Gov. Ralph Northam is proposing an amendment to legislation that would allow casinos by referendum in Virginia, in order to help fund school construction statewide.
The governor had until midnight Saturday to act on bills sponsored by Sen. Louise Lucas, D-Portsmouth, and Del. Barry Knight, R-Virginia Beach, to allow five economically challenged cities — Bristol, Danville, Norfolk, Portsmouth and Richmond — to hold a public referendum for residents to decide if they wanted a privately owned casino to operate there.
Northam wants to assign the state’s portion of new tax revenue on gaming to fund public school construction statewide, according to Carter Hutchinson, deputy policy adviser, who spoke with the Herald Courier on Saturday. Two other amendments are minor technical language changes.
“The governor is going to amend that provision of the bill that says roughly two-thirds of the [tax] revenue goes to the general fund,” Hutchinson said. “He is going to amend that language to designate the funding go to school construction, renovation and repairs. The language is going to be relatively broad, given the revenue from the casinos won’t start coming in for at least a couple years, probably more.”
Sen. Bill Stanley, R-Franklin County, has been pushing for a dedicated revenue stream for school construction. During the General Assembly session, he unsuccessfully urged legislators to tax electronic “skill” games for that purpose.
Stanley also unsuccessfully proposed a referendum on whether the state should issue $3 billion in general obligation bonds to go toward constructing, repairing or upgrading K-12 schools. A state study in 2013 found that more than three in five of the state’s school buildings are more than 40 years old.
During the General Assembly session, lawmakers backed measures that would let Richmond and the four other cities approve casino resorts that spend at least $300 million. Norfolk, Portsmouth, Danville and Bristol could approve casino gambling in referendums on Nov. 3. Richmond could set a later referendum because it lags other cities in picking a potential casino operator.
The Pamunkey Tribe has announced plans for a $350 million casino on Ingram Avenue at Commerce Road in South Richmond.
If voters approve the casinos, Colonial Downs would be compensated with up to 2,000 additional gaming terminals — including up to 1,650 in Dumfries in Prince William County — for the potential loss of almost half of its revenue from existing Rosie’s Gaming Emporiums in Richmond, at the company’s reopened horse track in New Kent County, and in Hampton and Roanoke County.
State lawmakers are scheduled back in Richmond on April 22 for the reconvened session in which they will take up the governor’s proposed amendments to bills passed during the winter session.
If they approve the Northam amendments, the legislation becomes law and communities could hold referendums. If the General Assembly rejects the amendments — to which it cannot make changes — the casino legislation returns to the governor to sign or veto.
The proposed policy amendment won’t specify details of how the funding would work, and it would only apply to gaming tax revenues coming to the state, Hutchinson said, not those designated for the localities.
Northam was expected to sign other legislation Saturday that sets up a bipartisan commission to examine school construction issues, look at all potential revenue streams (including casinos) — if this is approved by the General Assembly — and present its findings.
“The governor intends to put this marker down and say, when this revenue comes in, it should go to school construction, as determined by the General Assembly,” Hutchinson said.
A 2019 study by state Joint Legislative Audit and Review Commission forecasts the five proposed casinos could generate more than $900 million within five years.
“The total projections that JLARC made for 2025 is about $970 million that all the casinos collectively together might make in collective profit. With the tax brackets in the current bill, about $114 million would go to the general fund for the state and about $65 million of that would be broken up among those municipalities with the five casinos,” Hutchinson said.
Sen. Todd Pillion, R-Washington County, one of the patrons of the legislation, said Saturday he wants to study the proposed change.
“All along we’ve discussed the necessity of this project to ultimately be approved by local voters and have a positive impact on the local community,” Pillion said in a message. “We want revenues to be used for the benefit of our schools, roads and public safety right here at home.
“While I will be reviewing the exact implications of this amendment, this is a process that has been more than two years in the making. It’s time that we move forward and let the people have the final say.”