Education funding plan draws mixed reviews

JEFFERSON CITY, Mo. -- State lawmakers aren't enthusiastic about Gov. Bob Holden's plan to raise $220 million in needed revenue for education, a proposal that relies heavily on gambling revenue.

However, some legislators, particularly Holden's fellow Democrats, feel the General Assembly may have no choice but to follow the governor's lead or make even deeper budget cuts than already proposed.

"Whatever we have to do to fund education, we're going to do," said state Rep. Phillip Britt, D-Kennett.

Other lawmakers, primarily Republicans, aren't convinced the governor is on the right track.

"You can't gamble your way into prosperity," said state Rep. Tom Burcham, R-Farmington. "If we're going to rely on gambling funds for Missouri's future, we're in trouble."

House battles ahead

On Wednesday, Holden unveiled a $19.2 billion state budget proposal. Because of slow revenue growth, the budget calls for $480 million in appropriations cuts from the current state budget. That figure could rise to $613 million if lawmakers reject Holden's request to tap into the state's rainy day fund to cover other spending initiatives.

The budget process begins in the House of Representatives, where tougher than normal battles are expected to address funding needs.

Despite the cuts, Holden said ensuring full funding -- $2.26 billion -- for the formula that distributes state aid to local school districts is imperative. Legislative leaders of both parties agree, but the governor's plan immediately stirred controversy.

The governor suggests getting $177.3 million of the $220 million he needs by generating more gambling revenue. Another $49.9 million would come through tweaking state tax collections, particularly from retailers.

Combined those efforts would bring in $7.2 million more than needed.

Brian Long, Holden's budget director, said the extra amount would provide a cushion if revenue projections fall short.

Gambling loss limit

Key to the plan's gambling portion is elimination of the state loss limit on riverboat casinos of $500 per person every two hours. The gaming industry has lobbied for years to do a away with the limit.

When the limits were adopted, riverboat casinos cruised the Missouri and Mississippi rivers. But with the state's riverboats either permanently docked or de facto land-based facilities, some argue the limit no longer makes sense and doesn't serve to protect compulsive gamblers.

"In a day's time, if you want to lose money, you can lose a lot of money," Britt said.

One aspect of the governor's proposal Britt is leery of is hiking admission fees from $2 to $3 a head. The current fee is evenly divided between the state and the city and county in which a facility is located. The state would claim all of the proposed extra buck.

Since casinos, not patrons, pay the admission fee, Britt worries smaller operations, such as Casino Aztar in Caruthersville, Mo., would take substantial hits to their incomes.

Britt said Aztar has been a financial boon to the city and Pemiscot County.

If it were to close or reduce its work force, the impact on the Bootheel could be devastating, Britt said.

Holden also wants to increase the state's take of gaming receipts from 20 percent to 22 percent, further hitting the bottom line for casinos. That component and the fee increase are expected to face tough opposition from gambling industry lobbyists and their supporters in the Legislature.

House Speaker Jim Kreider, D-Nixa, said he's not entirely happy about the governor's plan but is "pretty sure" he will support it. Like Holden, Kreider sees no moral compromises for the state in addressing education needs with gambling revenue.

"Gaming is legal in this state, so let's take the money we can raise from that industry and put it in education," Kreider said.

Different view

House Republicans have a different take when it comes to gambling revenue, the state portion of which is constitutionally earmarked for education.

The GOP caucus is pushing legislation that would keep gambling money out of the formula, instead distributing it directly and equally to local schools on per-pupil basis.

"Schools know what they need better than the state does, and we should trust them with this money, just as we trust them to educate our children," said House Minority Floor Leader Catherine Hanaway of Warson Woods.

The bill is unlikely to make much headway in the Democratic-controlled House. Kreider dismissed it as "smoke and mirrors" and noted it would require lawmakers to plug an even bigger financial hole in the formula.

Hanaway said if Holden were serious about education being his top priority, he would earmark an addition percentage of general revenue, the state's most reliable cash pool, for the formula. Hanaway suspects Holden's proposed use of gaming money for the formula is a tactic to make voting against it politically tough for lawmakers.

"My suspicions are there will be so much pressure to fully fund the formula that we'll vote to expand gaming," Hanaway said. "Other programs that might be funded with that money would not apply the same kind of pressure."

mpowers@semissourian.com

(573)635-4608