Thursday, March 24, 2011


Bet the Nag: Racino as a Policy Distraction

The Racino Bill was recently introduced in the State Legislature. Again. This time, it’s touted as a job creation measure but that hasn’t always been the case. Racino offers state policymakers a remarkably elastic legislative instrument, serving whatever purpose is required. Far more than creating jobs, Racino creates a public policy distraction.

Since at least 2003, some version of Racino has been introduced, authorizing Minnesota race tracks to expanding gambling beyond betting on the ponies. The term “racino” is an amalgamation of “racing” and “casino.” Since Canterbury Park, the Shakopee horse racing track and highest profile non-tribal gaming operation in Minnesota, already offers a 50-table card game room, gaming expansion really means slot machines. They’re the low-overhead, high profit-margin path to separating fools from their money.

Racino advocates claim that expanded gaming will create 3,500 jobs and generate $125 million in public revenue. Opponents note that few “new” jobs will grow; more likely, jobs will simply shift from existing tribal-owned casinos to non-tribal, privately-owned racinos.

$125 million per year, in the context of a $5.2 billion budget deficit, is a drop in the bucket. It’s not going to fundamentally rescue Minnesota’s economy. Bill sponsors propose restricting revenue to “economic development” without specifying what kind of economic development. A very rough calculation reveals that $125 million falls in line with the public debt-servicing required of a new professional football stadium. I’m not saying that will happen; just that it could be a potential revenue use. Stadium debt service isn’t quite the same as adequately financing Minnesota’s schools, healthcare, roads or real job creation.

Suddenly, we’ve tipped into Racino’s true purpose: distracting Minnesotans from what really matters. Conservative policymakers are most interested in preserving the “no new taxes” policy measures that financially favor Minnesota’s highest income earners. Rather than funding schools, affordable healthcare, good roads and creating job-growing economic development, conservative policymakers need to redirect the public’s attention. In this regard, it’s a remarkably successful, if politically dubious, strategy.

Rather than create real jobs, conservative policymakers are simply working to preserve tax policy that allows Minnesota’s highest income earners to pay a lower percentage of income tax than 9 of 10 Minnesotans pay. In economic development policy terms, the Racino proposal is the policy equivalent of rearranging the Titanic’s deck chairs. Whatever their configuration, they won’t stop the ship from sinking. Instead, Minnesota needs public policy focused on schools, healthcare, roads and jobs; the things that move Minnesota forward.