Galvano, Crist talk gambling deal
By Sara Kennedy
skennedy@bradenton.com
Copyright © 2009 Bradenton.com
Friday, April 24, 2009
MANATEE — Gov. Charlie Crist met Thursday with Rep. Bill Galvano, R-Bradenton, and Jim Allen, representing The Seminole Tribe of Florida, in an effort to reach an agreement on new gambling legislation.
“We had a positive conversation about trying to figure out where we can find common ground on the compact issue,” Galvano said.
“No major decisions were made. We’ll continue the dialogue so we can move forward,” said the chairman of the House Select Committee on Seminole Indian Compact Review, charged with reviewing an agreement the governor and The Tribe signed in 2007. The agreement was later invalidated by the courts.
Galvano said he reiterated the position of House members, who have proposed more conservative gambling terms than either the state Senate or the governor’s original compact.
“We will take a hard look at their latest proposal. They will look at what I told them about my members,” said Galvano. “We’re just having a dialogue.”
With budget negotiators for House and Senate awaiting a decision on the gambling issue, time is running out on the session scheduled to adjourn May 1.
Asked if he thought the parties could reach a compromise, Galvano said, “I think we’ll eventually reach some agreement, but so much is going on in the session, there’s a lot in play.”
“It’s still a possibility,” he added.
A call seeking comment from Jim Allen, representing the Tribe, was not immediately returned.
Wednesday, the governor and The Seminole Tribe said On Wednesday, the governor and the Seminole Tribe said they hoped $600 million in upfront money would inspire a new look at the gambling deal signed in 2007. they hoped $600 million in upfront money would inspire a new look at the gambling deal signed in 2007.
As part of a revised deal, the tribe would immediately give the state the money the first year and up to $500 million in the second. The state would get no money in the third year and only a small amount the fourth year. After that, the Tribe would begin giving the state a percentage of its profits from slot machines and card games the state would authorize.
“We skip one year of sharing with our friends, the Seminoles, and thereafter, we share with them the next 25,” said Crist, who wants the money for education.
The deal is similar to the compact Crist signed in 2007, allowing the tribe to install slot machines and operate card games such as blackjack and baccarat.
The Supreme Court later ruled he lacked the authority to sign the compact, but the Tribe still operates the games. After the first four years of the deal, the Tribe would give the state 10 percent of its first $2 billion in profits from new games and higher percentages of profits above that amount, up to 25 percent of profits above $4.5 billion.
Still, the lure of more money did not seem to impress Galvano.
“The issue we have is that front-loading the dollars doesn’t necessarily solve the long-term issues,” explained Galvano.
“The negative impacts on other industries in Florida (could) potentially exacerbate the budget problems we’ll have when the stimulus (money from the federal government) runs out in a couple years,” Galvano said.
Crist urged lawmakers to consider the deal, and state Sen. Jim King, R-Jacksonville, called it “a godsend” that could help break the stalemate between the House and Senate.
Sara Kennedy, Herald reporter, can be reached at (941) 708-7908 or at skennedy@bradenton.com.
The Associated Press contributed to this article.
Crist, at school, touts gambling revenue's benefits
By Beth Reinhard and Mary Ellen Klas
Miami Herald Reporters
© 2009 Miami Herald
Friday, April 24, 2009
Facing resistance from lawmakers to a $1.1 billion gambling deal with the Seminole Tribe, Gov. Charlie Crist ditched Tallahassee Thursday to visit a struggling Little Havana school he said would benefit from the money.
Crist didn't make his pitch directly to the Riverside Elementary Community School teachers or students. He made it to a troop of television cameras.
''It will put more money into education for this hard-working principal and, more importantly than that, for the children at this school and others around the state,'' he told a media gaggle after climbing the school's steps. ``We need to make sure we continue to make progress in education in Florida, and the opportunity to adequately fund great schools like this one today is the way to do it.''
At Riverside Elementary, Crist praised students who were rapping the multiplication tables, thanked teachers for their hard work and shook hands with parents. But some of them didn't share his enthusiasm for allowing the tribe to expand its Las Vegas-style slots in exchange for $1.1 billion over two years.
''Gambling is not good for society. It's an addiction,'' said Octavio Ochoa, who was picking up his 5-year-old son, Xavier. ``If they have the will, they will find another way to pay for education.''
''Gambling is very negative and I wouldn't want to expand it,'' said third-grade teacher Jorge Carabeo, although he welcomed the opportunity for students to show off their knowledge of pronouns to the governor.
On Wednesday, Crist tried to unhinge stalled budget negotiations by offering an unprecedented $1.1 billion cash advance from the Seminole Tribe as an upfront payment for part of the proceeds of a 25-year gambling deal.
DEAL WITH SEMINOLES
The deal would allow the Seminoles to continue running blackjack tables at their Hard Rock Casinos, plus five other tribal tribe sites, and it would give the tribe the exclusive right to operate Class III slot machines outside of Miami-Dade and Broward counties.
But legislators, with few exceptions, roundly rejected the idea. House and Senate budget negotiators traded proposals for the state's $66 billion budget without even acknowledging the offer. The Senate's latest offer was for $504 million in gambling revenues, while the House remained at $400 million.
''It was a non-starter,'' said Sen. Dennis Jones, the Senate's lead budget negotiator. ``It's just smoke and mirrors. We're looking for long-term solutions for Florida to retain income. Anybody can put stuff on their credit card but you've got to pay it back.''
He said when the federal stimulus money runs out in two years, ``when we want the gambling revenue, we'd end up with squat.''
Rep. Bill Galvano, a Bradenton Republican and House point man on the issue, said he told Crist he wasn't prepared to recommend the legislature accept the offer.
`NO AGREEMENT'
Jones said the Senate is willing to drop its demand that parimutuels outside South Florida that compete with the tribe for customers get Class II slot machines, but Galvano said there's ``no agreement on anything else.''
Back in South Florida, the school's principal, Sharon López, said she didn't know the governor was coming to talk about gambling -- only that he wanted to see the school -- and she said she wasn't prepared to comment on the proposal: ``That's a very difficult question for me to answer. My purpose is to welcome the governor and make him feel at home.''
In anticipation of his visit, she borrowed potted plants from Coral Gables Senior High, while janitors touched up the paint on the walls. The sprucing up bothered a couple of parents who say they are worried about budget cuts and already donate about $1 a week to teachers for paper and other supplies.
The biggest endorsement on campus for Crist's proposal came from the president of the United Teachers of Dade, Karen Aronowitz, who has been battling for teacher raises for months. ''I'm for anything that will enhance revenue for education,'' she said.
Crist's pitch recalled the 2003 campaign by slot-machine proponents, who used school funding as a selling point for a constitutional amendment paving the way for gambling referendums in Miami-Dade and Broward.
Herald/Times staff writer Steve Bousquet contributed to this report.
Seminoles' offer is tempting
but is bad in the long run
By Myriam Marquet
mmarquez@MiamiHerald.com
Miami Herald Reporter
© 2009 Miami Herald
Friday, April 24, 2009
Take the money and run, says state Sen. Alex Diaz de la Portilla of Miami. The Seminoles' latest proposed casino-gambling deal, blessed by Gov. Charlie Crist, offers the state a quickie save during these tough times. It's fast cash in a slumbering economy. It's also bad policy.
Crist, who happened to be at Riverside Elementary in Little Havana on Thursday, has told legislators the money from the gambling compact should go for education. Roll the dice, kiddies, it's all going to the public schools.
Yeah, we've seen that shell game before.
Don't blame the Seminoles. They're shrewd business people, offering to front-load their gambling payments to Florida from a couple hundred million dollars a year to $1.1 billion over two years. In exchange for that windfall, the Legislature would have to give the OK for the Seminoles to continue to operate the Hard Rock Casinos' blackjack tables and pump up five other tribe-run gambling joints throughout Florida with the more lucrative Class III slot machines.
And for those seven other non-Indian gambling establishments at horse tracks and other parimutuels in Miami-Dade and Broward, the lawmakers could reduce the current 50 percent tax to 35 percent. They could open 24-7, even offering free drinks to attract the younger crowds, joining the abuelitos with their senior-citizen discounts. What the heck, raise the poker limits, too.
It's all in an effort to be fair to the non-Indian establishments that pay state taxes when the Seminole Tribe, as a sovereign nation, doesn't have that same obligation.
DETAILS? WHY BOTHER?
So for $600 million this year -- with the help of a loan that the state and the tribe would split interest payments on to repay financial markets -- the Seminoles would close the gap between the House and Senate's proposed budgets. That's a lot of upfront cash in a 25-year agreement that promises $2.5 billion overall to Florida.
Tick tock, time's running out. Here's the money, take it and run. Details? Why bother?
Except we're acting in desperation to set policy that has vast ramifications for Florida's future. In year three of this deal, for instance, there wouldn't be a penny coming from the Seminoles. Then the money spigot would start sputtering again. What will schools do then without a $600 million fix if the economy is still in the dumps?
Plus, we're once again borrowing to close a budget hole that an increase in the tobacco tax would fill -- and deliver health benefits to boot. The tobacco tax is estimated to raise as much as $1 billion in a year. Over time, the take would be less because some people would quit smoking to save money. That's still a win-win because the health costs to Medicaid from smoking-related illnesses is huge.
No question gambling is here to stay -- and the Seminoles could walk away and still get the OK from the federal government. Absolutely, Florida should get a cut because a host of social problems come along with gambling.
TARGET TAX EXEMPTIONS
So why have a compact that gives the Seminoles the advantage, but cuts off any profit-sharing with the state in 25 years?
Why saddle Florida with more interest debt for a short-term infusion of $600 million this year when there are at least a couple of billion dollars out of the state's $12 billion in tax exemptions that the Legislature should pursue?
As one who likes to dabble in the slots once in a blue Miami moon, I'm all for having my quarters going to education. But don't be fooled. A deal worked out in duress -- when there are other, better options -- is neither responsible nor sound. It's a crapshoot.
Big loan from tribe risky gamble for state
The Tampa Tribune Editorial
Copyright © 2009 Tampa Tribune
Friday, April 24, 2009
The Seminole Tribe is not being devious in offering the state a huge short-term loan. For the casino operators, it's a smart business proposition with no risk.
For the governor and legislators, the deal also is tempting, because it helps them out of a budget hole.
For the state's taxpayers, it's a different story. They and whoever represents them in the Legislature in 2011 will see a sudden drop in revenue until the loan is repaid.
Under the deal, the state would take an advance on future taxes of $600 million this year and $500 million next year. It would allow hard choices to be postponed.
Accepting the offer would be another example of patchwork financing and short-term thinking. It also would be something of a conflict of interest to take financial help from an industry being taxed and regulated.
The Legislature should say thanks, but no thanks, and debate how to tax and control casino gambling without being in debt to the tribe.
Other parts of the deal are reasonable. The proposal limits full-scale casino gambling to tribal lands and also gives a few perks to the parimutuel competitors, including the potential to operate 24 hours a day.
An acceptably small expansion of gambling in the agreement is countered by a steady stream of tax revenue from the casinos' profits.
Lawmakers need to have enough faith in the future that they aren't panicked into destroying vital programs and growth regulations and letting the oil industry drill along its beaches. But they cannot guarantee a fast enough recovery from the recession to make taxpayers feel comfortable about taking a cash advance from the Seminoles.
Florida's financial future is cloudy, as a recent analysis from Moody's Investors Service shows. It has placed Florida's top-rated bonds on a watch list for downgrading. House Majority Leader Adam Hasner points out that a lower rating would cost Florida taxpayers "hundreds of millions in increased interest costs over the next few years and billions of dollars long-term."
One reason for Moody's concern is the state's heavy reliance on one-time revenue. Revenues aren't expected to return to 2005 levels until 2013. There are no solid plans to refill depleted trust funds.
Recovery of the housing market isn't expected until late in the 2011 fiscal year. The credit analysts also cite a "failure to prepare a reasonable plan to restore budgetary structural balance."
The plan the last two years has been to drain reserve accounts, cut services and programs, think up new tax cuts, and now, accept a loan from the Seminoles.
The tribe would borrow the money and split the costs evenly with the state. What started out as a new source of revenue - Gov. Charlie Crist's original deal with the tribe to give the state a cut of at least $100 million a year - is about to mutate into an unsettling liability.
We agree with Republican Rep. Bill Galvano of Bradenton that taking a line of credit from the Seminoles is not a responsible way to balance the budget. It may not qualify as deficit financing, but it's close.
A person in financial difficulty who borrows money to gamble on a hunch his luck is about to change needs counseling. If the lawmakers accept this loan, so will they.