House speaker slams casino relief bill

 

DOVER — The casino relief bill will get a committee hearing in the House. What happens after that is unknown.

Following the passage of Senate Substitute 1 for Senate Bill 144 Thursday, House Speaker Pete Schwartzkopf, D-Rehoboth Beach, blasted both the measure and the process behind crafting it.

Seeking to send a message to fellow lawmakers and the governor’s office he didn’t mince words when speaking to reporters in his office.

“At what point do we guarantee them a certain profit?” he said of the casinos. “For years and years and years, we guaranteed them a certain profit. We kept every bit of competition away from them. We wouldn’t let anybody even come to the table. You go all the way back to ‘94, when they went into place — I mean, they limited competition by saying you could only have a casino if you had an active, working racetrack, and there were only three in the state.”

The bill would slightly lower the tax rate on slots, eliminate the table game license fee and halve the table game tax rate. Thursday’s passage in the Senate, by a 17-3 vote with one member abstaining, is the closest the state’s three gambling establishments have come to substantial reform in years.

That reform, they say, is long overdue.

“The competition is no longer the problem. Management has never been the problem,” Sen. Brian Bushweller, D-Dover, said Thursday. “The problem is how much money we take from the casinos.”

Pete Schwartzkopf

As a result, he said, thousands of jobs are threatened — especially important in Kent County, where Dover Downs is the second-largest private employer.

But while Rep. Schwartzkopf acknowledges that fact, he believes the measure goes much too far. The speaker said he is willing to make changes to the table game tax rate and license fee but not the slot tax rate.

For him, the fact the bill would cost the state about $15 million in the first year and $20 million afterward in lost revenue makes it a nonstarter.

“Our job is to provide services and to put a budget together and not guarantee people a certain amount of profit,” he said. “So what we’ve done right now is taking $20 million out of our budget when it could have been $5 million or it could have been $6 million and the rest of that money could have stayed in our budget. The casinos have give us a lot of money over the years, but they’ve also made a lot of money over the years.”

Noting Dover Downs lost $1.1 million in 2017, he questioned why the state was providing them with a bigger tax break.

The bill could cause Delawareans to miss out on vital services, Rep. Schwartzkopf said. Further compounding matters for him is that the budget is unsettled and will remain so until at least late May, when the state’s updated revenue projections are unveiled.

Noting legislators last year reduced nonprofit funding through the grant-in-aid bill from $45.9 million to $37.2 million, he said he would be open to a compromise that gives the casinos a small tax break. Lawmakers would then have more money to use to undo the cut.

“How do we look somebody in the eye and say we’re cutting your budget, of which you help people?” Rep. Schwartzkopf said. “We haven’t even taken a vote to put the 20 percent in grant-in-aid that we took out last year. That’s more important, as far as I’m concerned, than giving them an additional $20 million.”

Rep. Schwartzkopf is also unhappy with the way the bill was drafted. According to him, the House was excluded from negotiations involving the governor’s office, the casinos and the Senate.

“This has been a total breakdown in communication,” he said in one of his harshest critiques.

While Rep. Schwartzkopf noted he could kill the bill, he said he would not do so. Whether it still ends up passing the House has yet to be determined.

Gov. John Carney’s office did not respond to a request for comment about the process of negotiations, and efforts to contact the bill’s main sponsors Friday were unsuccessful.

Surprising vote

Sen. Robert Marshall, D-Wilmington, who has a reputation for making surprising votes that leave colleagues frustrated, left both Democrats and Republicans flummoxed when he voted with the Republican caucus on an amendment to a Democratic-backed bill.

For the second time in four weeks, Sen. Marshall broke with his caucus, leading to Democrats calling for a closed-door meeting and ultimately not voting on the bill in question.

At issue Thursday was a complex bill that would create a clean energy financing program and allow a state-supported nonprofit to issue debt to finance projects. The bill is fiercely opposed by Senate Republicans, who, among other things, believe it requires a supermajority vote.

The Delaware Constitution notes “No appropriation of the public money shall be made to, nor the bonds of this State be issued or loaned to any county, municipality or corporation, nor shall the credit of the State, by the guarantee or the endorsement of the bonds or other undertakings of any county, municipality or corporation, be pledged otherwise than pursuant to an Act of the General Assembly, passed with the concurrence of three fourths of all the members elected to each House.”

Democrats argue the measure needs only a simple majority, and a Senate attorney has supported their view.

That hasn’t stopped Minority Whip Greg Lavelle, R-Sharpley, from introducing amendments that would raise the vote threshold needed for the bill. Because Democrats control the chamber, they can kill any Republican proposal — in theory.

Thursday, Sen. Marshall went against his caucus, voting with the 10 Republicans in support of an amendment adding a three-fourths requirement to the bill.

His vote caught people off-guard, so much so that Lt. Gov. Bethany Hall-Long announced the amendment had failed.

After Republicans called for a point of order, she corrected herself, and Majority Leader Margaret Rose Henry, D-Wilmington, immediately announced the chamber would break for private caucus meetings.

The Senate did not vote on the measure when it returned.

Sen. Marshall also went against his caucus last month, when he said a Republican amendment to a gun control bill “seems to be good common sense.” As she did Thursday, Sen. Henry then called for a halt so senators could convene in private. That bill has yet to be voted on.

Staff writer Matt Bittle can be reached at 741-8250 or mbittle@newszap.com. Follow @MatthewCBittle on Twitter.

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