This article originally appeared in the San Antonio Express-News on 4/26/2013.
There's another effort to expand gambling in Texas to boost state government revenue. This time, Senate Joint Resolution 64 aims to raise $2.9 billion for the state.
But Texas, with an $8.8 billion surplus and an Economic Stabilization Fund balance expected to hit $11.8 billion by 2015 on the strength of $3.6 billion in additional revenue, doesn't need to extract more tax revenue from Texans.
SJR 64 generates revenue from the licensing of 12 casinos at existing racetracks, three casinos in large urban areas, three casinos in the Gulf of Mexico, and gaming on tribal lands. To regulate all of this new gambling, a new government agency would be created: the Texas Gaming Commission. Casinos would be taxed as high as 20 percent on gross revenue (the house always wins — unless government is involved).
If the state revenue figures for SJR 64 are accurate, the bill presumes $18 billion in new yearly gambling activity, a little more than four times the state lottery's annual sales of $4.2 billion.
For passage, SJR 64 requires a two-thirds vote in each house as well as approval by Texas voters.
But expanding gaming under strict government limits is not good public policy. More government revenue will only encourage the expansion of government power and bureaucracy,
Further, SJR 64 doesn't allow a free market. After its passage, no one will be able to simply set up their own card room, racetrack, or casino and pay Texas taxes just as any other regular business. Rather, a tightly controlled group of operators, most of whom already run gaming establishments in Texas, will be allowed to expand under the regulatory protection of the State of Texas.
Lastly, a limited expansion of gambling in Texas wouldn't serve the public. Gaming revenue and jobs projections rarely match the hype. Extensive research shows that there are unintended, hidden costs to gambling, such as increased unemployment and welfare, more arrests, higher incarceration rates, more bankruptcies, greater health problems and more divorce.
Rather than seek to hike state government revenues, which are growing at a greater pace than population and inflation, lawmakers should instead work to cut taxes to return money to the hard-working Texans who earned it.
There are several bills in the Ways and Means Committee dealing with tax cuts. Chairman of the House Ways and Means Committee, Rep. Harvey Hilderbran (R-Kerrville), has been working with members and outside interested parties to determine the best approach to getting tax cuts this session.
Reducing the state sales tax by 3/8ths of a penny from 6.25 percent to 5.875 percent, would result in a 6 percent rate reduction and would return $3.3 billion to the taxpayers over two years — slightly less than the expected accumulation in the Economic Stabilization Fund.
With budget surpluses and the continued growth of the Economic Stabilization Fund, it's time for Texas to reduce its tax burden to spur added growth and opportunity, sending a strong message across America that Texas is serious about reinforcing its successful formula for prosperity.