While a ballot initiative expanding gambling in the state has been heralded as a measure that would generate more money for education, officials said added casino revenue will not boost its funds.
Under state law, about 50 percent of slot-machine revenue is earmarked for the Education Trust Fund — an account dedicated primarily to public schools, but also university capital projects. The new law would allow for a sixth casino to open in Prince George’s County and would permit expanded gaming options beyond just slot machines to Las Vegas-style table games. It will go before voters in the November election as question seven on the ballot.
The money earmarked for education, however, wouldn’t actually bring in more money for state schools, but would instead offset money in the general fund so it can be spent on other state projects. The state spent about $6 billion on education funding this legislative session, and that amount wouldn’t change despite the nearly $200 million slot machines have generated since the first casino opened in 2010. The money is “largely a drop in the bucket,”said Sean Johnson, the Maryland State Education Association’s political and legislative affairs managing director, because that $200 million in the general fund would be used for something other than education.
“When the Education Trust Fund increases, it has the net impact of being able to free up general fund money for the state to spend on other things,” Johnson said. “It could be public safety, it could be health care, it could be K-12, it could be higher ed., it could be any other state priority … that’s funded out of the general fund.”
If the bill does pass, the Education Trust Fund is expected to see a steady increase in revenue from 2014 to 2017, according to estimates by the state’s Department of Legislative Services.
But State Comptroller Peter Franchot said claims that the expansion of gaming will generate more for education only appeal “to the altruism of voters who want to do the right thing” for kids, when it does nothing to bring in new dollars for education.
“It is a lie to say that the existing slots program or the new casino that’s proposed in Question 7 will bring in new education dollars,” Franchot said. “Any new money added to the trust fund is taken out of the education budget on the other side.”
Slot machine locations have opened up slower than expected, and the state has been in the thick of a slow-growing economy, forcing casino revenue to fall drastically short of expectations. Because of this, Johnson said higher education has yet to see the benefits.
Franchot added that not only does the proposition not provide more money for education, but it hits lower-income individuals harder because they are poised to lose more money to gambling. He said the final approval of the bill was “an act of political corruption” to appease gaming executives.
“It’s a sad exercise to watch Democrats approve gambling, which everyone knows is a regressive tax,” said Franchot, who is a Democrat. “[Gaming] is a predatory industry.”