Casino money pumps up education fund, but link to specific projects unclear

It was one of the major points of debate when Maryland lawmakers were considering whether to legalize gambling in 2008.

The money generated by slot machines, proponents said, would pump millions of dollars into education, funds that would otherwise come from state taxpayers.

Opponents feared that despite good intentions, the money wouldn’t go where it was supposed to go.

Six years later, four casinos are open in the state, with a fifth, Horseshoe Casino, opening tonight in Baltimore . A sixth casino is on track to open in Prince George’s County in 2016 .

In fiscal 2014, according to the Maryland Lottery and Gaming Control Agency, the casinos brought in $833.3 million in revenue. Nearly half of that money, $405,987,521, went back to the casinos.

The next biggest chunk—$328,094,739, or 39.4 percent—went to the Maryland Education Trust Fund.

That amount has steadily increased since 2011, when Hollywood Casino Perryville in Cecil County and Casino at Ocean Downs in Worcester County pumped $49.9 million into the Education Trust Fund.

That money, which goes into the state’s general fund, pays for pre-kindergarten through twelfth grade in the state’s public schools, public school construction projects and construction of capital projects at colleges.   

But what projects have specifically been due to funds directly tied to gambling revenue remains unclear.

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“It’s hard to track where one dollar from gaming revenues matches one dollar in general fund dollars to support our schools,” said Sean Johnson, the assistant executive director for legal and political affairs for the Maryland State Education Association. “But as we’ve seen additional money come into the Education Trust Fund, we have seen new programs that our schools have been able to implement.”

One recent example, Johnson said, has been state grants to expand pre-kindergarten. Last month, 24 providers received a total of $4.3 million in grants to add more spaces for pre-K students .

Johnson said the extra money has been used to expand school breakfast programs and special education services in districts across the state.  

“All of these things make for a better experience for students,” Johnson said.

Local impact

But local officials say they have no easy way of tracing which school projects are paid for with casino cash, something that concerns advocates for transparent government.

The includes Baltimore County, whose spokesman Mychael Dickerson said the school system could not demonstrate any economic impact directly from casino revenues.

Jennifer Bevin-Dengal, president of the public advocacy group Common Cause Maryland, said she'd like to see a clearer breakdown of how the casino money is spent on schools.

"It's all been couched as, this is for the students, this is for the schools," Bevin-Dengal said. "Dedicated funds should have better accounting in the state budget." 

Baltimore officials tied gambling revenue to its billion-dollar proposal to help with its ten-year school construction initiative . The plan was passed by the Maryland General Assembly in 2013.

Craig Whiteford, budget manager for Cecil County, said the county gets a pot of money for education funding from the state every year. That includes the casino allocations.

“But it’s not like we see a distinction that says, here’s exactly how much is coming from video lottery terminals,” Whiteford said.

Whitford said he’s not concerned that the casino money can’t be linked to specific initiatives within the Cecil County school system, adding state law is very clear on how the Education Trust Fund can be used.

A spokesperson for Worcester County government referred questions about local casino allocations for education to Barbara M. Witherow, spokeswoman for Worcester County Public Schools.

Witherow said the school system, like other public school systems in Maryland, gets a mix of funding from the federal, state and county governments.

“Worcester County Public Schools does not receive any direct funding from casinos,” Witherow said.

David Cox, superintendent of Allegany County Public Schools, said it is up to the county commissioners to determine how money from Rocky Gap Casino and Resort is spent. The casino in Flintstone opened last year.

“The county commissioners have not engaged us in any conversation about use of the money,” Cox said. “They decided early on that the Rocky Gap proceeds would be used for scholarships to Allegany College of Maryland and Frostburg State.”

A portion of that money will also go to school construction projects and local fire companies, he said.

“I wish we had an opportunity to give our input on how the education money is spent,” said Cox, adding the district could use more money for a new high school. “We have many, many unmet needs in our school system.”

“But I can’t argue with college scholarships. Those are a good thing, too,” Cox said.  

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