Missouri lawmakers look to divert new casino tax money

Thursday, January 1, 2009 | 4:51 p.m. CST; updated 10:33 p.m. CDT, Wednesday, May 20, 2009

JEFFERSON CITY — Just weeks after voters approved a casino ballot measure, Missouri lawmakers are looking to redirect the money that had been earmarked for the state's school funding formula.

Some lawmakers want to divert the money to raise teacher salaries. Others want to use it to boost spending on gifted and special education programs in K-12 schools, or to channel it to colleges and universities to hold down tuition costs.

The use of the projected $130 million annually in new casino taxes figures to spark debate during the 2009 legislative session that starts Wednesday — partly because new tax dollars are expected to be scarce in a tight budget.

Adding to the potential controversy is a perception that the revenues from previous voter-approved gambling measures have been used to replace — instead of enhance — existing money for education.

The measure, passed by voters in November, repealed the state's unique law limiting gamblers to losses of $500 every two hours, raised casino taxes and capped the number of casino licenses.

Drafters of the measure sought to assuage concerns by placing the new tax revenues in a special fund and requiring them to be spent as additional dollars through Missouri's funding formula for K-12 schools.

But if the voter-approved law is followed, 115 of the state's 524 school districts are projected to get no additional money from the ballot measure next fiscal year because of the way the funding formula is calculated.

That has caused a stir among some lawmakers.

"The language addressing the formula was, for lack of a better description, not ideally written," said incoming Senate President Pro Tem Charlie Shields, R-St. Joseph, who was a supporter of the ballot measure. "There probably are going to have to be some changes."

Lawmakers can ignore the spending directives approved by voters and appropriate money as they choose, or they can change the law itself with a majority vote in the House and Senate and the governor's signature.

House Majority Leader Steven Tilley, R-Perryville, is among those wanting to use the new casino revenues to boost pay for public school teachers. A lack of a funding source contributed to the failure of a teacher pay proposal in the 2008 session, and the new casino taxes could fill that void, he said.

Senate Majority Leader Kevin Engler, R-Farmington, said he doesn't want to change the intended purpose of the casino ballot measure. But earmarking the money for teacher salaries instead of the general school funding formula still could accomplish the voters' intent, he said.

"Ninety-nine percent of my people don't know what the funding formula is," Engler said. "They just want to make sure it goes back to the schools and is not diverted to some other area, and teacher salaries is definitely coming back to the schools."

Diverting the money to colleges, however, might not meet voter expectations, he said.

Senate Minority Leader Victor Callahan, D-Independence, has proposed several ways of redirecting the casino money. He describes his bills as a starting point for discussions.

One of Callahan's proposals would pay the money to higher education institutions as a reimbursement for either reducing tuition or scaling back tuition increases.

His other proposals would distribute the new casino money to schools on a per-pupil basis, just as with current casino tax revenues. One of those options would increase the amount paid to schools for students in gifted and special education programs. Another would speed up the phase-in of the general school funding formula passed in 2005.

"I think the voters' intent was to get more money to education, at least in part," said Callahan, who opposed the ballot measure because it limited the number of casinos. "I think we have to ensure that every pupil in Missouri gets some benefit from those extra dollars."

Some critics of the ballot measure caution against basing any new initiatives on the new pot of casino money.

"That's all predicated on more people spending money at the casinos, Missourians losing more money at the casinos and people flying in from other states," said Evelio Silvera, executive director of Chesterfield-based Casino Watch. "There is absolutely no evidence that's showing any kind of an increased uptick in revenues from casinos that's going to lead to this $130 million."

The poor economy has hit casinos nationwide.

Missouri casinos lifted loss limits Nov. 7 in response to passage of the ballot measure. Their November revenues were up 9 percent compared with 2008. But excluding the Lumiere Place casino in St. Louis, which was not open in November 2007, revenues from Missouri's other 11 casinos declined 2 percent in November 2008 compared with the same month a year ago.

Missouri Gaming Commission Executive Director Gene McNary said that he has heard anecdotally from casinos that patrons are winning and losing bigger amounts of money since the repeal of loss limits, and that more people are coming to Missouri casinos from outside this region.

But December casino revenues are not available yet.


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Ayn Rand January 2, 2009 | 7:43 a.m.

Ha ha. Only a fool or a naïf believed that this money would actually go to K-12.

(Report Comment)
Ray Shapiro January 2, 2009 | 11:32 a.m.

Or a gambler playing a long shot.
The voting public were conned/duped by the casino industry and the politicians who are in their pockets.
And when the warnings were out to vote No!, they were ignored.
Missouri citizens "crapped out."
ray shapiro October 5, 2008
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!
ray shapiro October 5, 2008

Brian Demarest October 24, 2008
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.

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