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The pending casino bill is, at bottom, all about jobs

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Judy Diogo, Rich Heffron and Mark Kleinschmidt 7:01 p.m. EDT June 4, 2014

Employing more Delawareans remains the key in propelling our state forward.

We applaud the herculean efforts put forward by elected officials to keep GM, Chrysler and Evraz Steel open. These facility closings represented thousands of local jobs, which didn't seem to faze their out-of-state (and in one case, out-of-country) corporate leadership.

Delaware faces serious and fundamental issues related to jobs and its economic future. Continued strong leadership and working toward thoughtful solutions are paramount to success.

We face another jobs issue. This one will be decided by companies whose leadership is located in Delaware. Delaware casinos employ more than 4,000 people and do business with over 500 Delaware businesses.

The Delaware casino industry has provided $3.2 billion to the state's general fund through its unique revenue sharing structure. As we understand the arrangement, the state receives 43.5 percent of each casino revenue dollar.

The state collects an additional 10 percent tax to support the horse racing industry and another 9 percent to cover the cost of slot machines and related monitoring systems, for a total of 62.5 percent of every casino revenue dollar.

The remaining 37.5 percent goes toward helping the casinos to pay for payroll, operating expenses, capital investments and all other operating expenses, as well as for all other Delaware taxes every business pays.

Delaware casinos do not receive taxpayer funding.

In 2009, to help fill the state's $800 million budget deficit, Delaware raised the state's share of revenue from 37 percent to 43.5 percent (a 17.5 percent increase).

All Delaware businesses had tax increases in 2009, but few as high as the casino increase.

To prepare for increased regional competition, Dover Downs invested $100 million for expansion.

The other casinos also invested money prior to the Delaware tax rate increase. Even with the 2009 tax increase, casino competition from larger, neighboring states has reduced the state's casino revenue.

We went from a region with 15 casinos to one that has 31, and will add two more in the next two years. Delaware casinos now face the highest tax rate of any direct competitors.

We realize Pennsylvania and Maryland entered the casino business and built their casinos near densely populated areas with high levels of household income. Given the significant number of casinos today, convenience does make a difference.

The neighboring states' casinos are not necessarily better built nor better managed, but they benefit by being closer to large population centers.

So why do we care? It's simple – maintaining the status quo will likely result in job losses.

Tremendous effort to preserve Delaware jobs, and to bring new jobs to the state, has already been expended. We believe a similar effort needs to be put forward in this case.

Current legislation to save Delaware jobs is pending. Some have labeled this legislation a "bailout" – and we respect their opinions – but the reality is, this legislation is similar to other tax relief bills designed to save or create Delaware jobs.

Common ground needs to be found to preserve Delaware jobs. Few Delaware industries support as many as 4,000 direct jobs and 500 more business partners.

This time around, the decision-makers are local, and they want to save jobs.

If nothing is done, Delaware's three existing casinos will survive, but they'll likely employ less people.

We urge the General Assembly to make the decision to support Delaware jobs.

Judy Diogo is president of the Central Delaware Chamber of Commerce. Rich Heffron is president of the Delaware State Chamber of Commerce. Mark Kleinschmidt is president of The New Castle County Chamber of Commerce.

Read or Share this story: http://delonline.us/1hbvEGk

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