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January 24, 2013

Gabe Souza / Staff Photographer

Gov. Paul LePage

LePage's plan to cover budget gap with casino revenue questioned

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

AUGUSTA – The LePage administration is setting "a really bad precedent" by taking $14.1 million in casino revenues intended to benefit schools and using it to close the state's budget gap, a state Education Committee member said Thursday.

"These were carefully crafted and difficult compromises, with a social good coming out of what some of us would call a social ill," state Rep. Bruce MacDonald, D-Boothbay, told Education Commissioner Steve Bowen at a work session on the governor's curtailment order and proposed budget. "I think we're setting a really bad precedent."

Under the 2010 voter-approved casino law, Oxford casino must give the state 46 percent of net slot revenue and 16 percent of table game net revenue, which the state would then divvy up among various state agencies, primarily education.

David Heidrich Jr., a spokesman for the governor's budget team, said the $14.1 million includes about $3 million for hospitals.

The first casino payment to the state is due in June, Bowen said.

He said the intent was to build a year of reserve funds, so the state would distribute casino revenue already in hand instead of attempting to write a budget with only an estimate of what the casino revenue might be.

"Our thinking was to take the 2012-13 money and spend it in the next year, always staying a little bit ahead," Bowen said. "In principle, we wouldn't have wanted to have a budget calamity."

LePage has a $6.2 billion, two-year budget proposal and a supplemental budget designed to bring the state's current budget into balance. The $14 million in casino revenue is part of a $112 million supplemental budget that relies primarily on one-time budget fixes.

But using the casino revenue now to close the budget gap means the state will have to estimate how much casino revenue to count on in the future, Bowen said. They are projecting a similar amount for 2014, he said.

"So we're gambling a bit, for lack of a better term," he said.

When MacDonald asked if it was legal to take those funds away from education, Bowen said it was, because of the budget crisis and certain language in the law.

"So we're changing the law?" MacDonald asked Bowen.

"We are," Bowen answered, adding that it was a "one-time change."

Lois Kilby-Chesley, president of the Maine Education Association, called the move a "shell game."

"The Education Committee is doing its job questioning reassignment of casino money," she said. "Educators have had enough. We are sick and tired of having our students cheated. We encourage all Mainers to contact legislators and tell them we want schools to receive adequate funding."

Sen. Christopher Johnson, D-Lincoln, said he also was worried about setting a precedent of taking money earmarked for education and redistributing it elsewhere.

"They should not make those circumventions," he said after the meeting.

"It could be done at any point if they take a cavalier attitude toward laws," MacDonald added.

One problem, MacDonald and Johnson agreed, is that it's not clear where the money to make up the budget gap would come from if the casino money was restored. It could just be added to the cuts already facing Maine's schools, MacDonald said.

LePage's curtailment order already cuts nearly $13 million from state aid to local schools.

 

Staff Writer Noel Gallagher can be contacted at 791-6387 or at:

ngallagher@pressherald.com



State Rep. Bruce MacDonald, D-Boothbay



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