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Governor Deval Patrick is considering including projected casino licensing revenues in his budget proposal for the next fiscal year, a risky political maneuver designed to increase pressure on the House to approve his plan for three resort casinos in the state.
In pushing his gaming plan into the realm of the state budget, Patrick is dangling before the Legislature the prospect of an $800 million infusion of licensing fees paid by casino developers as the state faces a deficit of as much as $1.45 billion.
House leaders, though, said the governor would be met with stiff resistance if he puts such revenue in the budget before his casino bill has even received a formal hearing, much less been approved by lawmakers.
"I don't think it's wise at all," said Representative Robert A. DeLeo, who, as chairman of the Committee on Ways and Means, is the House's chief budget official. "That is such a contentious issue. It's going to require extensive hearings, and in an era where we're calling for transparency in the budget, for us to rely on that money would be a misstep."
House Speaker Salvatore F. DiMasi's spokesman, David Guarino, called any move to put gaming revenues in the budget premature.
"You should put revenue in the budget that you know is going to be there, not revenue you hope is going to be there," Guarino said.
With a big budget gap, including casino licensing money would put pressure on lawmakers to pass the governor's proposal or find other ways to balance the budget as required by state law. When the governor introduces his budget, within three weeks, legislators will spend months reshaping it.
"He's putting a stake in the ground, which is completely appropriate," said Stephen Crosby, dean of the McCormack Graduate School of Policy Studies at the University of Massachusetts at Boston and a former top aide to Republican governors Paul Cellucci and Jane Swift. "It's also completely legit if the Legislature decides to take that stake out of the ground."
In the gambling legislation that he filed in October, the governor called for a competitive bidding process to license three casinos in separate regions of Massachusetts. Bidding for each 10-year license would start at $200 million, but could go much higher, say administration officials and potential investors.
Those funds would be available immediately, but it is unclear how Patrick would use the money if he put it in the budget and whether he would use it for one-time spending or spread it over the 10-year life of the license.
His casino bill calls for the bulk of the proceeds to be split between property tax relief for homeowners and transportation infrastructure improvements. It would also be used to help host communities pay for additional police and other services, for public health programs, and operating a new state gambling oversight agency.
In addition to the licensing fees, Patrick is also counting on another $400 million a year in the state's share of gambling proceeds, but those revenues would have no affect on the current budget and would not start flowing until the casinos are built.
Administration officials first indicated two weeks ago that they were considering using casino revenues in the upcoming budget. Administration and Finance Secretary Leslie Kirwan said at a legislative hearing on Dec. 18 that casino revenues could help combat a fiscal year 2009 deficit, which she projected was between $1.2 billion and $1.45 billion.
"We may," Kirwan said when asked specifically about using the revenues in the upcoming budget. "We have not made a decision as to whether gaming revenues would be included, but it is under consideration."
Lieutenant Governor Timothy P. Murray said yesterday that the casino revenue was still on the table.
Patrick and his supporters are facing a friendlier atmosphere in the Senate, which has voted in favor of expanded gaming proposals in the past and will review the budget after the House.
"I would say that any proposal that's not a broad-based tax increase needs to be seriously entertained," said Senator Steven C. Panagiotakos, chairman of the Ways and Means Committee in the Senate, who said he would not object if Patrick put casino money in the budget. "The bottom line is we should have a full debate on this measure because it's one that would create jobs, as well as new revenue, and nothing does that like this gaming proposal does."
Senate President Therese Murray has supported casino gambling. But even some who are receptive to the governor's plan said forcing the question too soon could hurt Patrick's case.
"By doing that, he would be playing more into the hands of people who are critical of his proposal than those in support," said Representative Bradley Jones, the House minority leader and a supporter of expanded gaming. "I don't think it helps his cause."
Specialists who follow the state budget said yesterday that governors in the past have sought to include money in budgets for programs that have needed legislative approval, but not typically on issues of such great significance.
Last year, Patrick's $26.7 billion budget proposal relied on closing so-called corporate tax loopholes that would have raised up to $500 million a year, but the Legislature set aside the proposal after DiMasi criticized it as destructive to the state economy. In 2003, Governor Mitt Romney sought budget savings of $180 million by transferring state property to the pension fund and $191 million by merging the Turnpike Authority and the Highway Department, proposals that were rejected by the Legislature.
The outcome of the casino debate may hinge on how the Legislature decides to balance the immediate demand for revenue against the demands of scrutinizing a complex proposal of historic proportions.
"It basically passes the buck to the Legislature," said Michael Widmer, president of the Massachusetts Taxpayers Foundation. "It says, 'Well, if you're scoffing at this, you find other money or find ways to cut.' They're facing an enormous problem in the '09 budget, so there will be a temptation to find additional revenues without raising taxes."
Matt Viser can be reached at maviser@globe.com.
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