Why is the General Assembly so hell-bent on allowing casinos, other than the fact that they have powerful lobbyists who have made lots of campaign contributions to both Democrats and Republicans?
OK, we answered that.
So let’s ask another question: Why are some localities so eager to get a casino?
The answer to that seems pretty obvious, too: They’re desperate for the tax revenue. That’s understandable. The five cities that want permission to host casinos — Bristol, Danville, Richmond, Norfolk and Portsmouth — could all use the money.
We pause now for our obligatory Cato moment: The Roman Senator Cato the Elder was such a fierce opponent of the rival city of Carthage that he ended his speeches, no matter what the topic, by declaring “Carthage must be destroyed.” In that same spirit of persistence, we feel compelled to point out some inconvenient facts. Richmond and Norfolk have some of the oldest schools in the state —schools that in some cases have literally had pieces of the ceiling crumble. In that respect, those two cities have much in common with some of the state’s rural areas, which also has many old schools that the financially stressed localities can’t afford to replace. The Democratic General Assembly this year voted down three measures that would fix those problems — a constitutional amendment to guarantee “equal educational opportunities” to all students, an advisory referendum on a state bond issue to pay for school construction, and restoration of a fund for construction grants. The Republicans didn’t address those problems when they ran the legislature. Now Democrats have decided they won’t rush to fix them, either. But, by golly, instead of better schools we might get some casinos instead. Like Cato, we intend to keep making this point until somebody in Richmond is shamed into action.
Now back to our main point: These localities shouldn’t be so excited about casinos. Yes, they will create some jobs. And yes, they will create some tax revenues. And yes, some of these localities are so desperate they’ll take whatever revenues they can get. Who can blame them? But none of them should fall victim to what Alan Greenspan once called “irrational exuberance.” In Southwest Virginia, there’s a squabble over whether a casino should be in Bristol or in neighboring Washington County — two different developers, except that the one in Bristol is better funded and better connected politically. Steve Johnson, the developer behind the Washington County proposal, is unhappy that the bill moving through the General Assembly designates Bristol and not Washington County as a site eligible to hold a referendum for a casino. He told the Bristol Herald-Courier: “When you look at Bristol casino political giving, there has been over $1.3 million given to politicians across the state of Virginia, including the local legislators. I think it reeks of cronyism. I think it sends the signal of Virginia being a coin-operated government, and this could cost Southwest Virginia a project that can transform it for decades and decades.”
Johnson is right about one part. On many non-ideological issues, Virginia does have a “coin-operated government.” That’s true regardless of which party is in power. However, when he says that a casino is “a project that can transform” the region, that’s just laughable. It’s also wrong and everyone should understand why it’s wrong.
If localities want casinos because they think they’re fun, and will bring in some tax revenues, that’s fine. But casinos are not going to “transform” anybody’s local economy, at least not in the way that some of these localities need their economies transformed. The first evidence for that is every place in the country that has casinos other than Las Vegas. That city stands as the singular exception: Casinos really did transform a patch of Nevada desert into a city of some significance — a global tourist attraction that is now starting to grow a tech community of entrepreneurs priced out of California. It’s also taken a half-century or so. There are 23 other states that allow casinos — and 248 such operations outside Nevada. But have they really helped any other community create a new economy? The answer to that depends, of course, how on you define “a new economy.” If by a tourist attraction with some hotels and restaurants, sure — that would be a new economy for some places. But is that really all Bristol or Washington County should aspire to? Is that really how they want to fit into a 21st century economy?
Last year the General Assembly’s research arm, the Joint Legislative Audit and Review Commission, studied casinos. The sober-minded auditors at JLARC weren’t nearly as enthusiastic about casinos as politicians and developers are. JLARC found that casinos would likely employ 1,067 people in Bristol and 1,582 in Danville. A company that brings that many jobs to either place would be a big deal, indeed — especially in Danville, where JLARC said a casino would constitute 3% of the civilian workforce as compared to 1% in Bristol and 0.3% in Norfolk and Portsmouth. JLARC called that “meaningful.” But then came the caveat: The projected median wage of $33,086 for casino employees would be below the median wage in all five communities.
That does not sound “transformational,” at least not in a good way. In effect, the General Assembly is being asked to enable the lowering of median wages in five communities — including two that already have relatively low median wages — $35,400 in Danville and $37,400 in Bristol. (Richmond comes in on the high end at $43,900). This runs directly counter to other policies the legislature has enacted.
The whole point of the GO Virginia economic development program is to create jobs that raise the median wage. The Democratic majority in the legislature is also keen on raising the state’s median wage. So why, then, would the General Assembly vote to allow a community’s median wages to be lowered? These two things seem directly at odds with each other. Proponents are basically saying that it’s OK to lower the community’s median wage if it puts more money in government coffers — which, admittedly, can be used for things such as schools that can help the economy in the long run. Maybe that’s a trade-off worth making, especially since the General Assembly seems disinclined to provide enough school funding to fix certain problems. Ultimately, voters in those five communities will have to make that decision. But, please, let’s not pretend that casinos will “transform” anything.