By Brandon Moseley
Alabama Political Reporter
The State of Alabama is facing a General Fund shortfall estimated to be over $250 million. The Alabama Constitution prevents the legislature from raising property taxes or the State income tax rate, without taking those controversial proposals to a vote of the people. There is absolutely no evidence at all that the people of Alabama would actually go to the polls to vote for confiscatory proposals on themselves. That is doubly difficult when the taxes would go to pay primarily for improving prisons and allowing the State to keep paying its growing Medicaid bills. Like former Governor Bob Riley’s doomed Amendment One in 2003, it is impossible to imagine a scenario where those proposals could possibly pass the voters and Republican legislators who raised everyone’s taxes would likely face Primary challengers in the future because of it. The legislature is understandably looking for other options and one of those “easy money” proposals that they are looking at is raising revenue by expanding legalized gambling in Alabama.
On Monday, January 12, the Chairman of the Alabama Republican Party, Bill Armistead, warned legislators in his weekly email to Republicans that expanding gambling in Alabama is not the panacea that its supporters claim and warned could do unexpected harm to the State economy.
Chairman Armistead wrote, “Politicians in Montgomery who believe an expansion of gambling is a way to collect needed funds to run state government are either uninformed or are misleading voters. They might begin doing their homework by reading an article in The Atlantic – “A Good Way to Wreck a Local Economy: Build Casinos” – written by David Frum.”
Frum wrote that, “The towns and cities that turned to gambling to escape their problems may discover that they have accepted a sucker’s bet: local economies that look worse than ever, local residents tempted into new forms of self-destructive behavior, and a dwindling flow of cash to show for it all.”
Chairman Armistead wrote, “So, why are some of our elected officials pushing an expansion of gambling as a “solution” to yet another “budget crisis”? The only winners in a state that promotes or expands gambling are the casino operators. Why would Alabama want to go down the path that has been the ruin of cities like Atlantic City?”
According to Frum, the impact of the casino does not end in the tax receipts from it. Frum wrote that Independent research has shown that casinos create social costs of $3 for every dollar they bring in.
Chairman Armistead wrote, “The Democrat Minority Leader in the Alabama House of Representatives, Craig Ford (D-Gadsden) cites a supposed “shortfall” in the state’s general fund budget as his reasoning for proposing two pro-gambling bills that he says would raise the revenue needed to increase spending, expand Medicaid and grow the size of State government.”
Armisted warned, “Like Rham Emanuel, the former Obama White House Chief of Staff, now Chicago Mayor, Craig Ford must believe: “You never want a serious crisis to go to waste.” What that really means is: Let’s create and exploit the appearance of a crisis to enact a liberal agenda that sensible people would never otherwise support.”
Chairman Armistead wrote, “One of Ford’s proposals is to negotiate a deal – called a “compact” – giving new rights to the Poarch Band of Creek Indians to offer full-blown Las Vegas style gambling at their casinos in Atmore, Wetumpka and Montgomery, in exchange for a share of the gambling revenues. Right now, those casinos only operate so-called “electronic bingo” slot machines. Under Ford’s proposal, they would add table games and card games, like Roulette, Craps and Blackjack.”
Armistead dismissed the sales pitch is that casinos create jobs and would keep more money in Alabama rather than “losing it” to neighboring states with lotteries or casinos as nothing but snake oil. “Economists know that more and bigger casinos do not actually generate net job growth or positive economic activity. In fact, as David Frum states, casinos wreck local economies,” Armistead wrote.
Armistead wrote that while casinos create low-wage casino jobs the casinos suck so much money out of the local economy that they actually cost jobs lost as surrounding businesses and restaurants close and cited the experience of Atlantic City where a third of businesses closed under within just four years of casinos being built,
Chairman Armistead wrote, “Gambling is a zero-sum game (meaning there is no economic output), the notion of ‘keeping the money in Alabama’ is pure fallacy: Whether you gamble in Alabama, Mississippi or Las Vegas, the money you lose simply goes into the pockets of the casino owners and the slot machine manufacturers. Gambling redistributes wealth in a community; it doesn’t create it.”
Armistead wrote that, “The Legislature should not sabotage the Attorney General’s efforts by cutting a deal with the Poarch Creeks before the court rules. Alabamians, not the federal government, should decide the gambling laws in Alabama.”
Armistead said that, “A compact to expand Indian gambling would require a constitutional amendment. Even if it passes the Legislature, which is anything but assured, it likely wouldn’t go to a vote of the people before the 2016 general election. Therefore, Ford’s bill couldn’t possibly ‘solve’ a budget crisis anytime soon…The last thing we need in the Legislature is another fight with gambling interests that takes up time that could be spent on coming up with ‘real’ solutions to the budget issues. If the casino ‘can of worms’ is opened up, you can bet the halls of the State House will be swarming with more casino lobbyists than you can shake a stick at. It would also invite bribes and corruption of the kind the FBI investigated a few years ago.”
Alabama certainly has ethics issues in Montgomery.
The popular Chairman of the Republican Party will step down next month and a new Chairman will be selected by the Alabama Republican Executive Committee.