RSSOh….wait! You actually thought helping cities and towns was a priority? The incredible story of Connecticut and its casino revenue.
Jan 27
State Budget Budget, Slots Revenue Comments Off
Or “We are from the (State) Government and we are here to help”;
In the fall of 1992, discussions between Governor Lowell Weicker and Pequot Tribal Chairman Skip Hayward led to a landmark agreement in which the Pequot Tribe would share 25% of its annual slots revenue with the state of Connecticut in return for the exclusive rights to have slots within Connecticut’s borders.
The agreement, which was expanded to include the Mohegan Tribe when it opened the Mohegan Sun, was the most generous revenue sharing agreement in the country. For Weicker the deal was especially beneficial since it provided the state with a major new revenue stream and gave him a new and effective weapon in his on-going effort to stop other casino operators from coming to Connecticut.
Having been in and around those negotiations and discussions, I can attest to the fact that political players recognized that the “icing on the cake” was that the new funds would be distributed to Connecticut’s hard-pressed cities and towns to help support local services and provide property tax relief for Connecticut’s overburdened middle-income families.
Initially ALL OF THE MONEY was to be used for municipal aid, but even as the program was introduced the state needed to skim off about $30 million or so to help balance the FY1994 budget. That said, Connecticut’s elected officials proclaimed that a new day had arrived, that they were (in fact) serious about property tax relief and from that day forward 85% of the slots revenue would be passed on to the municipalities via the newly created Pequot Slots Fund.
Since then, the Pequot and Mohegan tribes have more than fulfilled the state’s wildest dreams and transferred more than $5.3 billion to the state’s general fund.
However, each year, as slot revenues grew, Connecticut Governors and legislators determined that it was necessary to keep more and more of the incoming revenue at the state level rather than pass it along as promised. The unspoken rationale was that since the state needed additional revenue to pay for existing and expanded programs it was better to utilize the slot funds rather than increase taxes – even if the net impact was that local property taxes would need to go up even more sharply.
Whereas 85% of the slot funds were passed on to the cities and towns in 1994, that percentage has tumbled year after year after year.
This year, the budget approved by the Democratic legislature and allowed to go into law by Rell allocates a paltry $61 million of the tribal slots revenue to Connecticut’s cities (An amount that equates to 16% of this year’s slot revenues).
So when politicians (of both political parties) talk about their deep commitment to municipal aid and reducing the pressure on local property tax payers, it would behoove everyone to remember that of the $5 billion that has come in via the Pequot/Mohegan Fund over the past 18 years, less than $1.5 billion actually made it to the promised destination – Connecticut’s cities and towns.
The story will remind the old timers among us of Ella Grasso’s famous promise that the Lottery revenue would go for education.
Or in other words – never forget that old adage – “Fool me once, shame on you; fool me twice, shame on me”.
But no really, providing sufficient municipal aid will be a TOP priority for Connecticut State Government. I know because I heard them say it would be.
