NO TO HIGH-TECH, BUT YES TO MORE GAMBLING
In the following op-ed by Robert Steele and Tony Hwang, they note that “Expanding
gambling while making it harder for computer service and R&D-related
businesses to grow is no way to improve Connecticut’s
economy or quality of life”
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Robert Steele of
Essex was a U.S. Representative from eastern Connecticut
and is the author of “The Curse: Big-Time Gambling’s
Seduction of a Small
New England Town” (Levellers Press). State Senator Tony Hwang, R-Fairfield, is an
assistant Senate minority leader.
***************
Even the most
starry-eyed optimists have to be deeply concerned over the condition of Connecticut’s
economy. Barron’s business and financial
weekly reports that Connecticut’s finances rank 48th among the states based on
a combination of factors, including debt, unfunded liabilities, jobless rate,
gross domestic product growth, tax burden, and population trends. Only New Jersey
(49th) and Illinois
(50th) are in worse shape. Overall economic
growth for Connecticut
was 0.6 percent in 2014 versus 2.2 percent for the nation.
Despite the state’s
economic problems, legislative leaders rammed through a new two-year budget
laden with hundreds of millions of dollars in additional taxes, including
job-killing measures that would triple the tax on computer services and
significantly reduce Connecticut’s
research and development tax credit program.
Both measures would make Connecticut
less competitive in areas vital to creating well-paying jobs and building a
21st-century economy. The new
computer-related tax would hit Connecticut’s
insurance companies particularly hard, while James Baxter, Senior Vice
President of development at Boehringer Ingelheim USA,
the largest biopharmaceutical company headquartered in Connecticut, warned that the reduction in
R&D credits would hurt aerospace, defense, biotech and other industries
that depend heavily on R&D to bring new products to market.
Baxter noted that the tax
credit program has been one of the Connecticut’s most successful drivers of
economic activity, with $109.2 million of government credits spurring $3.14
billion in investments by Connecticut
businesses from 2001 to 2012. “Those
figures,” Baxter said “are astounding and demonstrate the tremendous return on
investment for the state.”
While legislative leaders
were making things tougher for many of Connecticut’s most promising industries,
they were bending over backwards to find ways to prop up the state’s faltering
casino industry, which is losing jobs and revenue as the Northeast becomes
oversaturated with casinos. They finally
pushed through a bill creating a process that could lead to the owners of
Foxwoods and Mohegan Sun opening a satellite casino along I-91 north of Hartford and eventually to additional satellite casinos
along I-95 and I-84 in Fairfield
County. In addition, they revived legislation to
allow the state lottery to install the casino game keno in restaurants, bars,
taverns and convenience stores.
Expanding gambling while
making it harder for computer service and R&D-related businesses to grow is
no way to improve Connecticut’s
economy or quality of life. The main
benefit of Foxwoods and Mohegan Sun to Connecticut’s economy came from their
success in bringing new money in from outside the state, but with out-of-state
customers increasingly disappearing, the casinos’ jobs and profits are
increasingly being funded by the gambling losses of Connecticut residents,
resulting in what Nobel Prize-winning economist Paul Samuelson called “the
sterile transfer” of money without creating any new value.
Although opening
satellite casinos would keep some portion of Connecticut
gamblers and their dollars in Connecticut,
it would do nothing to bring out-of-staters
back. Instead it would encourage Connecticut gamblers to gamble more frequently and entice
thousands of Connecticut
residents who do not currently gamble to begin doing so, with an attendant
increase in gambling addiction and the social costs it creates.
According to a recent
study from the Institute for American Values, a leading non-partisan think
tank, casinos represent a regressive tax that hits low income people,
minorities, and the elderly the hardest, thereby contributing to economic
inequality in America. Overall, the
study concludes, the new regional and local casinos drain wealth from
communities, cannibalize nearby
businesses, hurt property values, and reduce civic participation, family
stability, and other forms of social capital that are at the heart of a
successful society.
Adding up all the
economic and social pluses and minuses, economist Earl Grinols,
the country’s leading independent expert on the impact of casinos, has
concluded that the long-term cost/benefit ratio of bringing a casino into a new
community is typically greater than 3-1.
In the face of mounting
criticism, Gov. Dannel P. Malloy has proposed rolling
back some of the tax increases in the new budget that would be most damaging to
the state’s economy, including those related to computer services and
R&D. The Governor and the
legislature could take another important step toward helping Connecticut’s economy in the upcoming
Special Legislative Session by reversing
their support for expanded gambling.
More on Bob Steele….
Bob Steele is a Connecticut business
executive with a broad background in government
and politics. He served in the CIA and Congress, and was a nominee for
Governor of Connecticut.
Bob is the author of
Connecticut’s casinos and the background to his book, The Curse: Big-Time
Gambling’s Seduction of a Small
New England Town.
The book is a
fact-based novel set against the explosion of casino gambling in Connecticut during the
1990s, when two Indian tribes built the world’s two biggest casinos in the southeastern
corner of the state.
WBZ Boston’s Dan Rea
calls the book “powerful” and Connecticut author Martin Shapiro describes it as
“compelling and timely…a riveting story of history, money and politics that
will make you wonder American is headed.”
Click on the following to read what others are
saying about Bob Steele’s Book
The Curse: Big-Time Gambling's Seduction of a Small New ...