Legislature and Opinion and Statehouse Dispatch

FEIGENBAUM: Legislature's second half will have its share of drama

February 6, 2010

Perhaps it was serendipity that the midpoint of the 2009 legislative session fell just ahead of the Indianapolis Colts’ Super Bowl appearance. Lawmakers could leave town a bit earlier than usual for festivities in Miami or back home as they contemplated the second half of the session.

Uncharacteristically, there is not a formidable agenda of heavy lifting awaiting legislators when they return to address bills that have cleared their chambers of origin.

That is not to say, of course, that nothing controversial or tough to tackle remains.

The political parties will spar over the Unemployment Insurance Trust Fund bill, and over the Illiana Expressway authorization, a potentially major job-creation mechanism. Much also still must be ironed out between the administration of Republican Gov. Mitch Daniels and the General Assembly over education measures, particularly the school start-date, flexible funding, and “social promotion” bills.

In addition, disagreements remain over smoking ban provisions, texting while driving, and guns in the workplace. Another subject that will be addressed during the second half of the session is preserving state gambling tax revenue.

On Feb. 2, the Senate voted 33-17 to send to the House a stripped-down version of SB 405, the omnibus gambling bill.

Last April, the regular session collapsed without a budget bill’s being passed, and House Speaker Pat Bauer, D-South Bend, blamed certain casino interests for holding the budget hostage. Senate President Pro Tem David Long, R-Fort Wayne, laid down the law for the special session: No gambling issues would be considered, deferred instead to a special intensive legislative interim study committee.

Fact-finding by that panel concluded that the coming threat from land-based casinos in Ohio was real, and would cut admissions to southeastern Indiana casinos as much as 40 percent, with tax losses approaching $100 million annually. Casinos are calling for tools to help them build markets.

The panel found some short-term casino cost savings and efficiencies could be achieved by allowing casinos to abandon ship, saving them the millions they spend annually on maritime crews and navigation standards. Some other tinkering at the margins—allowing casinos flexibility with complimentary alcohol services and allowing certain card tournaments and the like to be held in their adjacent land facilities—also would provide a small boost.

The panel also offered recommendations to alter and redistribute some Orange County casino taxes locally, and to reduce some of the burden racinos faced in sending cash back to the equine industry.

The key, however, was formal land-based gambling, and Sens. Luke Kenley, R-Noblesville; Earline Rogers, D-Gary; and Ron Alting, R-Lafayette, backed measures allowing casinos to convert to land-based facilities for a $50 million fee—and, in the case of Gary, move a license for the Majestic Star Casino (now in bankruptcy) to an inland site at Interstate 80/Interstate 94.

But the casinos collectively couldn’t compromise on a deal, angering lawmakers who had tried in good faith to forge a compromise that would work for the casinos and protect state coffers.

Casinos that invested hundreds of millions of dollars in new facilities built to maritime standards were not pleased that their neighbors, who had avoided major capital expenditures, could move off the water and build impressive facilities that they would be forced to compete against.

When it became clear there would be no industry consensus and the casinos were taking individual positions out of self-interest, Kenley scuttled the land-based provisions entirely for the time being.

As the bill moves to the House, land-based casinos will become the focus.

Few legislators cling to the position that land-based properties are inappropriate given the evolution of the industry toward gambling “platforms” that barely resemble vessels, the land-based Anderson and Shelbyville properties, and the boost that land-based gambling would give the construction industry and tax revenue.

Look for land-based casino options to emerge in the House or in conference, as Kenley takes the view from 40,000 feet and lobbies for a package that protects the state, even though some localities and their casinos will take a hit.

He’ll argue that, given the importance of gambling taxes to state coffers, his colleagues should overcome their parochialism for the greater good.•

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Feigenbaum publishes Indiana Legislative Insight. His column appears weekly while the General Assembly is in session. He can be reached at edf@ingrouponline.com

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