Casino

Casino supporters yesterday reminded Rhode Islanders of their central argument: the proposed West Warwick gambling resort would provide millions of dollars in property-tax relief.

The casino proposed by Harrah's Entertainment and the Narragansett Indian Tribe would provide the state with $681.2 million in its first six years of operation, according to a report by University of Massachusetts-Dartmouth Prof. Clyde W. Barrow.

That equates to $318 annually for each taxpayer.

The report, which mostly rehashes old information, was released hours before the Rhode Island Public Expenditure Council -- a casino opponent -- released its own study saying the casino would devastate business at Lincoln Park and Newport Grand, creating a major state budget shortfall. The release date of RIPEC's report was widely known.

"It's time to put an end to Rhode Island's high tax burdens," Narragansett Indian Chief Sachem Matthew Thomas said in a statement.

Barrow was paid $20,000 to produce the study for the Rhode Island Building & Construction Trades Council, a group representing construction unions that have long backed the proposed casino. In 2004, Barrow was hired by the state Senate to study the casino proposal. He also did work this year for the House Finance Committee.

There is no legislation spelling out how much money Harrah's would pay the state if voters agree on Nov. 7 to change the Constitution to allow the casino.

But Barrow and just about every other researcher has used legislation passed in 2004 as their base for a tax rate. In that proposal, Harrah's offered to pay the state $100 million for the exclusive Rhode Island license and a tax rate starting at 25 percent. By comparison, the state gets a little more than 60 percent of revenues from Lincoln Park and Newport Grand.

The proposed constitutional amendment calls for the casino's tax revenue "to be dedicated to property-tax relief" but doesn't say what that means or how the money would be distributed.

Barrow outlines two ideas: direct credits on income taxes or increased aid to cities and towns.

He said the "simplest and preferred" way to guarantee equitable relief is through the income tax credit. He said that if extra money is given to municipal governments there is no guarantee that savings will be passed on to all taxpayers. By giving a credit on tax returns, he said, renters and homeowners would see the benefit of a casino.

Barrow estimated that by the fifth year of casino operations, those payments would be $318.

All parties agree that Harrah's would draw customers away from Lincoln Park and Newport Grand. Slot machines at the two facilities provided the state with $255.7 million last year.

Nobody agrees on how much of that money would be lost because of a casino, but Barrow added his estimate to the mix yesterday -- the lowest to date. He predicts an 8.8-percent drop in Lincoln and 13.9-percent in Newport.

Barrow also looks at something no one else has yet: how many jobs the casino would add to local businesses and auxiliary taxes it would pay.

By the sixth year, he said, the casino would provide $1 million in hotel taxes, $4.2 million in sales taxes and $3.3 million from employee income taxes.

The job numbers aren't quite as clear.

Harrah's has been saying for months that the casino would create 3,800 new jobs and 3,500 construction jobs.

But news releases about the report yesterday said conflicting things.

Chief Thomas said: "The study also documents that the casino will be a fiscal and economic engine, creating nearly 6,000 new jobs, stimulating small business and tourism growth."

But Michael Ruggieri, president of the Building Trades, said that casino spending at local businesses will create 824 local jobs, "pushing to 10,000 the number of new jobs that the" casino will generate.

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