When Governor Schwarzenegger unveiled his proposed state budget earlier this month, it caused quite a stir. Instead of shrinking, the state deficit had increased to $14.5 billion, and it may end up higher than that by the June budget deadline. The state now faces a genuine fiscal emergency, and, like a broken record, many of my Democrat colleagues are calling for new taxes and fees to balance the books. I believe taxpayers are already doing their part with revenues up almost seven percent this year, but there is clearly a stark imbalance between spending and revenues.
The state’s chronic budget problems are beginning to add up. This year the state must scramble to simply meet its cash flow needs, as lenders downgrade our debt and demand a budget in better financial shape. However, things are not going to get better until we can reduce the gap between spending and revenues.
One way to do this, without raising taxes, is for voters to support Propositions 94, 95, 96 and 97. These propositions would approve four Indian gaming compacts that were passed last year by the legislature and will provide the state with close to $400 million in desperately needed revenue this year.
The compacts passed the legislature with amazingly strong bipartisan support, including votes from the Assembly Democrat Speaker, the Senate Democrat Pro Tem and both Republican leaders. With Governor Schwarzenegger, that combination is about as strong a bipartisan endorsement as it gets in Sacramento.
The four Riverside and San Diego tribes impacted by the referendum already have existing compacts and successful casinos. What they don’t have is the ability to expand to meet existing market demand. That is what the tribes receive under the compacts: a higher cap on the number of slot machines they are allowed to operate.
In exchange for this greater economic opportunity, the compacts require the tribes to significantly increase the amount of money given to the state’s general fund. This money, hundreds of millions of dollars this year, $9 billion over the life of the compact, will directly offset cuts to teachers, police officers, health care, and our prisons. At the same time, it will help bring our state budget into balance and reduce the pressure on taxpayers. It really is as simple a trade-off as that.
There are other benefits as well though. Propositions 94 through 97 require the four tribes to give a larger amount of their profits to local governments to mitigate for the impact of tribal gaming. Each year, millions of dollars will flow to local police, fire fighters, and emergency service personnel. The compacts also require the tribes to share more of their casino revenue with the poorer Indian tribes that are either unable or choose not to pursue the benefits of gaming.
Finally, the compacts will have a specific, economic benefit to our state’s economy. Indian gaming employs nearly 56,000 Californians with another three times as many people employed by local businesses that cater to the casino industry. In many counties, tribes are among the largest private employers, helping to reduce poverty through economic opportunity. In my county of Riverside, more than 10,000 people are employed by tribal gaming operations, generating tens of millions of dollars in state income and payroll taxes.
Voting for Propositions 94 through 97 will mean additional jobs for Californians and an improved economy. The state’s budget will also clearly benefit from the increased revenues.
I was involved closely in shepherding these four compacts through the legislative process. They are a fair deal for California, and they are a boon for taxpayers. I hope you can join me, the California Republican Party and the California Republican Assembly in our strong support these important initiatives.
January 23rd, 2008 at 12:00 am
Senator Battin:
Why would I want to give the state legislature more money to waste?
Why would I want to give the state legislature the power to create more socialism and big government programs that will undoubtedly be met with automatic annual increases and lead to more debt and howls for more money?
The fiscally conservative thing to do is to starve government…not allow it to “effe” up everything and then give it more money to piss away.
January 24th, 2008 at 12:00 am
During the budget debate last fall the Republican leadership rightly stated that our
Sacramento legislature does not have a revenue problem, it has a spending problem. Now we are being told that we need to place more money into the State’s General Fund because of the $14 plus billion-dollar deficit. The best way to get the legislative beast to stop the drunken sailor-spending spree is to starve the beast, not feed it more money! This is what happened between 2003 and today. The state enjoyed record revenues but the legislature went on a spending spree . Now that revenues are down, its time to cut back on spending. Giving a spendthrift child money to pay off his credit cards only encourages him to spend more money!
One of the arguments made by the compacts proponents is that this money is needed to pay for vital services like fire and police protection. But the money is only earmarked for the state’s general fund. So now we are supposed to believe that our state legislature will “see the light” and only spend the gambling revenues on police and fire fighting services. Pardon me but given the track record of the state legislature in the last few years, that “promise” is one I chose not to believe.
It has been argued that this gambling money is “free” as it is not a raise in our taxes.
Gambling money taxes are not “free” on many levels. Most importantly the state is making money on a proven social ill. There are many, many studies that prove that legalized gambling produces higher rates of addicted gamblers, many of whom become involved in criminal activity to support their habit (see http://www.ncjrs.gov/pdffiles1/nij/203197.pdf) and neglect their families (see generally http://www.ncpgambling.org/ and http://www.citizenlink.org/fosi/gambling/cog/A000001154.cfm).
These four compacts only serve to promote more gambling, which will naturally result in more gambling addition and the natural by products of that addition. I cannot think of a better example of bad public policy – our state government promoting something that is proven to hurt Californians and their families.
Also, as Dan Baren of the Lincoln Club well stated in his article of today, when these compacts were sold to the voters in 2000 it was to be a limited amount of gambling in remote areas. These four compacts prove that those 2000 campaign promises are being broken.
Senator Batten makes the argument that the casinos employ many people in his district who pay taxes and support the local economy. True but it would be far better for those same casino employees to have jobs in businesses that produce positive benefits in his local economy like manufacturing, sales, distribution of products, shipping, and the many, many small businesses that spring up around these types of business concerns. All of these types of business concerns are now being encouraged to leave the state due to its higher taxes, minimum wage laws and regulations (like the new greenhouse gas regulations) that the Republicans in the legislature rightly fought against.
In my opinion, the consistent approach to these compacts is to reject them as a message to Sacramento that it needs to stop the spending. Also to reject gambling revenues as that is not free money but will have a price tag in broken families, increased crime and increased bankruptcies that is far higher than the money the state will make from this “sin tax.”
I am voting NO on 94, 95, 96 & 97.