21 April 2002

Hull deals a losing hand to taxpayers

I would like to turn your attention to a good writeup by Steve Wilson in the Sunday AZ Republic concerning Jane Hull and her bid for a new Indian gaming setup. Not that I'm opposed to Indian casinos, or gambling in general, but I do think the governor is fumbling and bumbling again, and another alternative fuels fiasco is on the horizon.

The governor's deal would be spectacular for the tribes and a missed opportunity for Arizona taxpayers. If adopted, it would make the more than $200 million lost in the state's alternative-fuels debacle look trifling. Negotiating behind closed doors, the governor's office worked out a revenue-sharing plan with the Arizona Indian Gaming Association that allows a huge expansion of gambling at Valley casinos. Using a sliding scale between 1 and 8 percent, it would bring the state an estimated $83 million the first year, based on casino revenues of $1.5 billion. The agreement stipulates, however, that 88 percent of that money be spent on Native American programs.

Contrast what Hull's deal would give Arizona with the money being received in Connecticut and predicted revenue in New York. Connecticut last year took in $322 million, based on an agreement giving 25 percent of tribal casinos' slot machine proceeds to the state. In New York, legislation passed last fall calls for casinos to give 25 percent of all gaming revenue to the state. Estimates vary, but most expect New York will receive at least $500 million a year, once a half-dozen new casinos are opened. Are tribes in those states up in arms? Hardly. Connecticut's casinos are yielding close to $2 billion a year. The moneymaking opportunity in New York is so attractive that even out-of-state tribes have applied to build gambling halls. If you see 25 percent as excessive, think about this: If the state offered exclusive, long-term franchises in a highly profitable business and you had to hand over a quarter of your revenue to the state but would pay no state, federal or local taxes, the line of applicants would stretch from Phoenix to Yuma.

Also, in case you missed it, there was a featured "My Turn" column by Robert Hazard a few weeks ago that asked some questions on Hull's proposed deal that I haven't heard answered yet ...
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