The multimillion-dollar media war over expanding gambling in Maryland has returned repeatedly to the question of whether or not increased casino revenue will really mean more money for schools in the state.
“Question 7 would add table games and a new casino for Maryland, generating almost $200 million more for education every year,” says former Baltimore County Executive James T. Smith Jr. in a TV ad supporting the measure.
Not necessarily, says the opposition.
“There’s no obligation to actually use revenues in Maryland’s classrooms,” says one of its commercials.
Experts say the truth, perhaps predictably, lies somewhere in the middle.
“Every dollar of new gambling money [to the Education Trust Fund], just like the old gambling money, will be spent on education,” said Neil Bergsman, director of the nonprofit, nonpartisan Maryland Budget & Tax Policy Institute. “But the law allows for those gambling dollars to be used instead of the tax dollars.”
Established by the initial legislation authorizing slots in Maryland, the Education Trust Fund receives the licensing fees from the state’s casinos as well as 48.5 percent of gross gaming revenue.
Money from the trust fund has been used to offset education spending from the state’s general fund, freeing up general fund money to be spent elsewhere, so the trust fund itself doesn’t necessarily increase the total amount spent on education, Bergsman said.
Nonetheless, the state has maintained a good track record on education in the past few years, Bergsman said. “The total amount we’ve given to schools has been going up every year,” he said.
Even with the state’s new requirement that local jurisdictions pick up some of the cost of teacher pensions — which, in effect, amounts to a reduction in state aid — Maryland schools have fared better during the recession than schools in other states.
Since its inception in fiscal year 2010, the trust fund has only been used to fund K-12 education. The money couldn’t be allocated elsewhere without a special provision in the annual Budget Reconciliation and Financing Act, according to the governor’s office.
Either the governor or lawmakers theoretically could propose such a transfer, and both branches would need to sign off on the plan as with any other legislation, according to the Department of Legislative Services.
“A casino proponent could argue correctly that without casino money, education funding would have been cut more than it has been,” Bergsman said. “[But] it’s absolutely correct that the gambling expansion does not guarantee an increase in funding for schools.”
Marylanders are still relying on the judgment of elected officials to protect the state’s investment in public education, Bergsman said.
Gambling supporters — citing state analysis — project table games and a new casino in Prince George’s County will bring about $200 million in new money to the trust fund each year.
Voters will decide on the expansion proposal, known as Question 7, on Nov. 6.
The fund has drawn criticism from the conservative Maryland Public Policy Institute, whose president, Christopher Summers, has described it as a vote-buying mechanism.
Education advocates, such as the Maryland State Education Association, have praised the state’s ability to hold the line on education funding during the recession but have suggested increasing spending with the anticipated new dollars.
Earlier this month, Gov. Martin O’Malley (D) offered a sharp rebuke of the anti-casino-expansion ad campaign, which is largely being financed by Penn National Gaming, the Pennsylvania based company that owns Hollywood Casino in Charles Town, W.Va., a popular gaming destination for many Marylanders.
“If you look at the history of what we’ve done, it’s been one of the biggest increases in education funding in our state’s history,” O’Malley told reporters. To suggest otherwise was “total crap. Hogwash. It’s a bunch of West Virginia casino hooey,” he said.