Friday, July 15, 2011

Judge Rules "No" But Gov & Legislature on Verge of Deal

Judge Gearin came down against the racetracks yesterday, though the negative ruling may prove to be a moot point as Governor Dayton and Republican leaders have apparently come to an agreement to end the budget stalemate and the resulting shutdown.  The larger issue is going to be getting the dogmatic hardliners on either wing of each party to fall into line and get the compromise passed.  That is not guaranteed.  While it’s possible to be up and racing by Sunday, it most likely will be Thursday – though even this could be in trouble if party leaders can’t get their caucuses to agree to the deal, sending everyone back to the drawing board.  Early news reports are that the earliest a special session will be called is Monday which would effectively cancel the weekend’s race cards.

Dayton reiterated his opposition to any “lights on” bill – a temporary funding bill to keep government running while the budget is sorted out - saying at the press conference announcing the deal that the “lights will come on” when the bills get passed.  It’s all or nothing and the all is not a slam dunk.

Canterbury and Running Aces have been lobbying hard for slots as a way to kill two birds with a single stone: a new, substantial revenue stream for the state and a boost for the state’s billion dollar horse industry.  Minnesota Public Radio’s Tom Schenk announced on Twitter that gambling is NOT part of the solution.  While the signs are not good, that doesn’t mean that it is still not possible to get into the final budget solution.  The next 24 – 48 hours are going to be critical to the tracks’ hope of getting a racino bill passed, though the odds appear to be pretty high.

I know right out of the gate that next part of this post is NOT going to make a lot of my racing friends happy.  Quite frankly, I am not particularly happy writing it, but fair is fair and Judge Gearin’s decision yesterday seems to this non-lawyer to be fair based on the way the law is written. I’m not happy with it and I do think there may have been a way for her to tap dance around it in order to keep the tracks running.  But here we go.

Gearin states in her memorandum accompanying the decision that, “After its review, the Court has not changed its opinion that the funds contained in the funds from licenses and other fees imposed by the Commission and deposited into the State Treasury…require a biennial appropriation from the Legislature before they can be distributed.”  She cites Minnesota statute 240.15 subdivision 6 that reads, in part, “Receipts in this account are available for the operations of the Commission up to the amount authorized in biennial appropriations from the legislature.”

She goes on to state that “Unlike some of the funds referred to in the Zoo statutes, there is no language that makes this a statutory appropriation.”  It’s a very strict interpretation, but appears to be the correct legal one.  Could she have been a bit more creative and interpreted this differently?  Probably, but as much as I don’t like the decision the only deep problem I have with it is that it took so long.  A more cynical person might think that it was timed to coincide with the budget deal.

Ultimately what needs to happen is that the next session of the legislature has to amend the financing language for the racing commission so that private businesses are never hamstrung like this again should the government not be able to get its act together.  There is no reason for this to have happened. All would agree that the commission was designed to be self-funded but it is equally apparent that the statute, as written, inserts action by the legislature – no matter how minor – into the process.  That needs to be fixed – and quickly.  Given the nature of the compromise it is very likely we could be in this same position in the next budget cycle.

So it is a mixed bag as we head into the weekend.  The track should be up and running, if not over the weekend, then by Thursday’s card, but its future still remains murky.

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