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Governor predicts a jackpot

Millions targeted for road, bridges, property tax relief
Proposal is hailed, faces turbulence on Beacon Hill

By Frank Phillips and Andrea Estes
Globe Staff / September 18, 2007

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Governor Deval Patrick, ending months of private study and public speculation, invited the casino industry to come to Massachusetts yesterday in a watershed proposal that he said will create 20,000 jobs and generate $2 billion in economic activity from three resort-style casinos in various regions of the state.

In unveiling his proposal, Patrick said the financial windfall would outweigh the serious social ills associated with gambling. The hundreds of millions of dollars in additional state revenues, he said, would be directed toward rebuilding the state's crumbling roads and bridges and providing property tax relief for beleaguered homeowners.

"Casino gambling is neither a cure-all nor the end of civilization," Patrick said at a State House press conference. "Under certain conditions, I believe casinos can work well in and for the Commonwealth."

Patrick's plan immediately encountered turbulence in key places on Beacon Hill. House Speaker Salvatore F. DiMasi, a longtime gambling opponent, responded coolly to the initiative, saying, "We in the House remain skeptical."

"So far, our concerns for ushering in casino gambling have not been eased," DiMasi said. "But we will hear the governor out, and we will be asking the governor to explain the rationale behind his conclusions."

Patrick, who must win the support of the Legislature for his plan to proceed, wants to license three casinos: in Southeastern Massachusetts, Western Massachusetts, and the Boston metropolitan area. His plan would encourage bidding by the Wampanoag Indian tribe, which has proposed a casino resort in Middleborough, by including a provision that would give special consideration to an Indian bid for one of the licenses.

The administration estimates that bidding for the 10-year licenses would produce between $600 million and $900 million in upfront fees for the state. The state would then receive 27 percent of gambling proceeds from all three casinos each year. That would amount to $400 million a year, after subtracting the costs of treating chronic gamblers, beefing up police enforcement, and creating a regulatory branch of government.

"With that potential economic generator, we cannot reject the casino industry out of hand," Patrick said. He presented the initiative as an alternative to raising taxes.

His long-awaited decision was praised by advocates for casino gambling, including the potential bidders for the licenses, the labor unions that represent hotel and resort workers, trade unions, some municipal officials, and the state's tourism officials.

"This is a way of helping Massachusetts' beleaguered cities and towns without raising revenues through taxation," said Mayor Thomas M. Menino, who supports a casino resort at Suffolk Downs race track in East Boston. He called the facility "the only feasible site in Boston."

But Patrick's proposal is also creating strong opposition that cuts across ideological lines. Some of his closest supporters denounced his decision, as did social conservatives, including the Roman Catholic Archdiocese of Boston and the state's leading group opposing same-sex marriage.

Scott Harshbarger, the former attorney general and a liberal Democrat who was an early supporter of Patrick last year, said he was disappointed in the decision. "This is bad public policy, and it would be a huge mistake for Massachusetts to take this step in expanded gambling," he said. "His campaign was not about casinos but real economic development, on the merits and not on quick fixes."

The Massachusetts Family Institute, an anti-gambling group, called the proposal a "short-sighted, dangerous approach to economic growth." Kris Mineau, the group's president, said the institute and other opponents are considering taking the issue to the state ballot for voters to decide. The earliest it could appear before voters is 2010.

Under the governor's plans, the state's proceeds from the casinos would be evenly divided between paying for road and bridge repairs and bringing tax relief to an estimated 1 million property owners. He proposed a property tax credit that would range from $150 to $400 a year for qualified property owners and average about $215. Property owners who pay 2.5 percent or more of their income on property taxes would qualify for the credit. The average property tax bill in the state was $3,962 in the last fiscal year.

The governor's proposal calls for the state lottery, which provides about $950 million a year in aid to cities and towns, to receive additional funds from the casino money to make up for the expected loss because of the new gambling competition.

Patrick said 2.5 percent of gross casino proceeds would be placed in a public health trust fund to pay for increased problem gambling referrals. Another 2.5 percent would be set aside to help host towns and adjacent towns with increased police, fire, and transportation costs.

A special gaming commission, paid for by the casino operators, would be created to oversee the casinos. Patrick said the details of the commission membership and other details are still being worked out. A special unit would be created in the attorney general's office to enforce gaming laws.

"We will regulate casinos vigilantly, professionally, and independent of politics," Patrick said.

(Correction: Because of a graphic designer's error, a chart accompanying the inside portion of a Page One story yesterday about the governor's casino proposal misspelled the surname of casino developer Sheldon Adelson.)