Patrick Previews Casino Hearing

For the first time since proposing three resort casinos for Massachusetts back in October, Governor Deval Patrick today will publicly try to sell lawmakers on his plan.

Patrick and others will testify at a state house hearing organized by gambling supporters in the legislature. Governor Patrick joins us now by telephone for a preview of how he'll try to convince skeptical lawmakers.

Governor, good morning, and thank you very much for speaking with us.

GOVERNOR DEVAL PATRICK: Good morning Bob, thank you for having me.

BOB OAKES: Governor, let me serve up a softball first, which may be the only softball you get today. What are the major selling points for casinos that you'll make at todays hearing?

PATRICK: Well, it's primarily a job creation initiative, and taken together with the life sciences plan and the broadband plan initiative and other long term investments in education and bridges, road, and public transportation and so forth, we can create a stronger economy and when we do, a stronger revenue stream. In this case, we're talking about a couple billion dollars of new economic activity, 20,000 permanent jobs at good wages in the $45,000 to $50,000 average wage category with benefits, and some 30,000 construction jobs, dispersed in different regions around the state to take advantage of the differences in the tourist industry around the state. It's a serious proposal, and we expect it to be taken seriously by the legislature.

OAKES: Let me ask you a question about your revenue projections. The Massachusetts Tax Payers Foundation says there's no firm basis for your revenue projections and that they're unrealistic. How did you calculate the projected revenue?

PATRICK: Well, we based it on actual experience, not the hypotheticals, as the MTF is working off of, but the actual experiences of facilities in Connecticut and elsewhere. Judging from the number of developers around the world who have expressed interest in this proposal, I think we are on very solid ground. We were conservative on purpose because we did not want to over-promise and under-deliver, and the indications are that there's even greater upside.

OAKES: Connecticut and Rhode Island and other New England state are talking about expanding what they have to offer for gambling in the same time frame that you're talking about bringing casinos to Massachusetts. How would additional casinos across the borders dilute revenue and job projections. I mean, how much money is there out there to be made?

PATRICK: There's some studies that indicate that there's somewhere between $1.5 and $2 billion of unmet gaming demand, I think is the way the phrase goes, in New England, and that Massachusetts is by far the highest potential location in this region for further gaming. But this is the nature of competition. Frankly, the longer we wait to put our stake down, to show that Massachusetts can be a destination for world-class resorts, a real destination for tourists, the longer we wait, the more we're going to be doing catch up. So we've got a serious proposal, as I said, I think today is the first time it's going to be taken seriously by the legislature and we're looking forward to that hearing.

OAKES: Address the argument that casinos are no better a source of revenue than perhaps a 0.5% increase in the state sales tax that would generate roughly the same amount of money without all the problems that gambling brings.

PATRICK: Well, a 0.5% increase in the sales tax doesn't produce 20,000 jobs. I'm not saying that a sales tax increase is evil, or anything like that. This is not first and foremost a revenue measure. This is first and foremost a job creation measure, and it does have social costs, no doubt about it. In some respects, we're dealing with those social costs already here in Massachusetts. Massachusetts residents spend almost a billion dollars in Connecticut casinos today, one in four Massachusetts residents say they make an annual visit to Mohegan Sun and Fox Woods, and they bring all those issues home. And today we are not, in my view, funding the programs to respond to any of those social issues as adequately as we should. With the proposals we put on the table, we'd spend four times the amount of any other jurisdiction that has legalized gambling. I hear that argument about other ways of developing revenue, but until those other ways of developing revenue have the additional advantage of creating jobs, then they're not just really a realistic comparison.

OAKES: If we're going to have casinos, and that's not certain at this moment, because we don't know how the legislature's going to vote, but if we're going to have casinos, why not let the state run them and keep all the proceeds, like we do with the state lottery, instead of having the huge portion, the majority of the casino money, end up in the hands of wealthy investors?

PATRICK: Let me put it this way. You have to invest continuously in the quality of these facilities to make them produce the kind of return that the investments warrant. If I were convinced that the state could do that as well as private industries, then I might have proposed that. But I think that private industry is the right way to approach this. If others have a different view, than we ought to have that debate.

OAKES: Are you confident enough that you're going to win approval from the legislature for casinos, that you're going to include casino revenues in your next state budget?

PATRICK: Well, nothing's done until it's done. But we've got significant structural budget challenges coming up in the coming year. I don't think that the way to address them is by continuously reaching into the rainy day fund as the legislature has done the last few years, so I think that we have to be looking at alternative revenue sources.

OAKES: So will casino revenues be in your state budget or not?

PATRICK: Everything's on the table, Bob. Let me submit my state budget when it's time to submit my state budget.

OAKES: Talk about the timing of your appearance today. Critics say you proposed casinos months ago, you've been largely silent, no full court press, we know the legislature is very reluctant, we know there are vocal critics of this plan in the legislature, and now today you're out publicly going to testify. Is this plan in trouble, is that why you're going to Beacon Hill today? Is that why you're going to this hearing today?

PATRICK: It's a funny critique because if we propose too much, then the legislature complains that we're overwhelming them with ideas, and we ought to pick one and concentrate on that. If we back off and focus on other things that we're trying to get done, like the Life Sciences bill, then we're criticized for not focusing on the casino proposal. This is the first opportunity when the legislature has invited us, has frankly offered a hearing where we have the opportunity to present our proposal, the very first one. And I'm showing up at the very first one. As I said, this is a serious proposal, I expect it to be taken very seriously by the legislature, it deserves that, and I think today is the very first opportunity for that.

OAKES: Governor Patrick, thank you very much for joining us this morning.

PATRICK: Thanks a lot Bob, you take care.