State lawmakers exploring whether to expand gambling in Georgia met for the last time Thursday, but gave no clear indication of where they stand on efforts to legalize casinos and parimutuel betting on horse racing.
Instead, joint House and Senate committees looking into the issue may issue a fact-finding report for colleagues, essentially moving the debate to the Legislature come January without any firm recommendation.
A legislative proposal — House Bill 677 — calls for up to six "destination" casino resort licenses that would be allowed across five geographic zones in Georgia: Atlanta, Columbus, Macon, Savannah and South Georgia.
The bill would allow for two casinos in a broadly defined metro Atlanta zone, although one of them would be smaller than the other. The minimum private investment required to win a casino license: $1 billion for the primary Atlanta license and $200 million for each of the others.
The proposal calls for casinos to pay a tax rate of 12 percent. However, casino operators have already indicated they may be willing to pay as much as 20 percent in state taxes in order to operate in Georgia. An expert who testified Thursday, College of Charleston economics professor Doug Walker, pegged the national average at 25-30 percent.
There is no doubt the proposed tax rate will change, according to the bill’s author, state Rep. Ron Stephens, R-Savannah: “Somewhere between 12 and 25 percent is the right number.” Stephens also wants the geographic zones redrawn to more evenly “quarter up” the state for areas outside metro Atlanta.
But while Stephens and other boosters tout the potential economic development benefits of the proposal, a bigger issue may well be its intended beneficiaries: the state’s premier education programs, including the HOPE Scholarship and early childhood Pre-K classes.
The programs struggle financially to keep up with the demand despite record profits from the state lottery that funds them. Despite efforts to raise more money toward them — which the gambling expansion, in part, is intended to do — it will never be enough to keep up with increasing student enrollment and rising college tuition and other costs.
“There’s just no way for those lines — revenue and expenditure — to be compatible with each other,” said state Rep. Calvin Smyre, D-Columbus, the Legislature’s longest-serving member. Legalized casinos may provide more cash but the entire HOPE funding system needs a “comprehensive” review, he said.
For now, one estimate suggests at least $280 million annually in new state tax revenue from casinos. Racing advocates claim an additional $21 million or more in new tax revenue could come annually from parimutuel betting. A bill filed Thursday by state Sen. Brandon Beach, R-Alpharetta, would allow up to three racetracks and up to 15 "satellite" betting locations across the state. Beach heads the Senate's study committee on the issue.
The gambling proposals also have their critics and face opposition from Gov. Nathan Deal. Deal has told The Atlanta Journal-Constitution that the tax rate on casinos would need to be anywhere from 24 percent to 35 percent of gross revenue before he would consider changing his mind.
Any proposal passed by the Legislature would still need approval from voters in a statewide referendum.
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