Dunleavy’s only selling point – legalized gambling – may never materialize

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The biggest problem facing Gov. Mike Dunleavy’s proposal to constitutionalize the dividend is the structural deficit of over $ 1 billion his proposal would create and the uncertainty as to how it would be addressed. Most expect a deficit of this magnitude to require a combination of deep cuts and high taxes, which the Dunleavy administration would very much like to talk about only after the state locks the PFD into the constitution. .

Pressed by lawmakers less willing to adhere to his “Come on, trust me” plan, his administration only proposed vague details about “the new tax measures are very different from any tax we have seen in Alaska” with only the details of a proposal to legalize gambling in Alaska, a move that raised eyebrows for its potential social impact and what would probably be a drop -income in the bucket.

But according to a hearing today, that proposal may never happen.

Assistant Revenue Commissioner Mike Barnhill made the admission at today’s House Ways and Means Committee meeting. He told the committee that the state had hired a contractor (for nearly $ 400,000) to assess income potential and was preparing “a socio-economic study” to be released later this fall along with “potential legislation.” , which would presumably be the August special. session.

Barnhill anticipated questions about this potential legislation by adding, “I have no update on the details of when this legislation or even if this legislation will be introduced at this time.”

The administration said virtually nothing about the gambling proposal or any other revenue proposal during this year’s session, arguing instead that the state must first spend the dividend before addressing any less popular issues like cuts and taxes. However, previous estimates produced by the Dunleavy administration have not painted a particularly bright picture of gambling revenue.

In a presentation given in May 2020, the administration estimated that gambling hall taxes would generate only $ 2.3 million per year, while a full suite of gambling games like daily draws, instant lotteries like scratch cards and video lottery terminals could bring in up to $ 135 million per year. This comprehensive set of gambling measures was proposed by Governor Dunleavy in the 2019-20 legislative session (and was not reintroduced this year), but it failed to gain traction in the legislature. .

This year, legislative leaders have expressed little enthusiasm for legalized gambling, noting its unknown social costs.

“I am not interested in legalizing gambling, I am not interested in legalizing prostitution to solve the problem,” said Senate Finance Committee co-chair Senator Bert Stedman, R-Sitka, during a hearing this session. “So we’ll see what happens on the table. ”



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