After casinos, then what?
Yesterday on City Hall Plaza workers were putting up the Big Top for the Big Apple Circus. A few blocks away at the State House another circus was drawing to a close for another season.
All the usual barkers turned out in force for the much-anticipated hearing on Governor Slots' crusade to bring casino gambling to Massachusetts. The hotel workers union dutifully packed the Gardner Auditorium with a Red Sea of members for hours and hours of testimony. But everyone, including Slots himself, knows this game is almost over. On any given day any two Red Sox players could draw a larger crowd on Boston Common than the governor did yesterday morning for his big procasino rally before the hearing.
(Classless moment: The union crowd booing the widely admired Bob Massie, a former candidate for lieutenant governor and a Deval Patrick fan, who left his home where he is largely confined awaiting a liver transplant, to make an impassioned plea against casinos.)
In short order, the Legislature's Joint Committee on Economic Development and Emerging Technologies is likely to reject the governor's signature three-casinos-and-counting proposal. And the entire House will follow quickly, maybe by week's end. It is a good thing. Thank you, Mr. Speaker.
This, however, is not the moment to celebrate. It is, instead, the moment to get to work. The state and local budget pressures that brought this circus to town in the first place have not gone away. The recession on our doorstep will only make those pressures worse.
What we need is not easy-money solutions like casinos, but a sustained and honest conversation about our real problems and the real solutions. (Fat chance, you say.) Connecticut and Rhode Island both have slots; both states also have higher taxes and higher unemployment than Massachusetts. It is instead rising healthcare costs and volatile state revenues that are at the heart of our chronic budget problems - not something we have heard much about lately from a governor who has framed the conversation around slot machines.
MassINC, one of several good think tanks in this town, looked at the state budget over two decades and told us what many already know: that the rising cost of healthcare is devouring the budget, crowding out almost everything else. Consider: Medicaid, which provides healthcare to more than 1 million low-income people, accounted for almost two-thirds of all state spending growth over the last 20 years. Two-thirds is a big number. Medicaid has grown at almost five times the budget as a whole. Universal healthcare will not make anything easier.
Massachusetts is hardly unique in facing exploding healthcare costs. But any budget solution is going to require dealing with healthcare, easily the largest and fastest-growing piece of state spending. It is Senate President Therese Murray, not the governor, who has made this her issue. But the governor, the Speaker, and the Senate president are going to have to find a way to work together if anything good is to happen.
The MassINC analysis, written by Cameron Huff, formerly of the Massachusetts Taxpayers Foundation, also highlights another phenomenon that has gotten lost in the myopia over gambling: the extreme volatility of some state revenues, the capital gains tax in particular. For instance, between 2002 and 2006, capital gains tax revenue accounted for 54 percent of the state's growth in tax revenue. But capital gains are a risky building block for a budget: In 2002, capital gains revenue declined almost $800 million in a single year; in 2006, capital gains revenue was at a record $1.7 billion.
"A major, sustained decline in capital gains receipts clearly would plunge the state's finances into crisis," Huff says. Guess which way capital gains are headed given Wall Street's direction?
Doing something serious on healthcare or supporting a hike in the gas tax or a broadening of the sales taxes takes a lot more political courage than championing slot machines. It is easy to understand why the governor, an impatient man as he describes himself, chose the course he did.
Unless those who oppose expanded gambling are now willing to dig in and find alternatives, the circus will be returning to town, sooner rather than later. Bet on it. When it does, the economy and the budget may be in even worse shape. And slots will be even more appealing.
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.
