As Florida Eyes Resort Casinos As Cash Cows, Economists Warn Against Too High a Bet
FlaglerLive | December 11, 2011
Faced with a series of unanswered questions, economists said Friday they could not pinpoint how much money the state would rake in if Florida lawmakers approve a plan for three resort casinos.
The best guess: $455.7 million over the next four years. But the economists said the tax impact of the controversial casino plan is “indeterminate” because of the need to make key assumptions — a situation that led House economist Don Langston to describe the numbers as “pretty squishy.”
“I think there’s just too many assumptions that may be good assumptions, but there’s just too many of them,” Senate economist Jose Diez-Arguelles said.
Officials from the House, Senate and Office of Economic & Demographic Research have grappled in recent weeks with trying to figure out how much tax money would spin off from proposed bills that would allow up to three “destination” resort casinos in the state.
The discussions have included issues such as licensing fees, sales taxes generated from resort construction and the amounts that would be wagered. But the issues also have included potential losses in revenue from a state gambling agreement with the Seminole Indian tribe.
Some of the issues might appear easy to resolve. As an example, the economists estimated the state could bring in as much as $155 million during the 2012-13 fiscal year from application and licensing fees.
But that number assumes three casino applicants would be approved and that each would pay $50 million in licensing fees. If only one or two were approved, the $155 million total would plummet.
Also, economists focused on the potential of bringing in $60.6 million in 2013-14 and $102.9 million in 2014-15 as the casinos are built. The bills call for each casino owner to spend $2 billion on building and equipping the facilities, which would also include amenities such as convention space and shopping.
But Amy Baker, coordinator of the Office of Economic & Demographic Research, said she was concerned about the construction-related tax estimates because of uncertainty about the number of casinos and what she described as a “very ambitious” timeline for building them. Baker said the projects could run into delays because of issues such as permitting.
The casinos are projected to start operating during the 2015-16 fiscal year, with economists looking at the possibility of reaping $137.2 million in taxes that year. While the plan was designed to allow the casinos in Miami-Dade and Broward counties, it could also apply to other counties.
Though not a factor during Friday’s discussions, it appears almost certain the casino proposal will undergo changes. Senate sponsor Ellyn Bogdanoff, R-Fort Lauderdale, said this week she will propose changes, after members of the Senate Regulated Industries questioned parts of the plan, including a 10 percent tax rate on gambling revenues.
The House version, sponsored by Rep. Erik Fresen, R-Miami, has not been debated in committees. If either the House or Senate bills change, economists would have to look at the new versions to try to determine the impact on taxes.
–Jim Saunders, News Service of Florida