CT Towns Push for Bigger Share of Casino Slot Revenue

Municipal leaders from across Connecticut pressed Ned Lamont and state legislators Wednesday to reverse more than two decades of cuts to casino revenue sharing, arguing that a program designed to help towns pay for services has been quietly gutted while state coffers stayed healthy.

New London Mayor Michael Passero, who leads the Connecticut Conference of Municipalities, did not mince words at a morning press conference at the Capitol. “It was a great injustice,” he said, pointing to the 2002 decision by state officials to redirect casino funds meant for municipalities to cover state budget shortfalls instead. “That diversion has continued to this day, even though the state is much more healthier, financially.”

The numbers back him up. Connecticut will share just $52.5 million of its casino gaming revenues with its 169 cities and towns this budget cycle. That figure represents roughly 14 cents of every dollar the state pulls in from video slot machines at Foxwoods and Mohegan Sun, which are projected to generate about $365 million in tribal payments this fiscal year. Municipal advocates are calling for a 50-50 split, which would roughly triple what towns currently receive.

The contrast with the program’s origins is stark. When state lawmakers built their budget for the 1993-94 fiscal year, they expected $113 million from the newly opened Foxwoods and pledged 78 percent of it, some $88.1 million, to communities. Adjusted for inflation, that level of support today would dwarf what towns receive now.

Connecticut’s casino revenue arrangement has roots that trace back to the early 1990s. The Mashantucket Pequot tribe, following federal recognition, opened Foxwoods near the Ledyard-North Stonington border in 1992, initially offering only table games. Then-Gov. Lowell P. Weicker Jr. negotiated a compact the following year that cleared the state’s legal objections to video slot machines. In exchange, the tribe agreed to send Connecticut 25 percent of its slot receipts. The Mohegan tribe accepted identical terms when it opened Mohegan Sun in 1996 on sovereign land in Montville.

Weicker, despite his personal opposition to casino gambling, made a practical argument at the time. He believed the casinos would drive demand for social services, public safety infrastructure, affordable housing and other programs that fall largely on municipalities to provide. That logic, he argued, justified directing most of the state’s casino take directly to towns.

That logic, municipal advocates now say, still holds. What changed is the political will to follow through.

The current state budget, a $27.2 billion package, carries a projected General Fund shortfall of just $6 million. That gap amounts to one-fortieth of one percent of total spending. More telling, the state’s volatility cap program is holding back more than $1.8 billion in income and business tax receipts from the operating budget. Those reserves are more than 30 times the total casino aid flowing to all 169 municipalities combined.

For smaller cities like New London, the effects are not abstract. These communities sit near the casinos and bear the sharpest costs in public safety, social services and transportation infrastructure. The original premise of the revenue-sharing arrangement was that towns absorbing those burdens should get meaningful support. What they get now falls well short of that.

Municipal advocates have made versions of this argument before, with limited success. This spring, they are trying again, betting that the state’s strong fiscal position gives lawmakers less cover to say no.

Whether the General Assembly moves on the issue is unclear. State budget negotiations typically stretch into late spring, and casino revenue sharing tends to compete for attention with larger aid formulas covering education and general municipal grants. But Passero and other municipal leaders say the moment is right. The state is sitting on reserves that would have seemed unimaginable during the lean years when the cuts started. Continuing to shortchange towns under those conditions, they argue, is a choice, not a necessity.