Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Committee on Economic Development and Emerging Technologies
State House, Boston
Dear Representative Wagner, Senator Spilka, and Distinguished Members of the Committee,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association would like to offer comment on the issue of expanded gaming here in the Bay State.
This is a very important issue for cities and towns for many reasons, including the potential impact on Lottery revenue that now provides almost $800 million a year to help pay for local government services and reduce reliance on the property tax.
Since fiscal 2008, aid to the municipal (non-school) side of local government has been cut by almost $500 million (32 percent), with another $65 million cut to the main municipal aid account expected for fiscal 2012. By the end of next year, Lottery proceeds will support more than 80 percent of the state’s total municipal aid program. The state tax contribution (non-Lottery) to municipal aid will have dropped from $676 million in fiscal 2008 to $161 million next year, a drop of more than 75 percent.
This makes municipal budgets very vulnerable to any reduction in Lottery revenue and highlights the need for a new stream of revenue to help support municipal services.
Many city and town officials also have concerns about the impact of major gaming facilities on local roadways and public infrastructure, public safety, and other local government services.
Through the MMA, city and town officials have been meeting with and talking to state officials for well more than a decade to evaluate and develop gaming legislation provisions. We very much appreciate the high level of interest and responsiveness that legislators have shown for municipal concerns. It is clear from last year’s legislation and the bills before the Committee for public hearing today, including House 1905 filed by Representative Kathi-Anne Reinstein and Senate 155 filed by Senator Jennifer Flanagan, that municipal concerns have been heard.
The focus of our written testimony to your Committee is on the matters that we feel must be addressed if the Commonwealth makes the decision to move forward on gaming. Municipal officials continue to meet with advocates from all perspectives on the gaming issue in an ongoing effort to offer the most helpful recommendations that represent a general municipal government position.
Impact on the Lottery
Major studies conducted on the impact of various forms of expanded gaming have shown that a material impact on Lottery revenue can be expected. The 2006 study prepared by Christiansen Capital Advisors LLC for the State Treasurer’s Office (also Chair of the Massachusetts State Lottery Commission) projected that Lottery revenue could fall by almost 4 percent per year in the first two years following the introduction of gaming machines (including slot machines). After the initial decline, revenue would start to grow again, eventually returning to pre-gaming machine levels after five years.
While this study was conducted prior to the recession that began in 2007, the underlying analysis remains solid. Cherry Sheet Lottery revenue has been the only significant source of state assistance for municipal (non-school) purposes since fiscal 1990. Any decrease would have a major negative impact on the ability of cities and towns to pay for public safety and other municipal services and would result in higher reliance on the property tax. Various bills would set aside a portion of casino/slot machine revenues to cover the loss of Lottery revenue. Both the House and Senate bills would dedicate a major share of gaming revenues to cities and towns.
The MMA supports strong language in any gaming legislation that would protect Cherry Sheet general government aid (currently $899 million) and restore aid to prior year levels through the use of new gaming revenues. Any new state revenue, including gaming revenue, should be used to help fund a permanent and sustainable municipal aid program, building on the current general municipal aid program, to help pay for police, fire and other municipal services.
Local and Regional Impact Mitigation
Cities and towns that have been named as a possible host for a gaming venue have been concerned about the infrastructure and service delivery costs associated with a major destination resort casino facility or adding gaming at an existing facility. This is also a major concern to cities and towns in the region, particularly where local roads and streets might provide access to the facility.
We ask that any gaming legislation approved by the Committee include strong provisions to identify the immediate and long-term infrastructure and local government service-delivery impacts of any casino proposal and provide adequate impact mitigation for the host community and all affected cities and towns in the area. We also ask that any expanded gaming proposal subscribe to “smart growth” principles.
Local Approval
It is also a fundamental requirement that any casino be accepted locally through an informed and transparent process. In particular, we believe that the local governing body must be fully empowered to represent the interests of its community. We strongly recommend that any gaming legislation include a clear process through which municipal officials and residents can offer comment at public hearings held locally at which a full quorum of any decision-making entity is present.
Oversight and Advisory Committees
Decisions made on gaming will have a fundamental and enduring impact on the host community and neighboring cities and towns. We recommend that any advisory committee include at least one municipal representative. We recommend that there be a separate, perhaps temporary, advisory committee established to provide guidance for siting and mitigation decisions.
Summary
Unless addressed in legislation that your Committee advances, expanded gaming in Massachusetts would bring major and potentially costly challenges to local government finances, particularly in relation to municipal revenues and service delivery obligations. Please take these challenges into account as you develop the Committee’s gaming expansion legislation.
Thank you very much for your long-standing interest in the financial security of cities and towns in Massachusetts. If you have any questions or would like additional information, please contact me or Deputy Legislative Director John Robertson at the MMA office at any time.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA