state had until June 30
to balance its fiscal 2009-10 and 2010-11 budgets. This meant plugging deficits
that totaled more than $10 billion. And it’s going to get worse. In testimony
before lawmakers at the start of this year, David Rosen of the nonpartisan
Office of Legislative Services said 2009 was the worst in modern state government
history for tax collections: Aggregate revenue was down 12
percent.
Atlantic City’s woes have played their part,
as you’ll see in this issue in a feature story titled “Turning the Tide” by
veteran gaming writer Paul Doocey.
Revenue from the 8 percent direct tax on
casino win was down 14 percent in 2009 as GGR fell more than 13 percent, the
third straight year of declines. The industry shed more than 3,400 peak season
jobs and $91 million in wages.
Rosen said that even if a “real recovery” was
possible next year, it will take until 2014 to get the state’s finances to
where they were in 2008. “It is
going to be very hard for us to simply grow out of this problem,” he said. “It
is going to have a profound impact in the years going forward.”
The ensuing months saw war break out between
Republican Gov. Chris Christie and the Democratic-controlled Legislature over
how to eliminate the deficits, with Christie and his partisans in the Senate
and Assembly mostly coming out on top, which means cuts in education, municipal
services, pensions and public-sector jobs.
Last month, in the middle of this
pressure-cooked atmosphere, five lawmakers, all Democrats, announced plans to
convene a “gaming summit” aimed at devising “comprehensive solutions” to help
the casinos and a severely ailing racing industry.
Mainly they’ll be trying to resolve their
opposing positions on VLTs at the state’s three tracks. Four of the legislators
are from southern counties, and led by Senate President Stephen Sweeney and
Sen. Jim Whelan they want to preserve Atlantic City’s casino monopoly. Whelan
was once mayor of Atlantic City, and his district includes the embattled
seaside resort. On the other side is veteran Sen. Jim Lesniak, representing Union
County in the north, who believes with the tracks that slot machines are
necessary to save New Jersey racing from extinction. Lesniak also has floated
proposals to legalize sports betting and gambling and betting on the Internet.
Another northerner, Assistant Senate Majority Leader Paul Sarlo, has called for
a full-scale casino at the massive Meadowlands Sports Complex.
The casinos, which pay $30 million a year in
purse subsidies to keep VLTs out of the tracks, say the last thing they need in
this economy, hemmed in as they are by competition in Pennsylvania, Delaware,
New York, Connecticut (and Maryland in the next couple of months), is for
people to have more reasons not to come to Atlantic City. They have a strong
case. (Sweeney has vowed that no bill to expand casino gambling outside
Atlantic City will see the light of day in his Senate.)
Racing and its champions in Trenton have an
argument that is equally strong, for without slot machines the tracks are
almost certain to die — and as is true just about everywhere else it will have
been the legalization of casinos that ultimately killed
them.
The goal of the organizers of the summit is a
constitutional amendment authorizing some form of expanding gambling. They
appear to think that the way to attack the problem of too much supply is to
enable more supply. (Massachusetts, Ohio, Kentucky, Alabama, Florida, Texas,
take note.)
Then there is Christie, who supports giving
the Revel boondoggle a $350 million break on sales and room taxes (which most
New Jerseyans oppose, according to a recent poll). The governor formed a
special commission earlier this year to study the future of casinos and racing.
Led by a former chairman of the N.J. Sports and Exposition Authority, which operates
the Meadowlands, the commission’s report was due June 30.
James Rutherford
is a New Jersey-based freelance writer.
Did you enjoy this article? Click here to subscribe to the magazine.
