Tolls, slots and pot?

State could be miss­ing out on bil­lions in rev­enue

The Middletown Press (Middletown, CT) - - FRONT PAGE - By Bill Cum­mings

HART­FORD — Statewide high­way tolls could pump as much as $900 mil­lion per year into state cof­fers, and le­gal­iz­ing mar­i­juana more than $100 mil­lion.

Build­ing a new casino in Bridge­port could net $316 mil­lion year.

That’s more than $1.3 bil­lion an­nu­ally — money that could plug deficits, fix roads and bridges and help school dis­tricts and mu­nic­i­pal­i­ties.

But as law­mak­ers strug­gle to cob­ble to­gether a new state bud­get, close bil­lion-dol­lar deficits and end Con­necti­cut’s cy­cle of boom-to-bust bud­get­ing, none of those fu­ture money-gen­er­at­ing op­tions are on the ta­ble.

State Rep. Chris Rosario, DBridge­port, said col­leagues who serve in leg­is­la­tures in Mas­sachusetts and Rhode Is­land are scratch­ing their heads over Con­necti­cut’s choices.

“They ask me, ‘Why are you leav­ing that money on the ta­ble?’ — tolls, mar­i­juana and casi­nos,” Rosario said. “They say that’s crazy. I’m in fa­vor of all three.”

The Gen­eral Assem­bly’s Demo­cratic ma­jor­ity’s lead­ers ac­knowl-

edged all three rev­enue op­tions could pro­vide sta­ble sources of money over the long term — if the votes can be found for pas­sage. But they also said the rev­enue would not be­gin flow­ing for sev­eral years so it can’t help solve the im­me­di­ate bud­get stale­mate.

“I’m open-minded on this stuff,” said House Ma­jor­ity Leader Matt Rit­ter, D-Hart­ford, adding that at the mo­ment, “we don’t have the votes in the Gen­eral Assem­bly.”

Kelly Don­nelly, a spokes­woman for Gov. Dan­nel P. Mal­loy, said the po­ten­tial rev­enue sources prob­a­bly will be on the ta­ble next year.

“I think it would stand to rea­son that many of th­ese de­lib­er­a­tive dis­cus­sions will be taken up again dur­ing the next reg­u­lar ses­sion,” Don­nelly said. “In ad­di­tion, there is a set of larger pol­icy chal­lenges and ques­tions unique to each of th­ese three is­sues which would need to be worked out first.”

Tra­di­tional eco­nomic de­vel­op­ment could pro­vide rev­enue to help elim­i­nate fu­ture deficits and off­set stag­nant tax rev­enue, but the state has been los­ing cor­po­rate an­chors and is not lur­ing re­place­ments.

And when it comes to taxes, Ki­plinger re­leased a re­port Fri­day that ranked Con­necti­cut as the ninth least tax-friendly state in the U.S. Based in Washington, D.C., the pub­lish­ing com­pany re­leases an­nual reports on in­come taxes, sales taxes, gas taxes and so-called “sin” taxes on al­co­hol and tobacco. It pub­lishes busi­ness fore­casts and per­sonal fi­nance ad­vice.

With 169 towns and ci­ties now clam­or­ing for state dol­lars, pen­sions and ris­ing em­ployee costs drain­ing state cof­fers and lit­tle re­gional cost shar­ing, Con­necti­cut is at a cross­roads.

And as the bud­get stale­mate has shown, there are no easy an­swers.

High re­turns

Mar­i­juana is now a big busi­ness across the coun­try, and Colorado and other states are rak­ing in bil­lions in an­nual rev­enue from taxes levied on le­gal recre­ational mar­i­juana.

Mas­sachusetts and Maine vot­ers last year le­gal­ized pot, and sales are ex­pected to be­gin next year. Rhode Is­land law­mak­ers re­cently voted to study le­gal­iz­ing it. In all, eight states al­low the sale of recre­ational mar­i­juana and 21 al­low med­i­cal mar­i­juana.

Rev­enue es­ti­mates from tax­ing recre­ational pot in Con­necti­cut run as high as $180 mil­lion a year. Other pro­jec­tions place the take at be­tween $45.4 mil­lion and $104.6 mil­lion per year.

But nu­mer­ous at­tempts to au­tho­rize recre­ational mar­i­juana have failed in the Gen­eral Assem­bly. Rit­ter said tolls cur­rently have a bet­ter chance of pass­ing than le­gal mar­i­juana.

“With weed, there is a lot of push­back,” Rit­ter said.

Se­nate Ma­jor­ity Leader Bob Duff, D-Nor­walk, said le­gal weed is not some­thing that can be “slammed into a bud­get” at the last minute.

“It has to be done care­fully with a look at the pit­falls and proper pro­tec­tions for chil­dren,” Duff said. “Be­fore you le­gal­ize it you need a plan in place that makes sense.”

Rosario said the re­sis­tance to le­gal mar­i­juana, de­spite polls that show a solid ma­jor­ity of res­i­dents are in fa­vor, is rooted in fear of los­ing the next year’s elec­tion. “If you do your job and max­i­mize rev­enue, you will be fine next year,” he said.

State Sen. Toni Boucher, R-Wil­ton, said le­gal mar­i­juana is the last thing the state needs.

“Mas­sachusetts is push­ing for job de­vel­op­ment,” Boucher said. “The rest is an­cil­lary. We need to cut reg­u­la­tions and li­cens­ing costs and do some­thing about col­lec­tive bar­gain­ing. There are many things that can be done.”

High­way tolls

Rev­enue pro­jec­tions for statewide elec­tronic tolling in Con­necti­cut vary, with es­ti­mates as high as $900 mil­lion a year. A study com­mis­sioned by the state ranged from $62 bil­lion over 25 years to $5 bil­lion if only $2 border tolls were es­tab­lished.

The Port Au­thor­ity of New York and New Jer­sey brought in $1.9 bil­lion in toll rev­enue last year; Penn­syl­va­nia, $1 bil­lion; New Jer­sey, $1.5 bil­lion; and Rhode Is­land, $20 mil­lion, a re­cent re­port shows.

Tolls on Con­necti­cut’s high­ways have been dis­cussed for years but leg­is­la­tion con­sis­tently stalled in the Gen­eral Assem­bly. Tolls came the clos­est to a full vote last month when the Leg­is­la­ture’s Demo­cratic ma­jor­ity in­cluded a new Con­necti­cut Tran­sit Au­thor­ity with au­thor­ity to im­ple­ment tolling in its pro­posed state bud­get.

But that bud­get went down in flames af­ter eight Democrats in the House and Se­nate de­fected and voted for a Re­pub­li­can bud­get, which was later ve­toed by Gov. Dan­nel P. Mal­loy.

State Sen. L. Scott Frantz, R-Green­wich, said he sus­pects Democrats will pro­pose tolls, set­ting up an­other bat­tle.

“[Democrats] en­dorsed the tran­sit au­thor­ity,” Frantz said. “But I’m against tolls.”

Boucher added, “mak­ing Con­necti­cut a gam­ing and drug state, I think that’s a net neg­a­tive.”

High roller

MGM Grand’s pro­posal to build a $600 mil­lion water­front casino in Bridge­port — and the more than 7,000 per­ma­nent and con­struc­tion jobs that come with it — rep­re­sents an­other po­ten­tial long-term rev­enue source for the state.

The com­pany is promis­ing to pay the state $316 mil­lion an­nu­ally, $8 mil­lion per year to Bridge­port and to build a new em­ploy­ment train­ing cen­ter in New Haven. A one-time $50 mil­lion gam­bling li­cense fee would be paid to the state.

But the pro­posal comes with a se­ri­ous prob­lem: it would vi­o­late the ex­ist­ing gam­bling com­pact with the state’s two In­dian tribes.

If a Bridge­port casino is au­tho­rized, the $260 mil­lion in an­nual pay­ments from the Fox­woods and the Mohegan Sun casino re­sorts would end, tribal lead­ers warn.

MGM claims the new Bridge­port casino would more than make up for the lost tribal money.

“I’m not op­posed, it’s an op­tion,” Rit­ter said of a Bridge­port casino. “But you have to fig­ure out the com­pact. Is MGM sub­si­diz­ing the en­tire com­pact? I have not seen that.”

Duff said law­mak­ers first must pass a new two-year bud­get be­fore con­sid­er­ing com­pli­cated casino leg­is­la­tion with long-term fi­nan­cial and le­gal im­pli­ca­tions.

“Once you make a deal with MGM, you trade off the money with the tribes,” Duff said, adding it’s un­clear how much the com­pany is of­fer­ing to pay.

Frantz said he op­poses ex­pand­ing gam­bling re­gard­less of where it’s placed.

“It’s a re­gres­sive tax,” Frantz said. “I’d rather see an amuse­ment park or some­thing else there.”

Con­trib­uted photo

Con­cep­tual ren­der­ing of MGM Bridge­port Re­sort Casino & En­ter­tain­ment Dis­trict.

Tyler Size­more / Hearst Con­necti­cut Me­dia

Cars pass through the New Eng­land Thruway Toll Plaza on the stretch of I-95 be­tween New Rochelle and Larch­mont, N.Y.

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