ANALYSIS: ‘Proposition A’ casino revenues would not reach 27 percent of Missouri students

Sunday, October 5, 2008 | 5:58 p.m. CDT

JEFFERSON CITY — The ballot measure called the "Schools First Elementary and Secondary Education Funding Initiative" would not provide funding for Missouri's largest school districts.

In fact, about one-quarter of Missouri's public school students attend class in districts that are projected to get nothing next year from the ballot measure.

At issue is the item titled Proposition A on the Nov. 4 ballot. It repeals Missouri's nationally unique loss limit, which bars gamblers from buying more than $500 of chips or tokens every two hours. It raises taxes on casinos, and it caps the number of casino licenses that can be granted in Missouri.

With the repeal of loss limits, the Missouri Gaming Commission projects that casinos will increase their revenues by about 30 percent.

As a result of the larger tax base and higher tax rate, the Missouri auditor's office estimates that K-12 schools will receive between $105 million and $130 million annually, and that other state and local government programs will also have access to more money.

A study being released today by ballot measure supporters projects larger figures. It estimates the increased K-12 money at between $126 million and $144 million, because it accounts for two new St. Louis-area casinos that weren't included in the state calculation.

The Department of Elementary and Secondary Education has projected a school-by-school impact of the ballot measure, should voters approve it.

According to that projection, the initiative would result in no new money next fiscal year for 115 of the state's 524 school districts, which teach 27 percent of all students. On the excluded list would be the state's largest districts of St. Louis and Kansas City, some big suburban districts such as Independence and Parkway, and numerous smaller school systems such as Craig, Norborne and the Delta district of Pemiscot County.

It's not that the drafters of the casino ballot measure intentionally excluded those schools. Rather, they wrote the initiative so that the new casino taxes would be distributed through the state's school funding formula adopted in 2005.

Among the many complexities of that formula is the fact that some school districts do not receive money through it. That's either because their local revenues place them above what the state considers an adequate amount of money to educate their students, or the formula would result in them getting less money than they got in the 2005-2006 school year.

So those schools are immune from state funding cuts and instead receive a separate state payment.

Because the initiative raises the amount of money deemed adequate for a good education, it's possible some of those currently excluded schools could fall below the higher adequacy target in the future and thus receive money from the casino ballot measure. But there's no guarantee of that.

Scott Charton, a spokesman for the casino-financed coalition sponsoring the ballot measure, acknowledges that not all schools are guaranteed a funding increase.

But "four-fifths of the districts are going to get new money without a tax increase — in some cases, millions" of dollars more, Charton said. He also notes that St. Louis and Kansas City schools stand to benefit regardless, because the casinos located there pay local taxes and spawn other businesses, which also pay taxes.

Yet some experts on Missouri's school funding method are concerned about the changes the casino initiative would make.

The current funding formula distributes money according to an "adequacy target" that is based on the average amount of money the state's best-performing school districts spend to educate their students. That formula so far has withstood a legal challenge from suing schools who claimed the state's K-12 spending was both inadequate and inequitable.

Sen. Rob Mayer, R-Dexter, an opponent of the initiative's loss limit repeal and chairman of the joint education panel, expressed concern that the ballot initiative could open the state to a new round of legal challenges against Missouri's school funding method.

"With this (initiative) petition, it appears to me adequate funding would be based not only on how much the accredited schools have spent on their education, but also on how much people lose at the gambling boat, which I don't think the court would find as a rational basis for funding," said Mayer.

Brad Ketcher, an attorney working with the initiative sponsors, neither agreed nor disagreed with the assertion that the ballot measure would make a philosophical change to Missouri's school funding formula.

He said the initiative intentionally was written to alter the definition of adequate school funding to help ensure the new casino tax revenues would, in fact, be treated as new revenues for schools — and not used to supplant existing state moneys, which would then be spent for other purposes.

"Our goal is to increase education funding," Ketcher said.


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Ray Shapiro October 5, 2008 | 9:02 p.m.

Anything that comes from collusion between the government and casino gambling policies is 1st going to benefit the casino owners, 2nd help corrupt politicians 3rd hurt those who frequent the casino, 4th hurt the families of those who frequent a casino and 5th any benefits from casino revenues helping education, create meaningful jobs or a better quality of life, for any one other than those at the top, is just another crap shoot!

(Report Comment)
Brian Demarest October 24, 2008 | 9:43 a.m.

As a former long time casino employee who has been through many of these propositions in Mississippi, Louisiana, and Missouri, rest assured, you are being scammed. It's the same bait and switch they use every time. They tell you it means millions more for schools, then they decrease funding from other sources.

There is NO net gain from casinos. The jobs they create are lost when business owners gamble away their businesses. The taxes they pay would have been earned from other local businesses; the dollars are just redirected to casinos causing even more local businesses to close.

They don’t earn their profits from high betting tourists. They “grind” the “fleas” for their profit. That means they earn the bulk of their profit from small local players. The smaller the bet and the longer you play, the more they make. They may benefit from tourists but they don’t attract them. There are casinos all over America. They aren’t “destinations” anymore.

I watched a 36 year old close two family restaurants after 50+ years in the family, fire over 40 employees, and commit suicide. I told the managers he was threatening suicide but they didn’t care or even speak with him. I watched a casino dealer inherit enough money to retire on, quit her job, and get caught a year later giving favors in the parking lot for $10 so she could gamble just a little more. These aren’t the exceptions; they are the rule for local addicts. Most of these addicts didn’t even gamble before casinos opened.

I’m ashamed of my time working in casinos. Teachers, school boards, and government officials who are supporting this will now share in my shame. When you look at the children you are claiming to help, remember that many of them will go hungry because their father gambled away his paycheck. Many will go homeless because their mother gambled away their mortgage payments. Many will be future addicts who will destroy themselves financially and gamble away their dreams. Some will even commit suicide in despair.

(Report Comment)
Ayn Rand December 5, 2008 | 8:59 a.m.

The prospect of losing revenue to the Kansas casino helped sell Prop. A. And now that casino has been scuttled. Was it a stalking horse all along?

"Only hours before the proposal was scheduled to receive final approval Friday from the Kansas Racing and Gaming Commission, casino partners International Speedway Corp. and the Cordish Co. withdrew their application to build and manage a state-owned casino and entertainment complex that had been estimated at $705 million."

(Report Comment)

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