Governor Andrew Cuomo is a man with a plan. At least, he should have one. After all, he spent $140 million meant for victims of Hurricane Sandy to convince businesses to hang their shingle in upstate New York. He even hired Robert De Niro as his PR man. And, then, we found out what the "New" New York was all about.
Were we going to crack into the Marcellus Shale and bring up some of the natural gas treasure trove beneath our feet? Pennsylvania has been tapping into it for a long time and no one wants to be of the receiving end of this speech:
New York State's environmental agencies have given fracking a clean bill of health. So, can we lift the state's ban on fracking?
Well, no, apparently not. Governor Cuomo has consistently delayed any decision on fracking while New Yorkers watch their neighbors across the state line reap the rewards of America's energy boom. But Governor Cuomo apparently has a Plan B: Don't worry, Upstate New York! Your governor intends to build three lovely gaming casinos for you!
The governor's announcement of the new casinos, to his credit, includes that reliable political cliche, "to further promote job creation." At least this governor can pretend that this is about ordinary New Yorkers. But we get all the beef toward the announcement's end: "The state and local governments will receive a total of $438 million as a result of the settlements of all three disputes. The settlements will also produce annual revenues to the state and local governments of at least $155 million a year."
In case you missed that, it didn't say anything about projected growth for the region or the number of jobs that these new casinos will create. But the average unemployed New Yorker whose kids subsist on food stamps and get clothes from the Salvation Army is probably glad that the coffers in Albany will be getting over half-a-billion dollars from this deal. Eighty percent of the money is earmarked for state education initiatives, which will be just great for finding jobs for all those unemployed New Yorkers who graduated from high school a decade ago.
Casino gambling would definitely be good for the government of New York. Casinos are state-licensed monopolies, sanctioned only by the government and required to pay a large chunk of their winnings to the treasury. But would it be good for New Yorkers themselves? Probably not.
Casinos don't make anything the way factories do. They don't provide vital services, the way health care workers do. They don't even pay for anything that makes anything, the way financial services do. They reshuffle wealth from one person to another but they don't add value to the economy.The only communities that prosper from them are those that manage to lure gamers from elsewhere: Think Las Vegas, Atlantic City, or any number of tribal reservations. Upstate New York casinos could only help average New Yorkers by pulling in gamers from Pennsylvania, Massachusetts, or Connecticut. Otherwise, gaming is just another tax on the Empire State.
Governor Cuomo claims that his plan will help pull business upstate. If he actually thinks that, he is either willfully deceiving himself or he is not being realistic. Just glancing at the proposed casino locations is enough to tell anyone why. No international businessperson visiting New York City is going to decide to go gamble at a single casino in Albany when there are nearly a dozen to choose from in Atlantic City. The drive isn't even enough to attract gamers. If Google Maps is to be trusted, it is a 2 hour 5 minute drive from Manhattan to Caesar's Casino and Hotel in Atlantic City, but a 2 hour 23 minute drive from Manhattan to the State Capitol Building in Albany.
Basically, this means that pretty much any money that upstate New York casinos will make will come from upstate New York residents, skimming more cash from people who already live in a challenging enough economy. "So what?" New York legislators might ask. "It's just another tax. New York State residents are used to those."
Here's what: Any taxes accrued from gambling revenue will hurt the poor more than the affluent. Yes, people of all different income levels gamble. But millionaires go to places where the casinos know how to attend to their every need. They don't just want the gaming, they want to go to comedy shows and the traveling circuses. It is what they do when they go on vacation. On the other hand, the single casino where you just go to plug tokens into a machine are the ones that draw the less affluent gamers. In upstate New York, these might be laid off Kodak workers, enlisted soldiers from Fort Drum, or maybe SUNY college juniors who end up blowing their textbook money playing on a roulette table.
And even if the casinos of upstate New York managed to pull in people with a diverse range of incomes, it would still be a heavier proportional tax on the poor than on the wealthy. Of his own gambling habits, New York City's second richest man said this: "I'm not a big gambler myself. I go to a casino, take my $20 bill and that's it, get it over with." Well, yes, for Michael Bloomberg, it is more economical to blow his nose with a $20 bill than to find a restroom with kleenex. But for a lot of New Yorkers, a $20 bill might be the difference between having gas heating or groceries for a week. Even when a sin tax is a tax on everyone, it is still regressive.
There is hope for New York State, but not as long as it has people who govern it like William Tweed wannabes. The governor cannot claim that New York State will grow more prosperous from his plan without implying that his government is more a New Yorker than are the citizens it serves. New York's officials have never been shy about finding ways to spend its citizens' money. But as they did with Joseph Bruno, Eliot Spitzer, and Anthony Weiner, New Yorkers can send a message that they call their officials civil servants for a reason.