By TERRY STONE
Minnesota government is working fairly well at the moment. A tiny amount of restraint (imposed by the GOP-led legislature) and the beginning of a long-overdue economic recovery have turned a $5.2 billion projected budget deficit into a $1.2 billion surplus. The surplus has been used to restore the depleted state capital reserve fund and to speed up state aid to schools payments. School payments had been delayed in a hokey budget compromise with the governor — as they have 18 times in the past. For schools, it was a little like getting your Social Security check a few days late — annoying but generally survivable.
We can be proud of our state. The voters got it right in 2010. The voters always get it right — except when they don’t. With elections coming in November, there is a risk that voters will forget how we ended up with a massive deficit in the first place, i.e., spending and endless revenue schemes to pay for it. The result is that Minnesota currently charges us 37 taxes and endless fees.
One nasty tax that is too often overlooked is the giant cut the state takes out of its various gambling scams. Gambling (and a little incremental expansion of gambling) is low hanging fruit. As stealth taxes go, gambling is among the more insidious because it’s regressive; very regressive. A regressive tax is one that disproportionately impacts low income citizens more than other Minnesotans. If a low income person puts $100 into a slot machine at a race track, that likely means $100 less in the kids’ college fund. A higher income gambler is more likely to be able to afford both a $100 loss at the slots and still maintain a college fund. In both examples, the state takes the same cut.
Last year a failed racino proposal was hatched to fuel an economic development fund. This year racino is either an engine of urban renewal or a way for government to subsidize wealthy NFL owners. Thirty-nine states are dealing with gambling legislation and nine states are dealing with racino ideas. Racino tax proposals are usually marketed to the public as dedicated funding arrangements. Dedicated funding is bad political science; it usually means government on autopilot for a decade or two — regardless of where the state’s spending needs actually lie.
The electronic pull-tab proposal that is currently part of public tax dollar funding for the Vikings is a particularly cruel trick. Pull-tab revenue has been decreasing precipitously in the past few years. There is a plan to present the electronic pull-tab machines in the form of familiar video games so they will be more attractive to young gamblers.
Perhaps worse yet, gambling expansion into pull-tabs was sold to us as an exclusive niche of charitable gambling. The revenue has provided millions of dollars for school supplies, to buy community medical equipment or local public safety equipment. Now, the Vikings bill purports to compete with the very local charities used to legalize charitable gambling in the first place.
Minnesota does not need an additional revenue stream. A recovering economy and a little continued fiscal restraint will serve us well. Let’s not gamble with tax increases; particularly the most regressive stealth taxes.
Stone, of International Falls, is a member of the Citizens Against Gambling Expansion Steering Committee.
