BCT Editorial – 4/2/06

This page was last updated on April 2, 2006.

No sure bet; Editorial; Beaver County Times; April 2, 2006.

Below is a detailed critique of the subject editorial.

“There they go again, spending money they don’t have.

“Last week, Gov. Ed Rendell and former Pittsburgh Steeler Lynn Swann, who will be his Republican opponent in November, announced their stands on funding for a new arena for the Pittsburgh Penguins.

“Swann supports the Isle of Capri’s plan to build a new arena for the Pittsburgh Penguins if it wins a state gambling license. He called the offer to build a $290 million arena a ‘win-win-win situation.’

“Rendell’s plan to fund an arena is a mix of slots revenue ($7.5 million in annual voluntary contributions from the company that wins the gambling license and $7 million from the state’s share of slots revenue), $2.9 million a year from the Penguins and $1.1 million a year in naming rights and food and beverage sales at the new facility.

“Our objection is not to using slots revenue to fund a new arena.”

[RWC] Note the editorial doesn’t distinguish between revenue types. As you’ll read below, the Isle of Capri proposal funds an arena from the profits earned by Isle of Capri and the Penguins. Mr. Rendell’s proposal relies heavily on taxpayer funding.

“However, we’re concerned that too many elected officials and taxpayers see slots money as a sure bet when, in fact, the state has yet to receive a penny in revenue.

“Before we start spending money we don’t have, doesn’t it make sense to see how much money is going to be available?”

[RWC] I don’t know if either of the proposals is feasible, but that’s not the point of my critique. My point is to show the editorial intentionally muddies the discussion, probably to protect Mr. Rendell.

The two proposals couldn’t be more different, yet the editorial leads us to believe they are similar. In one case, the people making the proposal plan to risk and spend their own money. In the other case, the people making the proposal plan to risk and spend someone else’s money.

From what we know of the Isle of Capri proposal, the new arena would be built completely with private funds.

From what we know of Mr. Rendell’s proposal, it will be funded at least partially by taxpayers. Mr. Rendell claims that is not the case, but “the state’s share of slots revenue” comes from a gambling tax. This revenue could be used to reduce other taxes, as gambling proponents have been claiming. As a result, at least $7 million/year comes out of taxpayer pockets for the new arena. And what’s up with the so-called “voluntary contributions?” If the payments were truly voluntary, who in their right mind would pay them? If the payments are truly voluntary, you can bet taxpayers will end up being the ones making the “$7.5 million in annual voluntary contributions.”