MAYBE IT WASN'T MISLEADING AFTER ALL: They eliminated "roads" from this casino amendment promotion because it didn't dedicate taxes to roads. But the plan now says most of the money will be spent that way, to the detriment of general state services.

Michael Wickline of the Arkansas Democrat-Gazette
reports today on a state revision in financial estimates to support Gov. Asa Hutchinson’s plan to raid casino tax revenue to help pay for his highway construction plan, along with increases in sales taxes. To cut through the statistical clutter: This is a permanent and significant raid on general revenues for highways.

Here’s how it goes:


* Through the fiscal year that ended June 30, the tax on existing casinos at Oaklawn and Southland produced $64.3 million for general revenues (schools, public safety, prisons, social services.)

* The casino expansion amendment adopted in November dramatically cut the state tax on casino gambling. That’s expected to cut general revenue by $36 million a year this year and next year on existing gambling. That’s money lost to schools, prisons, public safety and social services.


* Sometime in 2021, a new casino is expected to begin operating in Pine Bluff. Oaklawn and Southland plan casino expansions. So, the state thinks gambling taxes will increase. No doubt. But remember: The state tax rate is much lower.

* According to adjusted figures, it will take until the fiscal year ending June 30, 2028 before the gross state tax take will hit $74 million. We are years away, in other words, from matching last year’s tax flow from casinos, a loss to general revenues every year.


* Meanwhile, the governor is promising $35 million a year in casino revenue for highways.  It might be a while before the casino tax hits that level and he’s prepared to make up the shortfall with the surplus he maintains rather than spending it on schools, public safety, prisons or social services.

* Bottom line: Casino gambling that had been producing $62 million a year for schools, public safety, prisons and social services is capped FOREVER at $31 million a year for those purposes. The rest, whatever it might be, will go to casinos. And if the new, lower casino tax isn’t enough to provide the $35 million Asa has promised for highways, he’ll take THAT money from general revenues, too.

Like it or not, the disingenuously promoted “Driving Arkansas Forward” casino campaign, pitched as a source of money for roads when the amendment did NOT dedicate the tax for that purpose, WILL be a source of money for roads. But it will be to the detriment of every other state service.

Other components of the governor’s plan to fatten pockets of the highway construction lobby is to make permanent a regressive temporary half-cent sales tax for highways and to impose a new sales tax on motor fuel. Thank goodness the millionaires are getting an income tax cut to help them cover these new taxes. Poor folks? Not so much. Maybe they’ll get lucky at one of the casinos.