By Arizona State Senator Steve Pierce
How “Racinos” Could Save our State
This past session was one that had many interesting turns. We created the Arizona Commerce Authority, which makes the state more competitive in bringing new businesses to the state and expanding existing ones. We passed a package of tax cuts, phasing down the corporate income tax, eliminating payroll and property taxes for Arizona companies selling products out-of-state, and cutting property taxes for Arizonans. We passed the first balanced budget in five years, saved the state’s retirement system, saw demonstrations with the now infamous bullhorn, and made cuts, cuts, and more cuts.
For the third year, these cuts were significant. The Legislature’s primary mission is to pass a balanced budget, and we finally did it with no gimmicks, no new rollovers, and no new borrowing. We did what we expect everyone to do: live within our means. In the past, we have burdened the state with a great amount of debt that will take years to pay off, simply to avoid having to make these difficult but necessary cuts. This session there was no alternative–we did what needed to be done, and my caucus is content with these decisions. There is definitely still room for improvement in select areas, such as DES, and we can find these reforms with the help of the new director, Clarence Carter.
I believe we have to continue to make reforms that make the state leaner and more efficient, and this session has given us a great start. Now, we need to start looking for additional revenues.
Because the Republican caucuses in both the Senate and the House believe that raising taxes is not an option, we have to look toward new sources. So, what might those be?
First, tobacco is taxed at an enormous two dollars per pack. If voters can be swayed into passing legislation to legalize marijuana for medicinal purposes, why not find a tax that is fitting for this? If we taxed marijuana at the same rate as tobacco, we could raise as much as $4.8 million This is one place where I believe we can find some of the revenues we need to help pull Arizona out of its economic slump.
Another source of revenue we could look at is the concept of racinos, an idea that has been brought up and discussed heavily within our Legislature in the past. Never before did we want to consider the expansion of gaming in the state. However, times have changed and drastic situations call upon us to reconsider this issue. Our economy is in shambles and the state debt is catastrophic. We owe $1.1 billion on a mortgage of the Capitol, another $1 billion in education rollovers, and yet another $1 billion in the state’s deficit. How will we ever be able to rebuild our infrastructure, our parks, fund education, and keep AHCCCS alive without looking for other sources of revenue? We have to find more funding for Arizona without damaging our frail economy, and we should consider gaming as a means to do this. Recent studies show that with the implementation of racinos, we could make close to $300 million for the state’s General Fund in the first year alone, and could grow to $1 billion/year in the next few years.
Some naysayers claim that we should not permit gambling in Arizona. Clearly, they are not aware that we already allow it. For example, you can buy lottery tickets in the DES cafeteria right now. Take a drive down just about any major freeway and eventually you will see the enormous casinos on which the Indian tribes now have a monopoly. If you recall the passage of Prop 301, we limited the transparency of what we gain from casino gambling in the state, and we will not know exactly what percentage we actually receive for many years. It has been good for the tribes and will continue to be, but what many people do not realize is how good it could be for Arizona as a whole. Granting our state the right to have limited gaming would help agencies statewide, and therefore it is an option we should ponder closely.
These are extraordinary times that require extraordinary solutions. We have to look at every possible option, and racinos should be at the top of our list of considerations. They would bring innumerable jobs to the state, serving as a significant boost for Arizona’s economy. We should not dismiss the idea until we have carefully studied it first; it is a simple solution to a difficult problem.