The Coastal Sussex Interview – Pete Schwartzkopf, part 1

by Dave on June 5, 2009

As first seen in Coastal Sussex Weekly, May 21, 2009:

Coastal Sussex Weekly: What’s it been like so far as Majority Leader?

Pete Schwartzkopf: I think one of the advantages I’ve had is I spent 6 years in the minority. When you’re in the minotiry, you can’t take a party-line vote, because it gets you nowhere. Your’e basically sitting back, watching, critiquing what happens on the other side. Taking over the majority, I think the very first week was a very big wake-up call to me, because you’re no longer sitting in the cheap seats watching the show. You are the show. The bottom line is everyone is waiting on you to do something, and they’re waiting to see what you’re saying and doing to try and make things better.

That very first week was an interesting week. I learned a lot about our caucus that first week. We have six new members, which makes it even more difficult. They’re idealists and in some of these tough decisions we’ve had to make, they want to believe that everyone’s telling them the truth on both sides of the argument, and that’s not necessarily the case. Some of these new guys don’t know who to believe. Along the way at some point in time you have to trust your leadership. I think we’re at that point now after what we’ve gone through in the last few weeks. Keep in mind, this is the first time the Democrats have been in the majority in a quarter century. We’re all adjusting to our new roles, and I’m becoming more comfortable each week.

Sports betting was a huge challenge, because everybody said it couldn’t be done. Everybody said you couldn’t take that much from the casinos because they were such a strong part of Legislative Hall. We jokingly called it the lobbyist’s bill because there were a lot of lobbyists making a lot of money over the last few weeks of that bill.

I used it as an educational experience for the six new legislators. Basically I was trying to show them how misinformation starts in Legislative Hall. If you can’t beat a bill straight out with a better idea, you throw out misinformation about a bill, so that you start to create doubt in people’s minds about whether they should do that or not. The lobbyists did an excellent job of doing that with the sports betting bill. They painted a picture that Harrington was financially unstable. Harrington had their note called in, and they started to spread the rumor that Harrington had their note called in because of the financial instability. And that is not true. Harrington had their note called in because their note was with Wachovia Bank, and Wachovia was absorbed by Wells Fargo. As soon as that happened, they called all of their notes in. It had nothing to do with Harrington. We went into a meeting, and somebody came in and said “We can’t do this. Harrington’s unstable.” I asked where they were getting that from, and they said their note was called in. I tried to explain it, but it was already in their mind, and the lobbyists exploited that. They kept saying that Harrington was broke.

If you run a casino without any opposition and you’re protected by the state, and you’re running broke, then we need a new partner. That was my take the entire time. Don’t sit here and cry that you’re poor because you’re spending all your money. Harrington is a unique situation with a not-for-profit corporation that owns 76% of a for-profit company. So basically they’re taking all of the money out of it and pouring it into the fairgrounds, which is nice and admirable, but if you’re making, and I’m just throwing out a number here, $100 million in profit and you’re spending $99 million of it, don’t say you’re poor, because you’re not. The CEO admitted on the floor that they made almost $8 million profit after taxes. That’s after taxes, after the payout to the nonprofit corporation, after everything. I’d love to have a business that was protected by the state, where no competition could come in next to me, and make $7 million in my pocket every year. I’d love that business.

This has been one of the hard things so far. It’s difficult to keep people on the same page when you have so much misinformation going out up there.

CSW: You decided to be majority leader during the worst time in state government in 30 years. What is the prognosis for the budget right now?

PS: Let’s put this in perspective. I was on the Joint Finance Committee for 4 years. Last year, we were faced with a $200 million deficit and we thought it was the end of the world. We mad a decision to cut half and raise half in fees and things of that nature. And we thought that was the hardest thing we’d have to do up there. This year, we’re looking at 4 times that deficit, and to make it worse, the first $200 million we already cut last year was the low-hanging fruit.

CSW: Why not have an unbalanced budget this year?

PS: Let’s put it this way: we have a constitution that requires us to produce a balanced budget by the end of June 30. I don’t think anyone wants to mess with that. We can do it. We can do it. There’s a lot of hard decisions, bad decisions, tough decisions that we’re going to have to make. The newspaper article the other day showed areas of waste that we need to address, but not this year. Here’s the thing. We only have little more than a month left to do this. People are saying all of this about the state employee pay cut, but nobody wants to cut the state employees. Nobody wants to do anything to the state employees. We haven’t given them a raise in two years. Nobody wants to cut their salary. But if we have to, we will, to get to where we need to go. State employees account for 46% of the budget. Personnel costs are 46%. If you’re going to cut $800 million out of your budget, to make up the deficit, you have to hit the highest cost centers, which are state employees, education and health & human services.

The issue right now is we need to pass a balanced budget in the next month. We need to cut a lot of waste out and we need to start addressing the efficiency. The Governor has already started with the efficiency stuff. He’s told us in the State of the State that he’s going to be looking at the consolidation of school districts, but not until next year.

CSW: Are you confident that you can find enough to make it whole this year?

PS: Well, there’s a lot we’re going to have to raise as well. We can’t cut $800 million, but we can try to balance it out, like with the sports betting bill to bring $50 million-plus. And I think it’ll be higher than that once it’s in place. I think there’s a possibility of getting another casino in Millsboro, which will hopefully bring another $60 million into the state. I want to make the record perfectly clear: I am not pushing for gambling. I am pushing for the Del Pointe project in Millsboro for the jobs it will bring. It’s not just a casino. You have the racetrack, the casino, the hotels, the indoor waterpark, commercial establishments, movie theater, skating rink. It’s a destination, and it’ll be great for that area. The gambling’s just one part of it. It happens to be the financial engine part, but it’s one part.

From what I remember from the hearings, they were saying that Sussex County had an 8.9% unemployment rate and it’s the highest rate of the three counties, and the biggest part of that are construction workers. This project is a $515 million project. It will put five to six thousand people back to work over a three year period and then possibly over two thousand fullt-time jobs.

What irritates me is if we were looking at a company in Wilmington to bring 1,000 jobs to the Riverfront, we’d come up with every financial incentive we could. We have 5-6,000 here and all we have to do is say yes and they turn a shovel. They’re up for a vote to be annexed into the town of Millsboro on June 1st. The town wants them there. It’s a lot of money coming into the town in building permits, property taxes and the like. School taxes are $1 million a year coming in. These are things people need to look at. You can’t just say “I don’t want gambling” or “I’m morally opposed.” You have to look at the big picture. I’m not the devil here. I’m not saying we want gambling everywhere. I’m not saying that. I want jobs for the people sitting at home looking at their kids worrying about how they’re going to get money to put food on the table. It takes a lot to take a proud man or woman that’s worked to support their family to go sign up for Medicaid or food stamps. Putting people back to work not only puts money back in their pockets, it makes them feel good about themselves again. It makes them feel that they are the caretaker of the family. Right now we have a lot of people wo are struggling with that.  We’re fortunate on this side of the county. We don’t have it as bad as they do in the central and western part of the county. We have a lot of people out of work, and we have an opportunity to put a lot of these people back to work. All we have to do is say yes. And because some people want to protect the Harrington casino, they’re not looking at the big picture.

Next Week: Part 2 of our conversation with Rep. Schwartzkopf.

Comments on this entry are closed.

[CoastalSussex] on Twitter[Coastal Sussex] on Facebook[Our] RSS Feed[Our] Email