Thursday, March 5, 2009

State Might Cut Funds to Areas Hosting Racinos by Victor Whitman - - The Times Herald Record

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Gov. David Paterson proposes to yank half the state aid to all communities, except Yonkers, that host racinos — a move that could take away roughly $900,000 combined from three governments in Sullivan County.

Money would be taken from 17 host communities, including Sullivan County, the town of Thompson and the village of Monticello, where the Monticello Gaming & Raceway's racino is located. The state gives a percentage of the "estimated net machine income" from the slots-like video lottery terminals to the host county and communities.

In 2008-09, Thompson was paid $906,436; Monticello, $416,006; and Sullivan County, $440,814.

Yonkers would not be affected because it pumps all its aid money into city schools.

Other communities, like those in Sullivan, receive more than they need to offset the costs of having a gambling operation in their backyards, said Matt Anderson, spokesman for the Division of Budget.

"It has no relation to actual VLT-related costs, which is the intent of the funds," Anderson said.

Former Gov. Eliot Spitzer also tried to do this, but the state Legislature rejected it. Assemblywoman Aileen Gunther, D-C-Forestburgh, said she'll fight against a change.

"I think the host communities deserve that portion of the money," she said. "That was part of the deal for having them. I don't think we should be deal breakers, but deal makers."

While Thompson Supervisor Tony Cellini said the town purposely left the money out of its budget, viewing it as "a cushion," he also noted the state would be breaking a promise. One purpose of the aid, aside from offsetting the negative impacts of a gambling operation and aiding education, was to provide property tax relief.

"This is why it is difficult to deal with the state of New York," Cellini said. "Even if you have a negotiated agreement, they don't honor it."

Statewide, this move would save $7 million. The state believes it will save another $2 million by freezing the aid; that is because several communities have racinos with increasing revenues, and thus were going to receive more VLT monies this coming year. The state also wants to make New York City ineligible for aid from Aqueduct racetrack.

The budget office estimates these moves will save $29 million in 2009-10 and $30 million in 2010-11.

That money would be used to pay down the $14 billion deficit.