Tuesday, October 1, 2002 Bangor Daily News
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.