This story is from Tony Messenger of the St.Louis Post Dispatch-
JEFFERSON CITY • In 2008, Missouri voters cut a
deal with casinos.
Gamblers would no longer be limited to losing $500 every two
hours, as long as some of the additional money generated by the
casinos went to help public schools.
Proposition A was pitched as a school funding mechanism, with
the extra gambling revenue put in a lock box, virtually
guaranteeing more money for education. It passed with 56 percent of
voters saying yes.
Two years later, public schools have been dealt a bad hand,
state Auditor Susan Montee said Thursday.
Because of changes to the law made by the Legislature in 2009,
the additional money generated by casinos because of Proposition A
is no longer guaranteed to be "new" revenue on top of what
lawmakers had already budgeted for schools.
If the provisions voters passed in 2008 were still in effect,
Montee said in her audit, public schools would be getting at least
$20 million more than lawmakers budgeted in the current fiscal
year.
"The money is not being spent the way voters intended," Montee
said. "There should be some confidence that when voters vote
something in, it stays that way."
The audit touches on a long-standing criticism of state casino
and lottery revenue, which has been touted as directing millions of
dollars to classrooms. Critics say the windfall has been
overstated. They argue that as new casino money for schools has
come in, the state has simply reduced other funds it was previously
spending on education.
During the campaign for Proposition A, opponents picked up on
that skepticism, raising suspicions about whether the money would
truly boost total school spending.
At the time, a spokesman for Proposition A called the proposal
"tamper-resistant," but lawmakers found a way to rewrite the
statute.
Montee's audit of the gambling revenue was required by the
proposition. In it, she says the state has followed the law
appropriately, but she takes issue with the changes to the law made
in 2009.
Republican lawmakers, however, dispute Montee's analysis.
They say the Legislature amended the law to make sure the new
casino money was distributed fairly, not to free up school funds
for other purposes. The 2009 changes passed with bipartisan
support.
Sen. Rob Mayer, R-Dexter, the current appropriations chairman in
the Senate, said lawmakers fixed a flaw in Proposition A that would
have allowed much of the new gambling money to bypass many schools
in Missouri — including many in the St. Louis area — because of
quirks in the state's funding formula for education.
Analysis by both the Legislature and the executive branch during
the 2009 session suggested that the gambling money might not be
distributed to education as the writers of Proposition A had
planned.
"When outside groups put things on the ballot, they don't always
understand the intricacies of the appropriations process," said
Rep. Ryan Silvey, R-Kansas City, on Thursday.
In the case of Proposition A, the issue was over how the
additional gambling money would be distributed. Proposition A would
have put any new gambling revenue above the baseline amount that
was collected in 2008 into a special fund.
But the way the referendum was written, the casino money would
have generally favored rural and poor school districts, bypassing
about two-thirds of the districts in St. Louis County.
Lawmakers got rid of the special fund and now put all gambling
revenue into the overall pot of money dedicated to schools.
Mayer said the Legislature acted responsibly and shouldn't
change anything.
"All the money collected from gaming that is supposed to go to
public schools is going to public schools," he said.
Montee's audit doesn't dispute that. But she says voters
expected education funding to rise by the amount of increased money
created by the lack of loss limits. Instead, because of the bad
economy, other sources of education funding were reduced, and the
casino money was used to fill in the gaps.
In 2008, the state spent $4.2 billion on elementary and
secondary education. In the most recent fiscal year, Montee said,
the additional casino revenue created by Proposition A amounted to
about $61 million. But lawmakers budgeted only $40 million more for
education in 2011 than they did in 2008, leaving them $20 million
short of what the original Proposition A would have called for.
That's just the way things had to be, Mayer said. "Because of
the state of the economy, revenue from other sources is down
dramatically, and we've adjusted accordingly."
Silvey said that even if lawmakers had met the original
requirements of Proposition A, there's no guarantee Missouri
schools would have ever seen the additional money.
That's because the governor sometimes withholds money to balance
the budget when the state's revenues are down, as they are this
year. In the current fiscal year, Gov. Jay Nixon has withheld $76
million in school funds, more than the entire total of additional
gambling revenue. Most of that money came from transportation
funds, the Parents as Teachers program and other,
non-classroom-related programs.
