December 22, 2013

Chances of casino funds benefiting schools rise

Lawmakers take steps to avoid diversions of gambling revenue such as last spring’s raid by Gov. LePage to close a budget gap.

By Noel K. Gallagher ngallagher@pressherald.com
Staff Writer

Maine schools are on track to get nearly $5 million more than expected this year from the state’s newest casino, the first time casino money will directly benefit Maine’s K-12 schools.

click image to enlarge

A dealer hands out chips at an Oxford Casino blackjack table. The table games at the casino bring in about $100,000 a month for the state Education Department.

Photos by Shawn Patrick Ouellette/Staff Photographer

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Oxford Casino has already turned in more money to the state than the government budgeted.

Additional Photos Below

EDUCATION AND GAMBLING

How the state’s two casinos divvy up revenue for various educational institutions:

Hollywood Casino ~ Slot Revenue

2 percent to the University of Maine System for scholarships. As of September 2013, a portion of this is given to the Maine Maritime Academy for scholarships.

1 percent to the Maine Community College System for scholarships

Hollywood Casino ~ Table Games Revenue

None to education

 

Oxford Casino ~ Slot Revenue

25 percent to Department of Education for K-12 essential programs

4 percent to the UMaine system and Maine Maritime Academy, for scholarships

3 percent to Maine Community College System, for scholarships

Oxford Casino ~ Table Game Revenue

10 percent to Department of Education for K–12 essential programs

Source: Maine Gambling Control Board

Figures for December from the state’s Revenue Forecasting Committee up the state’s annual portion of Oxford Casino revenues for kindergarten-through-grade 12 education from an anticipated $13.6 million to $18.4 million for 2013-14, and lawmakers in Augusta say they’re keeping a close eye on the money to make sure the funds don’t get raided.

That’s because last spring Gov. Paul LePage used about $14 million from Oxford Casino revenue to close the state’s budget gap as part of a $112 million supplemental budget.

To head off a repeat of that, the Legislature’s Appropriations and Financial Affairs Committee added budget language requiring the casino revenue to go directly to the Department of Education, and prevent it from being earmarked for pet projects.

Lawmakers say they hope that will be enough to keep the money where it was intended to go, but pragmatists agree there’s no guarantee when it comes to spending state money.

“The problem is that, unless you’re really careful and prescriptive, money is fungible,” said Sen. Peter Johnson, R-Greenville, who sits on the Legislature’s Education and Cultural Affairs Committee

“You have to really be careful. I do know that a lot of people are watching that (casino revenue) money like hawks,” Johnson said. “I am. I want to see it used for the purpose intended.”

Rep. Matthea Daughtry, D-Brunswick, said it’s particularly worrisome since the money was unexpectedly rerouted once.

“This is what happens: A one-time diversion becomes a regular thing,” said Daughtry, who also sits on the Education Committee.

Under the 2010 voter referendum that approved Oxford Casino, 25 percent of the casino’s slot revenue and 10 percent of table revenue is earmarked for the Maine Department of Education. The first monthly revenue payments began in July, after it had been open a year.

But on the eve of the first payment, then-Education Commissioner Stephen Bowen notified the Education Committee that the LePage administration planned to divert the funds in a one-time move to close the budget gap, as part of the governor’s $112 million supplemental budget. If they rejected the plan, he explained, then the education budget would be cut by an equal amount, so either way, the funds wouldn’t be there.

The move surprised committee members, but they eventually voted 10-1 to allow the casino funds to go to the General Fund.

“As abhorrent as the decision was, it seemed better than the alternative, which was to cut additional currently allocated funds from (the General Purpose Aid for Local Schools),” a committee member, Rep. Brian Hubbell, D-Bar Harbor, wrote on his blog at the time.

How to spend the casino money came up again during the 2013-14 budget negotiations, when the governor proposed using it for specific education programs. In the end, the budget redirected the money back to the General Purpose Aid for Local Schools, which funds schools directly.

To hammer home the point, however, the Appropriations Committee added language on two specific points:

The casino revenue must go directly to schools, and local administrators must decide how to spend it – a direct response to LePage’s attempt to earmark it.

Certain legislative bodies must be notified 30 days in advance if there is any proposal to divert the money before it gets to the Department of Education.

Lawmakers say they are hopeful, but wary, that the language will safeguard the funds.

“I understand that language in the budget as being a plea on the part of the legislators at that point,” Hubbell said.

(Continued on page 2)

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Additional Photos

click image to enlarge

A dealer flips cards at the Spanish 21 Blackjack table at Oxford Casino on Tuesday.

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Slot machines at Oxford Casino generate $1.2 million a month for the state’s education department.

Shawn Patrick Ouellette/Staff Photographer

 


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