Auburn report makes case for bold budget proposal from Senate

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Everyone watching knew something big was on the horizon to address the budget crisis. In fact, as soon as Monday we’re expected to see the case laid out for at least two proposals to increase revenue with no or limited tax increases.

The big plan is a significant expansion of gaming in Alabama. The question is who will make the ultimate decision?

Sources say there are two very different proposals being considered. The first is expected to come from the Senate Pro Tem Del Marsh’s office and will put the issue in the hands of the voters by way of a constitutional amendment, The second is a proposal that would require a heavy-handed move by Gov. Robert Bentley to give a sweetheart deal to the Poarch Band of Creek Indians.

When voters rejected a constitutional amendment in 1999, it was under very different political and economic circumstances. Voters today may be more open to the idea. The threats surrounding across-the-board budget cuts are being met with significant resistance, as is the governor’s plan to raise taxes.

The Senate’s proposal is a direct result of a report commissioned by  Marsh’s office by the Institute for Accountability and Government Efficiency (IAGE) at Auburn Montgomery. The report, expected to be released Monday, is titled “Assessment of Lottery and Gaming Programs Across the United States,” and looks at the costs and benefits of existing lottery and casinos in surrounding states. It uses historical evidence to estimate the potential revenue and jobs created by expanding both in Alabama.

The surrounding states covered in the report include Arkansas, Florida, Georgia, Louisiana and Tennessee.

The economic impact report is based on the premise that Class III gaming would be expanded at the four parimutual sites in the state: Birmingham, Greenetrack, Victoryland and Mobile. All would be expanded with slots and tables. The estimated number of slot machines and tables each casino would have was said to be based on second study “State of Alabama Gaming Market Assessment and Impact Study,” by Global Market Advisors LLC in 2015.

A look at the numbers in the AUM report:

  • A staggering 13,000 plus jobs will be created;
  • $331,667,963 is the expected annual revenue from a state-run lottery system, and;
  • Depending on the tax rate, the estimated revenue from expanded casinos will be with a rate of 13 percent, $63,015,148, or up to $73,863,632 with a 15 percent tax rate. That adds up to nearly $400 million in tax revenue to be collected for the general fund with the expansion of both.

The Washington Post reported on Alabama’s lottery situation a week ago saying, “Forty years ago, these losing games of chance were illegal in every state. But they have proven so lucrative and politically irresistible that 44 states have since started selling tickets to the lottery. In 2013, state-run lotteries brought in $62 billion, which amounts to $257 in sales to every adult in the nation.”

In an interview with The Associated Press in February of last year  Bentley had this to say about expanding the lottery: “That is up to the Legislature. That’s a constitutional amendment. I don’t even sign a constitutional amendment.”

He went on to say he wouldn’t fight a lottery constitutional amendment in the Legislature: “I always believe in the people’s right to vote.”

The people may get to use their right soon.

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