Some schools not expected to benefit from casino measure

Monday, October 6, 2008

JEFFERSON CITY, Mo. -- The ballot measure is called the "Schools First Elementary and Secondary Education Funding Initiative." But at least at first, not all schools actually would get money from it.

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 entitled Proposition A on the Nov. 4 ballot. It repeals Missouri's nationally unique loss limit that bars gamblers from buying more than $500 worth 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 revenue 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 also will get more money.

Study projections

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 question then is what does this mean for particular schools?

The Department of Elementary and Secondary Education has projected a school-by-school effect 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.

Distribution formula

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 the formula is that some school districts do not receive money through it. That's either because their local revenue places 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 "held harmless" 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 that 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.

Making changes

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" 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.

In a memo written near the end of this year's legislative session, one of the Senate staffers involved in developing the 2005 funding formula warned the Joint Committee on Education that the casino initiative could undermine the state's rational school funding approach. Donald Thalhuber said the initiative displays a "lack of foresight" and, if approved by voters, might need to be altered by legislators to make it mesh with the school funding formula.

Sen. Rob Mayer, 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, R-Dexter.

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.

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


EDITOR'S NOTE -- David A. Lieb as covered state government and politics for The Associated Press since 1995.

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