SAVANNAH — If you didn’t already think lawmakers were studying the expansion of gambling more than the preservation of the HOPE scholarship, Monday’s hearing here should have convinced you.
The location gave it away. Legislators from north Georgia didn’t trek to Savannah because it has a particular interest in HOPE’s fate. They came to Savannah because it’s deemed the second-best site for a casino in Georgia, after Atlanta.
And while committee members heard testimony about HOPE and Georgia’s public colleges during a first round of hearings in September, they spent all six hours Monday hearing from horse-racing advocates, casino executives, gambling-industry analysts, gambling opponents, and a professor who specializes in gambling research (more on him in a moment).
There were no representatives from other industries. Just one person, an opponent, spoke about other ways to reverse the trend of HOPE’s expenses rising faster than its lottery revenues. Another, Rep. Rusty Kidd, I-Milledgeville, argued for legalizing casinos but spending the money on Medicaid.
So make no mistake, the issue at hand is whether to legalize gambling at casinos, and maybe horse tracks. The notion these businesses would produce money for HOPE is best seen as a secondary concern, designed to attract support from Georgians who otherwise might be skeptical of the idea.
Although separating the two issues would be more intellectually honest, there is some merit to considering casinos expressly as salvation for HOPE. That’s because the historical record suggests they won’t be.
John Kindt, a professor at the University of Illinois, warned lawmakers that in many states casinos have turned out to be financial drains rather than spigots. While Kindt and committee members quarreled about some of his terminology and phrasing, I think I can translate: Casino gambling isn’t a reliable way to pay for big public programs.
One reason is states with casinos tend to gamble with their finances. In 2012, the latest year for which I could find comparable data, some of the states with the biggest gambling industries also had the most red ink in their budgets: Nevada (No. 1 gambling industry, No. 2 shortfall as a percentage of its state budget); New Jersey (No. 3/No. 1); Louisiana (No. 5/No. 4); New York (No. 7/No. 10); and Illinois (No. 9/No. 9).
Of the 10 states with the biggest gambling industries, nine ran budget deficits that year. Eight of them were worse than Georgia’s, which, you may recall, was considered traumatic under the Gold Dome.
Based on what I’ve heard so far about the proposal for casinos in Georgia, I’d chalk that up in part to unhealthy, and unrealistic, expectations that gambling revenues will fill a hole that lawmakers don’t want to fill by raising other taxes or cutting spending. The lottery has already proved insufficient to fund HOPE in the long run. What makes anyone think casino revenues would be different?
As state finances go, it’s a get-rich-quick scheme that ranks down there with taking this month’s rent money to the blackjack table, and trying to win enough money to pay the light bill.
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