The state's financial situation is bleak. Revenues are plunging, we can't raise taxes, the recession isn't going away, and legislators are making deep cuts into core programs. We have to find a way to generate new funding, but we're running hard into a wall of shallow politics and antiquated morals.
For Washington State, gaming and liquor are two revenue sources begging to be expanded. In Seattle, we're squandering millions of dollars in potential revenues. Our current elected politicians are willing to sacrifice jobs, education, and health care in order to avoid an open discussion on how to make money from things they publicly find distasteful. It's time we had an honest and open, mature conversation on adult entertainment.
Adult businesses, obviously, can have negative impacts. But as with any business, the state and city can mitigate these impacts by regulating them and ensuring that they operate safely and responsibly.
Washington currently makes no direct revenue from tribal gaming, a $1.6 billion dollar industry in this state. In 2005, Gov. Gregoire passed on a compact with the tribes that would have brought $140 million per year into state coffers. It's time to revisit this deal and get that money.
Minnesota is considering legalizing slot machines in bars statewide and the state estimates the expanded gambling would generate $630 million a year in new state revenue. In Pennsylvania, slots provided $616.5 million in revenue last year. With over 1.4 million more people in Washington State than Minnesota, and with a more aggressive licensing plan than Pennsylvania (where only 10 of 14 potential licenses are operating), Washington could see even more revenue.
Those two moves alone could generate at least a quick $770 million per year for our state.
Despite the recent loss of two poorly worded liquor-privatization measures, it seems clear that many people in this state would like more access to liquor during more hours. People---at least people on this side of the mountains---are frustrated with the lack of selection, frustrated by the lack of stores, frustrated by the ridiculous hours, and frustrated by the quality of service. So how about tripling the number of liquor stores in the state, operating them seven days a week and on holidays, and keeping them open later hours? If the state currently makes $200 million per year from liquor sales and taxes, I'm pretty sure we could double that amount.
If we go further, and get the state out of the liquor retail business entirely, licensing retailers in a limited way, keeping much of the markup we now get but expanding outlets, improving service, increasing product choices, and hiring cheaper non-union labor, we could see even more revenue from retail liquor sales.
How could the state make even more from liquor sales? Get rid of closing times. At the city level, existing closing times costs cities precious public safety dollars and are creating an unsafe scenario at 2am.
More, you say? Allow drinking in strip clubs. Tons of states do it, from Texas to our friends down in Oregon.
Without increasing taxes, we could raise some $1.5 billion in annual revenues for the state. These aren't short-term federal government bailout dollars, but long-term income to the state and city governments.
And that's not even considering at the secondary money that would come from additional sales taxes, increased tourism, construction and new jobs (in Illinois, just 9 riverboat casinos employed 7,083 people, and paid $495 million in taxes, 600 new liquor store means over 2,000 new jobs, etc.)
With this money we could:
• Fully fund the Basic Health Plan, which offers subsidized health insurance to 66,000 low-income individuals: $347 million.
• Fully fund the Disability Lifeline grant for the temporarily unemployable, which serves 28,000 people a month, and the Disability Lifeline Medical Program, which serves 21,000 clients who have a temporary disability and are unable to work each year: $327 million.
• Pay for all employee salary increases called for under Initiative 732 for K-12 and higher education teachers and school employees:
• Fund K-4 class-size reduction funds provided to school districts that exceed the state’s basic education allocation: $216 million.
• Cover more than a third of the $860 million needed for the Student Achievement Program under Initiative 728, which mandated smaller class sizes, extended learning time for students and professional development for teachers.
Without additional revenues, the state plans to cut all those programs in the next budget.
At the city level, we see more of the same.
In Tukwila, which has a population of just 18,000, the city made $4.2 million from gambling excise taxes in 2009-2010. In Kenmore, the now-closed 11th Frame card room, along with the attached Kenmore Lanes, generated the most tax revenue of any business in the city. Shoreline makes more than $3 million annually in gambling taxes. In Federal Way, the only card room in town, P.J. Pockets, is responsible for approximately $840,000 of the city's gambling tax revenues and employs about 120 people.
In contrast, card rooms are currently illegal in Seattle.
If the city changed the law, Seattle could open just four card rooms and make $4 million per year in gambling excise taxes. If the state allowed slots, more liquor stores, extended hours, and liquor in strip clubs, we could also generate millions more tax dollars and jobs for Seattle as these businesses open up and operate here.
The bottom line is that we're leaving tons of money on the table---money we desperately need for important government programs to make this state a great place to live. Money that other great cities like London, Chicago, Austin and our neighbors Portland and Vancouver, BC, rely on. Here, we're sacrificing education, health care and jobs to Prohibition-era values. We rejected these values in 1933. It's time to finally change the laws.
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