The casinos bill had its first hearing before a Senate committee this past week, and so far the discussion has little to do with whether it’s a good idea to open Georgia’s doors to an industry that would suck money out of residents’ pockets . It has much more to do with how to divvy up the state’s meager share of the loot.
(Before I go on, let’s note the utter shamelessness of the terms the gambling industry demands for gracing us with its presence. Usually, a state will either grant casinos a limited amount of competition or a low tax rate. Senate Bill 79 gives them both.)
AP Photo / Wayne Parry
AP Photo / Wayne Parry
Under the bill, the state would get 20 percent of casinos’ gambling revenues. But that 20 percent cut would then be sliced and diced into various state programs, three of them as of now. That stands to grow as reluctant (or savvy) legislators withhold support for the bill until their pet cause is dealt in.
For example, there was a call during Thursday’s committee hearing to bump up the amount devoted to health care to 30 percent from 20 percent, and then split that between trauma care and rural hospitals. Expect more jockeying over the amount devoted to the HOPE scholarship vs. a new, need-based college scholarship.
Absent in all this talk of money for this and money for that is exactly how much money we’re talking about, and whether it would solve the problems under discussion.
The independent study completed last month for Central Atlanta Progress, downtown’s business boosters, indicates the state’s take from two casinos could be upward of $320 million a year. That’s close to what casino backers suggest as well.
Consider what that would, or wouldn’t, mean for HOPE. Six years ago, lawmakers addressed a looming deficit in the program by changing it to cover only 90 percent of tuition costs. The deficit then was north of $200 million. Lottery revenues have since rebounded, but tuition has also gone up. HOPE now covers between 70 and 88 percent of tuition, depending on the college.
Exact figures for how much HOPE would need to get back to 100 percent are elusive. But based on that 70-88 percent range, we can estimate it’d be between $60 million and $180 million.
The latest version of SB 79 calls for half of that $320 million in new state revenues to go to HOPE. Let’s assume further tinkering doesn’t lower that proportion — and, less solidly, that the revenue projections actually pan out. If so, we could expect casino revenues to fall somewhere between comfortably covering the gap and still falling short of 100 percent.
But that’s just in Year 1. After a few years of student-enrollment growth and/or tuition increases, we’d be right back where we were in 2011 when HOPE was cut.
The actual numbers may vary a bit, but it’s clear a few hundred million dollars won’t slow, much less reverse, the long-term trend of rising college costs. They will either be a short-term palliative or a first step toward another expansion of gambling down the road as another quick fix.
It would be braver and more helpful of legislators to have the more difficult debate about whether HOPE can really recapture its glory days of being everything to everyone. Then they might have a more sober discussion about whether casinos really make sense for our state.