What will John Hickenlooper do if his new appointees to the state gaming commission reexamine the casino tax cut he’s denounced and refuse to reverse it? What if they say it’s justified?
Will the governor sack them as he sacked their predecessors this week?
Will he apologize to the previous board?
I asked the governor’s spokesman if Hickenlooper discussed the casino tax with the appointees or extracted any promises about a possible reversal. He said no and no, although he added that the governor’s staff explained Hickenlooper’s views of the regulatory and business environment to the newcomers, whatever that might mean.
Even if the governor had extracted a promise, it wouldn’t be enforceable. The commission sets the casino tax, not the governor. Back in the early 1990s when the legislature tried to meddle with the commission’s authority, the state Supreme Court brushed lawmakers back, citing the constitutional amendment that brought limited gaming to this state. “The commission establishes the percentage and the General Assembly does not,” the court bluntly warned.
Don’t misunderstand: The governor has every right to dispute a decision of the gaming commission and even to replace its members. And I happen to think the governor, not the commission, has the stronger argument in the dispute over whether the tax should have been trimmed by 5 percent.
But you’d think the governor would resort to firings only when commissioner conduct or rulings were clearly out of line. And yet that’s not the case here, as the governor has acknowledged all along. There is a perfectly good argument for cutting the casino tax.
Gaming statutes require the commission to set taxes to “encourage business growth and investment in the gaming industry” and to help casinos “realize a fair and just profit.” With the industry reeling from collective losses for three years, the commission thought it had a duty to cut the rate.
Debatable? Yes. Despicable? Hardly.
Hickenlooper counters that some casinos seem to be doing just fine — Ameristar in Black Hawk, for example — while “some casinos are making major multimillion-dollar investments in one of the worst economic periods in our nation’s history.” The commission isn’t charged with guaranteeing profits for every operator; that would be absurd. And it is equally implausible to expect the commission to guarantee the industry an overall profit during an extended period of consumer anxiety and stagnant salaries.
The gaming industry’s net income may have dived in 2008, but it had been impressive as recently as the previous year.
When this controversy first erupted some weeks ago, Hickenlooper reminded me that sometimes an industry will be unprofitable because it’s overpopulated or because new investment is changing its business model. “In a healthy business eco-system . . . you expect new investment to roil the waters and maybe take a larger market share,” he said.
Yet however sound his argument, the fact remains the commission did nothing wrong. The governor could have replaced two of five commissioners anyway because of expiring terms. Instead, his action leaves the impression that the entire lot were in the pocket of industry.
Ironically, former chairman Meyer Saltzman (whose term expired) objected to the industry-backed Amendment 50 in 2008 because it limited the power of the commission to raise casino taxes. If he’s an industry patsy, what are we to make of the majority of Colorado voters who passed 50 into law?
E-mail Vincent Carroll at vcarroll@denverpost.com.
