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Friday, October 03, 2008

Skelos Pushes Gov on Big A

- Legislative leaders in New York have agreed to convene a special session on November 18 in an attempt to come up with budget cuts of $2 billion. That's almost inconceivable if you recall the agonizing effort it took to slash a mere $427 million in an extra session in August. Who knows what the politics of such a November session would be. It's entirely possible that Senator Skelos and his Republican conference could be a lame duck majority at that point, which could make it further unlikely to achieve the desired savings. Or maybe not, who knows?

The Division of the Budget released a mid-year budget update, which includes a chart which boils the situation down to a form simple enough for even Governor Tinafeylin to understand.

Tom Precious reports for the Buffalo News that Skelos, at today's public session, urged Governor Paterson to name an operator for the Aqueduct racino already. Gosh, what's taking so long? And the writer noted that the Buffalo-based Delaware North has offered $370 million up front. Their high bid on the downpayment has to give them an advantage in this environment, even if their eventual development plans are less ambitious than the others. In fact, they've pledged no investment beyond the licensing fee at all, relying instead on $250 million to be raised by the state through a bond sale for the construction. On the other hand, Capital Play's lowballing of the licensing fee - offering just $100 million - makes them a 100-1 shot in my view. Bad timing for them....and perhaps for the rest of us as well, given the large investment in marketing that they have promised.

You can see the DOB's full mid-year budget report here [pdf warning]. In the other issues section, it reads:

Other financial transactions that were expected to provide the state with $300 million in additional revenue – the conversion of GHI/HIP to a for-profit company ($200 million) and the sale of certain surplus state properties ($100 million) – are no longer expected to occur during the current fiscal year because of adverse market conditions.
So if the market conditions are as of yet adverse enough to exclude the racino, that has not yet been factored into the equation.


Anonymous said...

geez what a mess! Alan, you're making Del North the favorite and Cap Play is 100-1, what do you think S.L Green's odds might be?

Anonymous said...

Alan, do you think the $250M state bond is feasible in this market?

Might be another monkey wrench.