March 31, 2017
By State Reps. Robert L. Kosowski and Brandt Iden
Robert L. Kosowski, D-Westland, represents the 16th Michigan House District. He is the sponsor of House Bill 4060. Brandt Iden, R-Oshtemo, is chairman of the House Regulatory Reform Committee. He represents the 61st District.
Increasing state revenue is an issue that knows no partisan boundaries. Regardless of whether you are a Democrat, Republican or otherwise, Michigan's statutory revenue-sharing situation is concerning. Michigan has not fully funded its revenue-sharing responsibility since the 1999-2000 budget cycle. Since then, almost $6 billion has gone unpaid to our local cities, villages, and townships. This is hurting our municipalities and has to stop.
When this revenue-sharing formula is underfunded, Michigan's residents and its economy end up suffering; there are fewer police officers and firefighters serving our communities, street and sidewalk repairs are postponed, and recreation and library programs are reduced or eliminated.
Of course, the first issue with respect to raising revenue is where that extra funding will come from. Raising taxes is contentious and therefore, we have put our political differences aside and have come together to offer alternate solutions. One such option being considered by the House Regulatory Reform Committee is House Bill 4060.
Sports betting is illegal in a majority of states under the Professional and Amateur Sports Protection Act, enacted by Congress in 1992. Despite this prohibition, sports betting continues virtually unhindered. The American Gaming Association estimates that nearly 97 percent of the money wagered on the Super Bowl this year was done so illegally. Nevada, a state authorized under PASPA to have sports betting, generated $132.54 million from that one game.
Recently, New Jersey challenged the ban on sports betting and has appealed its case to the Supreme Court. The state argues a federal ban is in direct conflict with the Tenth Amendment, which states that any "power not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to the people." The Tenth Amendment was included in the Bill of Rights to further ensure "a balance of power between the federal government and the states," according to the National Constitution Center.
Because the Constitution does not specifically mention that sports betting is illegal, it is therefore unconstitutional for the federal government to ban that practice.
While the Supreme Court has requested input from the solicitor general of the U.S. on the legal merits of the case, many states like Michigan are preemptively introducing legislation in the event that the betting ban is found unconstitutional. California could see an estimated $1.3 billion in revenue from legalization, while New York could see around $900 million.
Michigan's population is roughly half the size of New York's, so it is reasonable to estimate $300 million to $500 million of extra revenue here each year. These funds could be specifically directed toward our municipalities and the crucial services they provide. It is money that can be put back into our schools, our roads, and our infrastructure.
Sports betting is already happening in Michigan -- people are just doing it through illegal bookmakers. Right now, the only people benefiting from sports betting in Michigan are criminals. Regulating sports betting would ensure that it is safe while also capturing additional revenue. Further, this issue is not only about increasing revenue and protecting citizens, it will also grow our state. Allowing sports gaming would undoubtedly increase tourism. Restaurants, visitor attractions, shopping areas and more could draw a broadened clientele, which will grow the economy and increase job opportunities.
The bottom line is this: House Bill 4060, which allows legal sports betting, could grow Michigan's budget, help protect Michigan's residents, grow Michigan tourism and contribute to job growth. Specifically, the positive impact to our budget could benefit all municipalities and our citizens. These are the bipartisan ideas we need to support in order to improve our state without asking our citizens to pay more.