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Wednesday, September 28, 2011
The following memo was sent to each senator and representative in the Legislature, as well as to the media statewide.

Debate on The Casino Bill

Citizens for Limited Taxation has not become involved in the casino gaming issue. We would normally support any legitimate business operating (without undue government involvement) in Massachusetts, but that is not the definition of this particular business. Over the years we have become convinced by the arguments of (former) Senator Sue Tucker that casinos and slots are going to create more problems in Massachusetts than they are worth, and will eventually cost us all more than they bring in with new revenues.

But since this suspicion will be proven only over time, we do not take a position on increased gambling here. We comment now to thank the House and six Senators who want to include new gaming revenues in the definition of taxes for the purpose of honoring the 2000 ballot vote to roll back the state income tax rate.

We appreciate the arguments that after 11 years, the will of the voters should be respected – and then we’d add that in fact it has been 22 years since we were promised that the 1989 income tax rate increase would be “temporary.”

We hope the House language on new gambling revenues will prevail in conference committee, so that this money will be counted toward the formula that finally begins lowering the income tax rate to its traditional 5%, as promised.

More information on today's Senate debate
not included with the memo

State House News Service

CONVENES: The Senate convened at 1:23 p.m., Sen. Murray presiding. The Pledge of Allegiance was recited.

[ . . . ]

TARR AMENDMENT 34 – BUDGET REVENUES: Sen. Tarr offered an amendment.

Sen. Tarr said, We have the regular budget, which is appropriate by the Legislature. It appears we are creating a shadow budget for gaming. We’re creating so many silos it appears we’re making ourselves into more of an agricultural state that we already are. By treating that revenue as something other than what it is, there are also budgetary consequences. This says that all of the money from gaming be treated as budgeted revenue. The most direct impact is whether the citizens get tax relief. We shouldn’t claim that this is going to be a panacea. Madam President, I think the gentleman has suggested the reduction would be a modest reduction. We are suggesting that one form of revenue for the commonwealth should be off the table for those calculations.

Sen. Tarr asked that a vote on the amendment be taken by a call of the yeas and nays. There was support.

Sen. Brewer said, The gentleman would like to make it so all the gross lottery revenues be counted as tax revenue so it could trigger an income tax reduction. We are tracking toward a commitment that we will be able to further the reduction. Barring any unforeseen global turmoil – in Greece they’re going to increase property taxes and they’re going to assess it through their electric bill. They’re looking at a $600 billion bailout. The global economic uncertainty requires us to be prudent. We are on track for a reduction. We are also on track for an increase in local aid money to the tune of $65 million. This bill has carve-outs, but it doesn’t have a dollar figure. The carve-outs are on a percentage basis. We are heading in the direction that the minority leader wants. I don’t believe that this is a shadow budget. I believe that those carve-outs have been well-thought-out. I do hope the amendment is not adopted. I hope the members vote no.

Sen. Candaras said, This amendment would require gaming revenue to be counted as state tax revenue as revenue under Chapter 62 in the General Laws, which governs the individual income tax. The majority of revenues are taxes, they are not individual taxes for the purpose of Chapter 62. Section 57 of the proposed Chapter 23K says unequivocally that the gaming commission should operate independently. This amendment would confuse one very important question, and that is, should these revenues be counted toward a reduction in the income tax rate. We are confident that our colleagues in the minority party. What counts under Chapter 62 to change the income tax rate is baseline tax revenue. Casino revenues are – any casinos revenues that evolve from this action could be beyond the purview of that chapter.

Sen. Hedlund said, I think that what’s important is, we talked about transparency earlier. My colleague is right. This is a shadow budget. Folks at home aren’t interested in hearing the nuances we just heard. I hope that this amendment is adopted. I think that by continuing to send out diversions or preventing us from getting the triggers adds to that cynicism.

Sen. Knapik said, It’s a pleasure to speak with you all today. I think this amendment ought to pass for the simple reason – we’re creating a systemic change in the revenues collected by the commonwealth of Massachusetts on the order of several hundred million dollars. The gentleman’s amendment simply seeks to capture those resources. I know much has been said and a little bit of crowing going on. My lord, Madam President, it only took us a decade, a decade – hello – I think it’s going to take us a half a century to get it down to the voter-passed 5 percent. This systemic source of new revenues ought to be in the category of revenues collected by the commonwealth. What it does is, it shows you how we slice and dice – a slice-o-matic – of where the money goes. For the purposes of this amendment, I have to wonder and posit for the membership, do our constituents want most of the money spent no matter how worthy and worthwhile it is? I know we are putting some of it in the silo of the stabilization fund. The reality is, it’s taken us 10 years to get to the first down payment of the rollback. We’re going to be generating hundreds and hundreds of millions of dollars. We’re going to have a devil of a time trying to see if the triggers can come into play. Why wouldn’t we pass this and treat these gaming revenues – we do need the decoder ring to figure out where the gaming revenue comes from. It kind of looks like the family tree of the gentleman from Barre. That’s how complicated we’ve sort of made this gyration. It treats the revenue much as we treat other categories of revenues. It took 10 years to get to that first down payment. Will it really take another half century to get it down to that 5 percent historic level?

Sen. Tarr said, I just want to make a couple quick points. This is such a radical idea that the House adopted it. This answers the question about how the revenue is treated on a going-forward basis. I want to congratulate the lady from Springfield, who almost qualifies as an illusionist. We’ve spent the last couple of years trying to rein some agencies in. Now a very simple concept has been elevated. It’s in more limbo than when the explanation started. The House did this. It merely says that for the purposes of what this is, the revenue will be treated like revenue under Chapter 62. I know the lady understands this. She is one of the preeminent scholars in this chamber. If she wasn’t, she wouldn’t have been able to create this shroud of mystery. The House agrees with us. This is something we should do to say out of the gate that this is revenue of the commonwealth and it won’t become part of a shadow budget. Here, we’re using a source of revenue and using it to fund things in an alternative way. We want to say that it’s budgeted revenue of the commonwealth.


[ . . . ]

ADJOURNS: The Senate adjourned at 4:53 p.m. to return Thursday at 11 a.m. in an informal session.

DISCLAIMER: The News Service coverage of legislative debate is an accurate summary of remarks, not a verbatim transcript.

Voting Yea in support of taxpayers:

Sen. Bruce Tarr (R-Gloucester)

Sen. Michael Knapik (R-Westfield)

Sen. Richard Ross (R-Wrentham)

Sen. Robert Hedlund (R-Weymouth)

Sen. Steven Baddour (D-Methuen)

Sen. James Timilty (D-Walpole)

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Citizens for Limited Taxation    PO Box 1147    Marblehead, MA 01945    508-915-3665