The popularity of video gaming in New York State is definitely not in doubt. Gov. Eliot Spitzer wants to transfer half of the money that communities now receive from popular video gaming machines at racinos --racetrack casinos -- next year,
...and place the funds in the state's general revenue coffers. That may mean a loss of more than $1 million used to reduce taxes in upstate Sullivan County, the village of Monticello and the town of Thompson, experts said.
According to Democratic Gov. Spitzer's new budget, state aid to 17 communities that comes from eight racinos, including Monticello Gaming & Raceway should be drastically reduced, and the funds should be funneled into other, statewide projects. Local government bodies get 3.5% of the earnings from the VGMs, of which 25% goes to the county and the other 75% to the local communities.
The governor wants to cut that amount in half in 2009-10, and in 2010-11 force communities to "justify their aid" levels in writing, a policy that likely will reduce the amount of funds that local governments receive even further. Funding for this year will remain the same, experts note, and Yonkers Raceway will be exempt from the changes because the community uses all its money for education.
The aid is intended to offset the infrastructure costs associated with operating a racino. "The problem with the program is, that amount of aid is not directly related to the cost associated with hosting a facility," says the governor's spokesman. "What we are trying to do is reform the program."
The jurisdictions of Sullivan, Monticello and Thompson received more than $2.3 million last year; Monticello and Thompson deployed most of their share to offset tax increases or for "road repairs," experts said. The communities will receive slightly less money.
"The initial reaction is that it appears the governor is trying to balance the state budget on the backs of the local taxpayers," says one government source, observing the governor is also proposing cuts in aid for state-mandated health programs. "What Sullivan County has done with VGM revenue is to reduce the county cost for the early intervention programs in public health. That deals with children with special needs, which the county is mandated to fund. If that were to be halved, the difference is going to have to be made up by increasing county property tax."
Sen. John Bonacic, R-C-Mount Hope, say he will try to defeat the legislation. "Reducing state aid amounts to a property tax hike," Bonacic says. "It is as simple as that."
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