First, from James Nash:
Yesterday, Strickland aides released a series of proposed rules governing the racetrack slot machines that include a schedule of payments due and penalties for scofflaws.
In addition to the direct payments to the state, the rules require track owners to make $80 million in improvements to each facility, including $20 million in the first year.
The rules also would allow the racetrack casinos to be open 24 hours a day, seven days a week.
Tracks must submit applications for permits to operate slot machines, along with a business plan, to begin May 1, 2010. The business plans would be treated as trade secrets and not publicly released, according to the Strickland administration’s rules.
Strickland is counting on most of the machines running by May 2010 so the state can realize $933 million in licensing fees and profits that it needs to balance its two-year operating budget.
However, the timeline and financial projections could be threatened. A group of conservatives, LetOhioVote.org, has sued in the Ohio Supreme Court to force the racetrack slots to a public vote in November 2010.
In addition, a partnership of Cleveland Cavaliers owner Dan Gilbert and Penn National Gaming Inc. is backing a ballot measure this November that would authorize new casinos in Cleveland, Columbus, Toledo and Cincinnati.
For those of you keeping score at home, VLTs are what Gov. Strickland balanced the budget with, in addition to using the unconstitutional tobacco settlement which dates back to Attorney General Betty Montgomery. But the courts are saying “NO.”:
The Strickland administration will mount an appeal to a Tuesday court ruling that would prevent the state from using $230 million in smoking prevention funding to help pay for home-care services under Ohio’s latest budget.
Franklin County Common Pleas Court Judge David Fais’ decision bars the state from touching $230 million from the dissolved Ohio Tobacco Prevention Foundation. The battle over the money began in April 2008, when Gov. Ted Strickland outlined plans to use tobacco foundation money to partly finance a $1.57 billion jobs stimulus plan in the state.
With the money frozen while the legal fight played out, the state shifted the intended use of the cash to optional Medicaid services, a children’s Medicaid expansion and cancer screenings, said Strickland spokeswoman Amanda Wurst.
In my interview with Ohio AG Rich Cordray, he defended the state’s spending, saying esentially that because health care services for smokers costs the state money which was directed from other state services, Ohio can spend the money on whatever the hell it wants to. Apparently, the courts don’t agree.
Instead of leaving budget debates until 2011, when Ohio will have to figure out what to do with the $7-11 billion dollar deficit Ohio will have, LetOhioVote.org and other reasons for delays in VLTs (not to mention that they, like Keno, will underperform), in addition to the courts stopping the use of tobacco funds, could mean that Gov. Strickland might have his hand forced to make tough decisions. And while Strickland’s alternative answer might very well be a tax hike, a new budget debate would finally allow the Ohio House’s Republican minority to be heard on their ideas to reduce the number of government workers and reform unsustainable pensions.
In related news, as of yesterday, MTR’s stock price is down, which means MTR lobbyist Chris Redfern is slightly less filthy rich.