Monday, April 13, 2015

Think Wisconsin doesn't rely on gambling? Think again

Wisconsin budget season starts to kick into high gear this week, as the Joint Finance Committee's budget hearings with several smaller departments and appropriations being discussed on Wednesday. Included in those departments are discussions of the state's two main gambling accounts- the Indian gaming funds and the state's lottery fund.

We'll start with the Lottery Fund, which is generating more sales than ever, and is a hidden reason behind Gov Walker's claims of higher property tax relief. Take a look at the Legislative Fiscal Bureau's informational paper of the Lottery Fund and other property tax credits, and you'll see that increasing amounts of money have become available to return to Wisconsin property taxpayers over the last 5 years.

Lottery Fund distributions for property tax relief, 2009-2014
2009 $113.2 million
2010 $129.2 million
2011 $134.8 million
2012 $141.5 million
2013 $168.8 million
2014 $166.6 million (+47.2% vs 2009)

In the City of Madison, for example, this has resulted in the lottery credit expanding from $82.46 to $131.39 for the average homeowner over those 5 years (your local savings may vary, given that the lottery credit is related to how much of a tax rate a local school district levies). This expansion of tax relief has next to nothing to do with initiatives from Gov Walker or the GOP Legislature, but is instead based on higher lottery sales in recent years and the related "earnings" (the difference between how much people shell out for Wisconsin lottery games vs. the winnings and expenses to put on a lottery). But you bet the Gov and the WisGOP leggies have taken credit for the lower property tax bills that have resulted from those lottery credits.

On Wednesday, the Joint Finance Committee will decide on the level of the Lottery Fund's credit for the next two years. The LFB just looked at the most recent figures for the Lottery Fund, and as a result, the next two years will also feature sizable paybacks to Wisconsin property taxpayers, if a bit smaller compared to the last 2 years - $162.95 million for next winter's property tax bills, and $161.7 million for 2016.

Indian gaming also will be on the docket for that JFC meeting, which is intriguing given Gov Walker's cave-in to fundie interests in Iowa earlier this year, where he refused to allow the Menominee to build a casino near Kenosha. Interestingly, Walker's 2015-17 relies on the current Indian casinos giving the state an increasing amount of money, to fill in the gaps in his deficit-ridden budget, as these numbers from the LFB's summary of Indian gaming provisions will show.

Indian gaming revenues to be deposited to General Fund
2015-16 $23.85 million
2016-17 $24.71 million

The Indian gaming provisions also play a role in the proposed cuts to the UW System, because Walker's proposal to turn the UW System into an independent authority and end the outreach mission of the Wisconsin Idea also removes the requirement of certain Native American-related programming at UW schools. And many of those programs were previously funded by Indian gaming revenue. The Fiscal Bureau goes over these reductions, as well as the additional staff that the Department of Administration are set to hire to regulate the Indian gaming, now that there's more money to play with.
(a) Administration UW-Green Bay and Oneida Tribe programs assistance grants [item #2, reduction of $247,500 in 2016-17 due to the creation of the UW System Authority]; (b) Tourism general tourism marketing [item #35, reduction of $475,000 annually to eliminate required transfers of specific amounts to specific organizations]; (c) Ashland full-scale aquaculture demonstration facility debt service payments [item #38, a reduction of $6,400 in 2015-16 and $62,900 in 2016-17 for debt service payment reestimates]; (d) Ashland full-scale aquaculture demonstration facility operational costs [item #39, a reduction of $417,500 in 2016-17 due to the creation of the UW System Authority]; (e) University of Wisconsin-Madison physician and health care provider loan assistance [item #40, a reduction of $488,700 in 2016-17 due to the creation of the UW System Authority]; and (f) Administration Indian gaming operations [item #45, increases of $43,500 in 2015-16 and $46,300 in 2016-17 for standard budget adjustments and increases of $33,900 in 2015-16 and $28,900 in 2016-17 for a reestimate of the cost to operate and maintain the gaming integrated regulatory information system].

(EDIT: There's been a late development! As part of a list of corrections sent this afternoon to "better reflect the Governor's intent," now the Walker Administration says that $325,000 of the tourism funding that is generated from Indian gaming should stay with the Department of Tourism. So drop that help to the General Fund by the same $325,000.)

Those lapses and refusal to provide Native American-related programming is how the state can take in nearly $280,000 LESS in gaming revenues for 2016-17 vs 2015-16, but still allow the General Fund to take in just over $535,000 MORE from those revenues in the second year of Walker's budget. Nice trick, eh?

In addition, the provisions that remove funding for the UW System is a double-whammy, because if the System chooses to continue to operate provisions such as the Oneida Assistance grants at UWGB or the Acquaculture facility or the physician/health care provider loan assistance, the UW has to fund that themselves. This is insult to injury at a time where five UW campuses are already offering buyouts to employees in the face of $300 million of other Walker cuts. Let's see if those lines get connected at Wednesday's hearing.

So as you can see, just because Scott Walker pandered to anti-gambling fundies in Iowa to turn down the proposed Menominee casino in Kenosha, it doesn't mean he isn't fond of using gambling money as part of the state budget. For both the increased property tax relief from the lottery fund, and in giving the General Fund a higher amount of Indian gaming revenues, Walker is all about using gambling proceeds if it helps him look good, and bragging about the improved budget and tax relief that results. He's just hoping you don't look back at the source.

1 comment:

  1. Jake, thanks as always for bringing these budget gimmicks to light. But please don't characterize the Kenosha Casino decision as "caving to Iowa Fundies." They were bit players who jumped in at the last minute.

    The big money against the Kenosha Casino was coming from WI Club for Growth via its front group, Enough Already WI, Inc. They were doing big broadcast ad buys last fall and winter, and had been at least doing blogs/tweets/press releases against the casino for years leading up to that. Wisconsin Family Action (Fundies, but not Iowans) did some ads too.

    It's dark money, so it's impossible to tell exactly who was donating and why; and it's quite possible that Potawatomi played a role here, if not directly funding the advertising then shelling out for more lobbying clout than the Menominee could ever dream of.

    ...but in any case the Iowa Fundies were at best a distant 4th behind these groups in terms of swinging the Kenosha Casino decision. They just had impeccable timing with some of their stunts/statements and most media took that to mean they were steering the ship.