House Speaker Bob DeLeo, the Legislature’s biggest casino fan, had some ominous-sounding words to say to WGBH News yesterday about the possible budget consequences if the casino repeal succeeds at the polls:
Massachusetts speaker of the House Bob Deleo says lawmakers would have to patch a multi-million dollar hole in the state budget if voters choose to repeal the casino law in November.
“We would have to make some difficult decisions in terms of cuts. That’s one of the issues I thought about this morning actually,” DeLeo told reporters Wednesday.
The state is banking on $54 million in casino licensing fees and $20 million in slot parlor money in the budget for the fiscal year that begins July 1.
“We’ve already started to use it and depend upon it.”
OK, OK. Message received. We are to understand that there’s a threat of a big budget hole — something that would require either big budget cuts or big tax increases to fix.
Well, those of us who think casinos are a terrible idea also like to think of ourselves as problem solvers. And if budget cuts might be needed because the casino law is repealed, we offer up one suggestion to the House for the very first cut to make: give up the “sales tax holiday” that you have proposed for the second weekend in August.
The sales tax holiday weekend is a gimmick that’s been going on in the state for a decade. Its original purpose was to encourage people who to go buy things that they would not ordinarily buy during one of retail’s slowest months. But, even assuming that the holiday met its intended goal a decade ago, the fact that the Legislature has reprised the holiday in seven of the eight subsequent years has substantially reduced whatever stimulative power it once had. Now that buyers anticipate the holiday, it doesn’t encourage more sales, but simply shifts the timing of sales to coincide with the holiday. Little wonder that the Senate Ways and Means Chair, while defending the program, said in a moment of understated candor that it “may not be the finest public policy on the planet” (State House News, 7/28/11). On top of everything else, the accounting complexities the holiday requires of retailers favor bigger rather than smaller companies. The result? One weekend each August we shovel millions to our Walmarts.
According to the Department of Revenue, last year’s sales tax holiday cost the state over $24 million. We could make up one-third of the $74 million gap that Speaker DeLeo is forecasting just by bagging the sales tax holiday this year. Now that didn’t hurt too much — maybe this won’t be such a big problem after all. And eliminating the sales tax holiday is just one idea.
The budget hole that concerns the Speaker, when compared to the $22 billion in revenue that the state will collect amounts to…let’s see, about three-tenths of one percent. And by eliminating the sales tax holiday we’ve already made a big dent in that three-tenths of one percent.
The Speaker really shouldn’t worry so much.