After decades of debate, the Massachusetts Legislature passed and Gov. Deval Patrick signed legislation providing for casino gambling in the Bay State. The law creates the Massachusetts Gaming Commission to regulate casino gambling and authorizes three licenses for a resort casino in three regions of the state: Eastern Massachusetts between Boston and Worcester, Western Massachusetts which encompasses Hampden, Hampshire, Franklin and Berkshire counties; and Southeastern Massachusetts which includes the South Shore, Fall River, New Bedford and Cape Cod. Additionally, the legislation allows a slots-only casino, which will not be restricted to any one location.
Successful bidders for the resort casinos will pay an $85 million licensing fee and must also pledge to make a capital investment of $500 million in their facilities. The successful bidder on the slots-only casino will pay a $25 million licensing fee and pledge to invest $125 million in a facility. Each casino will pay a 25% tax on revenue to the Commonwealth. The slots-only casino will pay a 49% tax on revenue. All casinos would be subject to a local referendum.
Decisions on locations, the awarding of licenses will be delayed until the commission members are chosen. A total of five commissioners will be selected. The governor, the attorney general and the treasurer will each appoint one member, and the governor, AG and treasurer will jointly select two members. According to state Sen. Stephen Brewer, a slots-only casino may be a reality in two years, while the resort casinos are more likely to be four years away. Proponents say the casinos will create thousands of new jobs and millions of dollars in revenue. Opponents vow to fight on and raise the possibility of a statewide referendum.
House Speaker Robert DeLeo noted that the law will provide more money for education, especially community colleges. “This is much, much more than just a straight expanded gaming piece of legislation,” DeLeo added.
Once casinos open, public higher education may garner approximately $20 million in annual revenue. The casinos are estimated to generate between $300 million and $600 million in revenue to the state, with 25% going to local aid, 14% for elementary and secondary education, 10% for economic development and 5% for public higher education where the money would be used to supplement budgets, not replace appropriations. Public higher education was initially left out of the equation, but lawmakers including Rep. Ellen Story (D-Amherst), Sen. Michael Moore (D-Millbury) and Rep. Thomas Sannicandro (D-Ashland) joined forces with PHENOM (Public Higher Education Network of Massachusetts) in lobbying legislative leaders and the governor to include public higher education in the distribution of gaming revenue.
Nearby states are assessing the impact of the Massachusetts law. Connecticut’s two casinos—Foxwoods and the Mohegan Sun—paid more than $342.3 million in slots revenue to the state. This was down 2% from the prior year and coincided with expanded gaming in New York and elsewhere as well as a weak economy. Rhode Island will do an economic impact study to assess how its casinos, Twin River and Newport Grand, will be affected by competition from Massachusetts. Rhode Island currently receives more than $300 million annually from the two casinos. In New Hampshire, state Sen. Lou D’Allesandro has been a leading proponent of expanding gambling in the Granite state. With the landscape now altered in neighboring Massachusetts, D’Allesandro’s colleague, Sen. Chuck Morse who chairs the Senate Finance Committee, is urging the state to move quickly to support two casinos. Past efforts have failed and Gov. John Lynch is strongly opposed to expanding gambling. Maine has two casinos, and voters recently rejected proposals to increase the number to five. Despite local support, proposals to locate a casino in Lewiston and two racinos with slot machines in Southern and Eastern Maine were rejected by voters.
Other reforms
Massachusetts approved a pension reform bill—the third approved in the past three years—and the governors signed it into law. The reform bill is purported to save $5 billion over 30 years by raising the retirement age for new retirees from 55 to 60. Most workers will be required to stay in the system until age 67, when they will reach a full pension. The law is scheduled to take effect in January 2012.
State legislators redrew the lines of congressional districts to reflect population shifts in the federal census of 2010. Massachusetts lost a seat after the federal census, and the new map now has nine districts instead of 10. The plan creates a new 7th District where the majority of voters are blacks, Latinos and Asian-Americans. U.S. Rep. Michael Capuano of Somerville currently represents this district. The plan also includes a new southeastern Massachusetts district that encompasses Cape Cod, Plymouth and New Bedford. Currently, no member of the Massachusetts delegation lives in the newly created 9th District, but U.S. Rep. William Keating is expected to be a candidate for this seat. U.S. Rep. John Olver, has served the 1st Congressional District for more than 20 years, announced he would not seek re-election. He is 75 years old. His district will be absorbed by other congressional districts. For example, Amherst and North Hampton will now become part of the 2nd District represented by U.S. Rep. James McGovern. U.S. Rep. Barney Frank, age 71, who represents the 4th Congressional District, announced he will retire having served 16 terms in Congress. Frank said he was not happy about changes made to his district.
Massachusetts joins three other states in passing legislation to protect transgender people from discrimination in education, employment, housing and credit. Additional provisions of the bill include additional civil rights and protection from hate crimes. The other states that have taken steps to protect transgender people from discrimination are Connecticut, Hawaii and Nevada.
RI reforms pensions
Rhode Island lawmakers convened a special session to address the state’s pension fund, which is $7 billion in the red. The final bill signed by the governor eliminates automatic annual increases for retirees for five years. After that. increases will be based on the performance of the pension fund. The retirement age will also be raised.
Gov. Lincoln Chafee, state Treasurer Gina Raimondo, the chief architect of the bill, House Speaker Gordon Fox and Senate President Teresa Paiva Weed joined forces to pass a bill while union leaders vowed to challenge the law in the courts.
Carolyn Morwick is a consultant at NEBHE and former director of the Caucus of New England State Legislatures.
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