September 20, 2024
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Economists back casino projections Professors: Tax, job forecasts sensible

AUGUSTA – Two Maine economists agreed Monday with proponents of a tribal casino who told a legislative panel the state would gain nearly 10,000 new jobs and $130 million in additional tax revenue from the construction of a gambling resort in York County.

But some members of the Task Force to Study the Impact of a Maine-Based Casino argued that the tribes’ economic experts had not fully calculated the costs associated with a regional rise in housing and crime.

Sen. Jill Goldthwait, a Bar Harbor independent and member of the 18-member committee, took particular offense at a closing statement in a report submitted by tribal consultant Jim Klas. The casino economist from Minneapolis acknowledged in his report that there would be new costs to the state to mitigate problems associated with traffic congestion, pathological gambling and emergency services. But he added that when those relatively small expenses were compared to the casino’s enormous economic benefit to the state, arguments against the proposal on those specific points were “absurd.”

“I listen to people all day, every day, making arguments for and against different programs,” Goldthwait said. “I have yet to tell them that any of their arguments were ‘absurd.’ It offends me to read that a document that is supposed to be an objective cost document to help us make a decision claims that [up to] 50 percent of the people in this room have an opinion that is ‘absurd.'”

Charles Colgan, an economist and a professor of public policy and management at the University of Southern Maine, was hired by the tribes to independently evaluate the economic analysis Klas submitted to the panel.

“I believe [Klas’ conclusions] were reasonable estimates,” Colgan said. “We had extensive discussions about how he developed the information and conducted the analysis, and I found that to be well within the usual practices for doing such analysis.”

Klas’ findings were also supported by Jonathan Rubin, an associate professor of economics at the University of Maine. Like Colgan, Rubin was also retained by the tribes to analyze Klas’ economic projections for the casino.

“We concluded it was a reasonably well-done work,” he said. “They certainly, as far as I can tell, have not tried to inflate their numbers. It will have a very large impact because it is a very big proposal and the numbers seem reasonable.”

Monday’s gathering was the second meeting for the task force which is charged with providing a detailed report to the next Legislature on the benefits and detriments a casino could bring to Maine. The panel will not make a recommendation on whether the 121st Legislature should support or discourage the casino that Klas said would cost $650 million and require two years to construct.

The new economic information was provided at the panel’s request by Tom Tureen, a Falmouth attorney representing the Penobscot Nation and Passamaquoddy Tribe which are seeking permission from the state to build the casino. Klas, whose consulting work is well-known in the casino industry, estimated that a gambling resort in York County could draw from a potential market of 15 million people within a 200-mile radius of Sanford. Less than 10 percent of that market, he said, would reside in Maine.

Tribal leaders envision a 200,000-square-foot facility modeled after New England’s Victorian resorts of the 1890s. It would feature an 875-room hotel, 2,000-seat theater, 100,000-square foot convention center and 20,000-square-foot spa. The complex also would contain 10 restaurants and nightclubs along with a golf course, tennis court, cinema and bowling center.

By the time it reached its third year of operation, the casino would return $129.7 million a year to the state in gambling and personal income tax revenues, according to Klas. He said the facility would provide 9,870 new jobs with average annual salary and benefit packages pegged at $31,400. It is expected that much of the casino’s labor force would commute from as far north as Augusta and south from New Hampshire and Massachusetts.

Although he did expect the casino to draw more customers during the summer vacation months, Klas doubted the resort would find it necessary to lay off workers during the winter.

“Generally speaking, an operation like this will attempt to manage its work flow by scheduling vacations and [with] part-time [workers] versus full-time,” he said.

The panel also heard Monday from representatives of the Maine State Lottery and the Maine Restaurant Association. When looking at similar situations in other states, Lottery Director Eben Marsh predicted Maine’s annual lottery revenues could dip by as much as 20 percent. But he added that the additional revenues provided by the casino would more than offset those losses.

Dick Grotton, MRA executive director, worried a casino would worsen an already serious labor shortage in York County restaurants and would drive up labor costs in the region.

The task force will hold its next meeting at 10 a.m. Oct. 25 at the Cross State Office Building.


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