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The cure worse than disease? Try slots
Retired business editor Jack Markowitz's columns are published on Sundays and Thursdays. He can be reached via e-mail.
Second prediction: We will all be very sorry someday.
Mayor Tom Murphy's decision to seek "distressed" status for the city is made to order for legislative horse-trading.
City Hall is stymied by public employee contracts that are Pittsburgh's strait-jacket on democracy. There are millions in costs that could and should be cut -- but can't be. Unions won't allow it. Hence, revenues are needed, however suicidal in the long run.
This is convenient. Gov. Ed Rendell happens to have a revenue-raiser that could do good all over, wherever "distress" lowers the moral barrier. Legalizing gambling -- and taxing it -- has been the one philosophical constant of Rendell's erratic time in office.
The governor projects a mirage-like $1 billion in slot machine and casino levies to bring down real estate taxes, throw more money at public schools, and now help build a hockey arena and bail out US Airways, too! Why not? Money is "fungible." If more gets spent one way, less has to go another way. Pittsburgh's gnawing belly can be satisfied along with homeowners and teacher unions, provided a new food source pops up. Gambling taxes!
Never mind that these are a pass-through of people taxes -- from gambling losers. Politically, they're beautiful. Painless. Monied interests (read: campaign contributors) are all for them. And nobody with money to put where their mouth is, seems to be against them. Slots legalization would keep taxes "at home" that escape as Pennsylvanians flee across state lines for their pleasure.
Gambling, to be fair, is no official part of the mayor's rescue agenda. But the inevitabilities do pile up.
Murphy needs the money, Rendell foresees a thick slice from the "house" take on losers. Gambling operators are happy to pay. They're sure of fat profits anyway. And in the sausage factory that is the legislative process, the temptations to grind up, mash, mask and trade principle for a temporary fix will be powerful.
Hence, Prediction One, above.
As to Prediction Two, gambling will bring vast unintended consequences. It will further corrupt the politics of this declining state, which has lost its way among the clear direction signs toward growth: low taxes, good labor climate, transportation and schools.
It will make our poor poorer. Temptations will come right into their back yard that now practically require middle-class incomes to reach, at Las Vegas, Atlantic City, even West Virginia. It will sidetrack sales and taxes from existing businesses, jobs, recreations and family needs. And it will never go away; gambling payoffs to politicians will see to that. It is dead-end, wretched economics.
At this late hour in Pittsburgh's crisis, can our lawmakers still avert the cure that's worse than the disease?
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